In the midst of an ongoing dispute over healthcare pricing, North Carolina's State Health Plan has moved most Atrium Health facilities to its out-of-network tier of providers.
State Treasurer Brad Briner, who oversees the Health Plan, says the action is necessary to protect its solvency against a pricing structure that Atrium announced last week in response to the state plan's own decision to put Atrium in its non-preferred pricing tier.
"One of my duties is to keep the State Health Plan financially solvent so it can continue as an incentive for teachers and state employees. I will not let one hospital system destroy the Plan, raise premiums on every teacher and state employee and send us into overwhelming debt," Briner wrote in a press release.
Atrium is one of the largest healthcare providers in the state and operates in Charlotte and Winston-Salem, among other locations. It serves about 80,000 State Health Plan members, according to a recent press release.
Under the plan Atrium announced last week, State Health Plan members seeking care at most of its facilities would pay co-pays lower even than they would at the Health Plan's preferred providers. Atrium would also waive coinsurance and deductible payments as part of what the non-profit healthcare system's executives call a commitment to affordability.
But Briner and other Health Plan officials said that commitment would actually pose a problem for the health plan because Atrium is only generating savings for the customer, not for the plan. That could cost the Health Plan up to $250 million in 2027.
The NC Newsroom has reached out to Atrium for comment and will update this story when it hears back.
Atrium, Briner contends, still wants to charge the health plan high prices for its services, potentially imperiling its fiscal solvency and at minimum meaning that it needs to lean on taxpayers for additional funds.
By moving Atrium out of network, the Health Plan would no longer be responsible for most of its payments to Atrium. If Atrium keeps its commitment to state employees, Briner said, care at most of its facilities will remain affordable.
"We needed to find a way to respect Atrium's desire to pay our health plan members' costs and still hold the State Health Plan harmless, and moving them to the out-of-network tier does exactly that. Our members bear no more costs than the Atrium Affordability Plan, and the State Health Plan doesn't bear that incremental $250 million cost that Atrium was trying to impose on us," Briner said in an interview Wednesday.
Over the last two years, the General Assembly has appropriated about $4 billion to the State Health Plan.
The tiered pricing system introduced by Health Plan officials this summer was intended to present a solution to some of that spending, with preferred providers like Novant and UNC Health offering the health plan lower rates for services in return for the likelihood that members would choose them for care.
"This approach was solely to place the Plan on a better financial path and to avoid placing any additional burden on Plan members in the form of increased copays and premiums," Tom Friedman, the health plan's executive administrator, wrote in a press release.
Negotiating with Atrium
Health Plan officials initially placed Atrium in their non-preferred provider tier, which would see members pay some of the highest copays and out-of-pocket maximums to seek care there.
In response, Atrium offered to match the preferred provider rates, a step Briner previously said was a non-starter because it undercuts the agreements with Novant and UNC Health.
The State Health Plan and Atrium did reach a limited agreement on care at a dozen children's and rural hospitals, which would see care at those facilities placed into the plan's so-called Access Tier. At that level, rates for members are largely kept at 2026 levels.
Those facilities will remain in the access tier despite Wednesday's announcement.
But Health Plan officials also quickly became dissatisfied with those negotiations because, they said, Atrium never raised the possibility that it would be introducing the more sweeping pricing plan. That plan was announced last Tuesday, just days before open enrollment was set to begin.
"When a quote-unquote partner of yours does something deliberately destructive to you without telling you at a sensitive time, I don't know how that can be well received. But that said, my job, our job is to ensure that our State Health Plan members get access to high-quality, affordable care, and we are absolutely committed to that goal," Briner said Wednesday.
Ideally, Briner added, Atrium would reverse course on its new pricing plan. That would leave the children's and rural facilities in the plan's access tier and most of the system's hospitals in-network.
In an interview Monday, Briner called the Charlotte-based system "an important healthcare provider in the state."
He went on to say, "We have a lot of members (who are patients of theirs). And so we will do business with them, even in spite of how they treat us."
Asked Wednesday how that stance is consistent with the decision to take most Atrium facilities out of network, Briner pointed back to the limited agreement, noting that some Atrium facilities will still be in-network.
Beyond that, Briner said, the State Health Plan's relationship with Atrium is now fundamentally different than those it has with other healthcare systems.
"Our members are more than welcome to go there. In fact, it's very affordable for them to do so both on a co-pay basis and from a total State Health Plan cost basis. So assuming Atrium keeps its commitment, we hope many of our members go to Atrium next year," Briner said in an interview.
Open enrollment for State Health Plan members is ongoing and will remain open until November 6.
