State Health Plan Board of Trustees Unanimously Supports Provider Reimbursement Initiative that Lowers Health Care Costs

Monday, October 22, 2018

(Raleigh, N.C.) – State Treasurer Dale R. Folwell, CPA, announced today that the State Health Plan Board of Trustees unanimously passed a resolution favoring a new provider reimbursement strategy for North Carolina providers that care for Plan members.

The provider reimbursement strategy, to go into effect January 1, 2020, will move the Plan away from a commercial-based payment model to a reference-based government pricing model based on a percentage of publicly available Medicare rates, according to the resolution passed today. This effort is aimed to keep rising health care costs under control while promoting quality care, transparency and affordability.

“I want to thank the board for their support of this new strategy,” said Folwell. “Right now, the State Health Plan and members spend more on health care to employees and retirees than is appropriated for the entire university system or for public safety. We are offering medical providers the opportunity to be compensated at an established, transparent rate plus a generous profit. This will ensure teachers, law enforcement officers, state employees and teachers continue to get the health care they deserve.”

This month, providers statewide began receiving letters outlining their new reimbursement rate. Providers were asked to express their interest in partnering with the Plan on this new rate strategy. Once the new transparent rates are in effect, providers choosing not to partner with the Plan will no longer be considered in-network providers for the Plan and its members.

The new provider reimbursement strategy will cut rates for some medical providers. However, rates will increase for many including primary care physicians, critical access facilities and mental health practitioners.

This provider reimbursement strategy will generate an estimated $300 million in savings to the Plan and over $60 million in savings to Plan members. These savings will make it possible for the Plan to reduce premiums and make the Plan more affordable for Plan members and their dependents.

The State Health Plan, a division of the N.C. Department of State Treasurer, provides health care coverage to more than 727,000 teachers, current and former lawmakers, state university and community college personnel, retirees and their dependents.

View the Resolution.