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SHP, Folwell offer additional sign-up period for hospitals, providers on reimbursement contracts

SHP, Folwell offer additional sign-up period for hospitals, providers on reimbursement contracts

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The State Health Plan and state Treasurer Dale Folwell have re-opened the sign-up period for the controversial Clear Pricing Project, though it was unclear Monday whether any more hospitals will join.

The new enrollment period starts Friday and ends Aug. 5, marking the second time Folwell has extended the sign-up period.

Hospitals and medical providers that do not sign the contract could be out-of-network for more than 727,000 SHP participants starting Jan. 1.

Right now, that would include the three main Triad hospital systems — Cone Health, Novant Health Inc. and Wake Forest Baptist Medical Center — and all but four of the 126 hospitals in the state.

Cynthia Charles, communications and public relations director for the NCHA, said that decisions "about whether or not to opt-in to the treasurer’s new offer remain up to individual hospitals and health systems."

"At this time, it is unclear whether this new proposal will result in any movement. We are not surprised by the treasurer’s announcement. He had to address the network inadequacy issue."

Cone said July 1 it was rejecting the contract. Novant said it continues to review the contract and Wake Forest Baptist said it will not discuss its plans.

A Cone Health official, on his own accord, blasted the state lawmakers, SHP and Folwell for its reimbursement cuts.

“Your plan to cut payments to hospitals could possibly be the most moronic idea I have ever seen come out of our state government,” Frank Kauder, Cone’s assistant finance director, said in his blunt critique that closed by urging the recipients to “burn in hell you sorry (SOBs).”

Employers and health insurers negotiate rates that provide in-network discounts to individuals covered by an employer-based plan.

Without the negotiated discount, out-of-network costs can be significantly higher for most medical procedures.

The Republican-controlled state legislature has given the treasurer the authority to decide on reimbursement cuts to hospitals and providers as part of a mandate to reduce overall SHP expenses.

“The decision to readjust rates comes after many meetings and discussions with hospital officials and others,” Folwell said. “We realize that our members need to have additional hospitals for the plan to have coverage.”

As an enticement during the latest sign-up period, the SHP and Folwell have agreed to raise reimbursement payments again.

The new proposal increases payments to about 61,000 medical providers from 182% to 196% of Medicare rates on average. Urban hospitals will see their combined inpatient/outpatient ratios go from 178% to 200% of Medicare on average.

SHP participants’ decision-making process begins in early fall when they chose which providers they want for 2020 coverage.

There have been more than 27,000 medical providers to sign the contract through Monday, according to the treasurer’s office.

The SHP said hospitals statewide will receive an additional combined $116 million over the rate proposal announced in March. State taxpayers are projected to save $166 million under the latest proposal and SHP members save $34 million in reduced costs.

By comparison, Folwell’s initial proposal in October aimed to save SHP members up to $60 million initially and $300 million overall.

The plan is North Carolina’s largest purchaser of medical and pharmaceutical services at $3.2 billion in 2017.

Folwell said the SHP will provide increased reimbursement payments to most independent primary-care physicians, behavioral-health specialists and many rural hospitals.

“We believe what we’re offering is extremely fair,” Folwell said.

Folwell said he and the SHP have not received a firm counter-proposal from the N.C. Healthcare Association.

UNC Health Care has ramped up its lobbying with legislative leaders from both parties and Democratic Gov. Roy Cooper to get Folwell and the SHP to delay, if not halt, the contract roll out. Cooper’s office said it is reviewing the UNC Health Care proposal.

House Bill 184, which would halt Folwell’s initiative for at least a year in favor of a legislative study report, cleared the state House by a 75-36 vote April 3.

It has yet to be acted upon in the Senate since being sent to the Rules and Operations committee April 4. Senate leader Phil Berger, R-Rockingham, has signaled he has no desire to address HB184.

Cone and the NCHA have said Folwell “has turned a deaf ear on our repeated pleas to work collaboratively to switch state employees to a plan where clear and sustained cost savings are achieved, not simply a reduction in prices.”

“We urge state employees to voice their objection to the Clear Pricing Project’s lack of hospital coverage by contacting their lawmakers,” Cone said.

Folwell said that “there are those on one side of this issue who support secret contracts and higher health costs. There are those on the other side who support open contracts and lower health costs.

“I believe it’s telling that the side supporting open contracts has made compromises and the side that doesn’t support them hasn’t.”

Folwell said his compromise also includes asking the SHP’s board of trustees to create an advisory committee of health care professionals and others to recommend plan changes, including the consideration of alternative payment models, such as bundling, alternative care organizations and other alternative payment arrangements.

“We’ve had hundreds of conversations with hospitals and other medical providers,” said Dee Jones, the SHP’s executive administrator

“We are absolutely committed to looking at all options that will maintain price transparency, reduce costs and improve outcomes for our members.”

Charles said that while the NCHA is "encouraged that the treasurer is thinking of developing an advisory board," the group believes the legislation with HB184 is a better approach to reaching a compromise "that supports the health and well-being of its members, ensures choice, supports local providers and saves money." 336-727-7376 @rcraverWSJ


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