NC State Health Plan reaches deal with Atrium Health, but using WakeMed will still cost more

Out-of-pocket charges for North Carolina State Health Plan members who use Atrium Health hospitals and specialists will stay about the same under an agreement that state Treasurer Brad Briner announced Tuesday. 

Atrium Health, the state’s largest healthcare system, and the treasurer’s office had engaged in a months-long public back-and-forth since summer, when the health plan introduced a tiered plan for health systems that put Atrium in a “non-preferred tier.” That designation would have resulted in members paying more out of pocket for going to most Atrium medical facilities or seeing Atrium specialists. 

Atrium responded with its own plan to lower out-of-pocket costs for state employees while continuing to bill the health plan at higher rates. Briner and the health plan sued. When a judge denied a request for a temporary injunction, the health plan moved Atrium out of network. 

The agreement announced Tuesday puts Atrium Health in the “access” tier, which means members will have out-of-pocket charges that essentially remain level. Duke Health is the other access provider. 

However, WakeMed is still in the “non-preferred” tier, where State Health Plan members will pay higher out-of-pocket costs.

Costs will rise next year for NC state employees and teachers who use most WakeMed services

WakeMed and Atrium are in the midst of a proposed merger, but the agreement with Atrium covers only existing healthcare facilities, Briner said. The initial contract terms are for three years. 

As part of the agreement, Atrium will cancel its special pricing plan for state employees and the state health plan will drop its lawsuit. 

The agreement “preserves our members’ access to the largest hospital system in the state at net prices our members can actually afford,” Briner said. “And those prices are consistent with what you pay this year. Against the backdrop in healthcare that goes up 10 or 15% each year, holding flat is a pretty good value.”

Novant Health, UNC Health, and Iredell Health are preferred providers. Using their hospitals and specialists, State Health Plan members will pay less out of pocket for healthcare. These providers have agreed to lower charges to the health plan in exchange for increased patient volume. 

The health plan is trying the new tactic of setting tiers to control costs. 

Higher than anticipated costs could result in the health plan running out of cash at the end of this year or early next year. 

“It’s a pretty stark concern that we could be down to zero by the middle of January,” said finance director Mark Collins. 

Health plan trustees voted Tuesday to borrow $415 million from the Retiree Health Benefit Fund to cover the State Health Plan bills. That’s about 10% of the assets in the fund. The Health Plan must repay the money, with interest, but no timeframe has been established yet. 

Retirees and local governments that pay into the system won’t see any changes.

The preferred provider strategy is expected to improve the insurance plan’s finances. It will  “change everything” for the plan, Briner said. Once they get through the end of this year and through the beginning of next year “I think we’ll see definitive results,” he said.