The N.C. Healthcare Association said Friday it would make available contract rates between providers and insurance companies if it would help resolve a high-profile issue with the State Health Plan and state Treasurer Dale Folwell.
However, Folwell said Saturday the offer made by NCHA president Steve Lawler rings hollow to him and is just public posturing.
The SHP is the largest buyer of medical and pharmaceutical services in North Carolina, spending $3.2 billion in 2017. It represents more than 720,000 teachers, state employees, the governor, current and former legislators, state university and community college personnel and their dependents, and non-Medicare retirees and their dependents.
Folwell, the SHP and the NCHA have been butting heads since Folwell unveiled his Clear Pricing Project initiative in October. Each are claiming the other side has not been willing to engage in earnest negotiations.
Folwell is attempting to move the SHP to a government pricing model tied to Medicare rates similar to those used in Montana and Oregon. It would move the SHP away from a commercial-based payment model to a reference-based government pricing model tied to Medicare rates.
Folwell’s proposal would allow the SHP on Jan. 1 to begin paying about 61,000 providers based on a percentage above current Medicare rates, along with an additional and adjustable profit margin.
Folwell said the SHP will provide increased reimbursement payments to most independent primary care physicians, behavioral health specialists and many rural hospitals.
Folwell’s goal has been to have providers sign up for the new payment system by June 30.
Lawler expressed in Friday’s statement his willingness to meet with the SHP board of trustees and health-care providers “to collaborate on a plan to redesign care so that the state employees, teachers and retirees, who have spent their careers in service to our state, can proactively manage their own care in the most cost effective and transparent way.”
“If contract rates between providers and insurance companies are a barrier, then NCHA and our members would not object to those rates being disclosed to the treasurer and his staff.”
Folwell has expressed his frustration repeatedly, including during legislative committee meetings, about his inability to gain access to those contract rates from providers and insurers.
For example, Folwell said in September that in response to a public-records request to the UNC Health System that entire chunks of the response, pages in a stack a ½-inch thick, were redacted over and though critical information.
“They’re calling it ‘proprietary information,’ ’’ Folwell said.
UNC Health spokesman Phil Bridges told the Winston-Salem Journal in September that all agreements between hospitals, doctors and insurance companies are proprietary business agreements, are not subject to public release, but are independently audited.
Dr. Michael Waldrum, the NCHA’s chairman and chief executive of Vidant Health, has questioned the wisdom and timing of Folwell’s clear pricing proposal, including to legislators, as the state health care system braces for the full impact of the latest phase of Medicaid waiver transformation over the next nine months.
“There’s a better way to do to this, and we stand ready to help the State Health Plan with providing better quality care at lower cost,” Waldrum said.
Folwell said the NCHA “has neither stood up, showed up or spoke up about how to increase transparency and lower health-care costs.”
Folwell cited as an example the SHP’s unsuccessful attempt earlier this year to get Waldrum “to consent to releasing information that would inform the citizens of eastern North Carolina on the costs of health care.”
“In our meetings with Mr. Lawler, he has said nothing, offered nothing or knew nothing about how to actually solve the health-care crisis facing the State Health Plan,” Folwell said.
Folwell’s pitch to SHP members includes encouraging them to urge medical providers and hospitals to agree to the new reimbursement rates. He has warned SHP members that hospitals and providers opting not to sign the contracts will be considered as out-of-network.
Tryon has nearly 90 board-certified physicians specializing in internal medicine and cardiology, endocrinology, dermatology, gastroenterology, pulmonary sleep and internal medicine subspecialties.
The group separated from Atrium Health’s Mecklenburg Medical Group in September. It has eight clinics in Mecklenburg County and serves more than 100,000 patients.
The SHP has 38,850 members in Mecklenburg.
On May 15, Rehabilitation Associates Networks signed the contract. It has been the largest network of independently private practitioners of physical and occupational therapy operating in the Carolinas since 1997.
Folwell said May 13 that “we’ve had hundreds of requests for information and a lot of buzz around the new network. We’re confident that the state’s medical community will work with us to create this new network.”
The treasurer has the authority to decide on reimbursement cuts, but legislation could take that away from Folwell.
It has yet to be acted upon in the Senate since being sent to the Rules and Operations committee April 4.
Lawler acknowledged in his statement that “the Senate continues to side with the union (SHP) and not act on the bill.”
Sen. Joyce Krawiec, R-Forsyth, and a Senate health committee co-chairwoman, said in February she has heard from constituents frustrated with not being able to price health care services and procedures before having them done, particularly if they were attempting to self-pay for their care to lower their expenses.
“Most of us don’t have a clue what we’re paying, and if we don’t have transparency, we’re never going to get costs going down,” Krawiec said. “We have to get together and talk and cooperate to get something done.”
Blue Cross Blue Shield of N.C. will serve as third-party administrator of the contracts. The insurer contracts with providers and intermediaries to deliver covered medical services to plan members.
The SHP plans to phase the rate changes in over a two-year period. First-year rates are projected to produce $196 million in savings, and another $62 million in year two.
Lawler said the SHP should not be adjusting provider reimbursement rates based primarily on finances. He cited that the SHP reported last week a cash balance of $1.23 billion “with revenues exceeding projections, while expenses are falling short of budgeted amounts.”
“The State Health Plan’s surplus of $1.23 billion tax dollars is a direct result of the work of physicians and hospitals to provide more efficient and effective care and clearly indicates there is time to develop a more thoughtful plan,” Lawler said.
He claimed Folwell’s initiative “would move access to health care and value-based services backward rather than forward.”
Folwell responded that “the temporary surplus is the result of our work to cut tens of millions of internal costs out of the plan and engaging members to be better consumers of healthcare.”
“Their press release changes none of the facts.”