Bill filed to stop State Health Plan changes

One of the biggest fights of this young session pits hospitals against state employees.

Posted 5:52 p.m. Feb 26, 2019 — Updated 9:10 p.m. Feb 26, 2019

Travis Fain

, WRAL statehouse reporter

RALEIGH, N.C. — Legislation was filed Tuesday to block plans to rework how the State Health Plan pays hospitals and other providers, a move that was expected to save the plan $300 million or more a year.

The state's hospital association opposed the change, which State Treasurer Dale Folwell has pushed as a cost-saving measure for employees and taxpayers and as part of his ongoing fight with hospitals and insurance companies over price transparency.

House Bill 184 would create a study group to look at the issue over the next year and delay Folwell's planned changes until at least 2022.

Folwell wants to move away from the health plan's administrator, Blue Cross Blue Shield of North Carolina, negotiating rates in secret with hospitals and pay set amounts for procedures instead. Those would vary by service, but they average out to about 177 percent of what Medicare pays.

Hospital officials have said they need the extra money for a number of reasons, including to finance emergency care for people without insurance. The change could also cause a domino effect, the North Carolina Healthcare Association has said, with insurance companies pushing for locked-in rates, too.

The bill lays out a study group with four House members appointed by the speaker of the House and four senators appointed by the chamber's president pro tem. The committee would also have representatives from various medical groups, the State Health Plan and the State Employees Association of North Carolina, which has backed the treasurer's play.

The matter is one of the bigger – and most heavily lobbied – fiscal decisions before the state legislature this session.

The State Health Plan for state employees, retirees and teachers has more than 720,000 members, and it spends some $3.3 billion a year. Eighty percent of that comes from taxpayers.

Correction: This post initially stated that Folwell's plan would index payments to Medicaid. That reference has been corrected to Medicare.

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