State Treasurer Explains Provider Reimbursement Changes for State Health Plan in 2020

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State Treasurer Explains Provider Reimbursement Changes for State Health Plan in 2020

From State Treasurer Dale Folwell

Last October, the State Health Plan announced that it was going to change the way it reimburses medical providers for services they provide to the Plan’s more than 727,000 members.

Starting on January 1, 2020, the Plan will move away from a commercial-based payment model to a government pricing model based on what Medicare pays health care providers, plus a 77% profit. This change will affect only those retirees on the 70/30 or 80/20 plans.  It will not affect those on the UnitedHealthcare Medicare Advantage plans.

Medicare provides a standard reimbursement measurement that is transparent and adjusts for differences such as location. We are also increasing reimbursement rates for independent primary care physicians, mental health specialists and critical access hospitals, many of which are in rural areas.

Why Are We Doing This?
This new strategy is part of broader effort to keep rising health costs under control while promoting transparency, affordability and quality of care.

For decades, the Plan has used Blue Cross and Blue Shield of North Carolina’s (Blue Cross NC) commercial network of providers. Blue Cross NC and medical providers consider the fee schedules (what they charge) associated with this network to be confidential.

In fact, when we (the Plan), asked the state hospital (UNC Health Care), to tell us how much we pay for state workers’ health care they sent us 200 pages of redacted or “blacked out” pages. In other words, they will tell us what they charge for medical charges, but not how much cost.  It is like going grocery shopping with no prices listed and only knowing what you owe when you check out.

Whether it’s a cup of coffee or a tank of gas you know the value of what you are consuming. But with health care, the consumer has no idea of the price or value of what they are getting. We want to push the power down to the consumer to make informed decisions about what you spend for medical services. Moving to this new strategy will provide pricing that is transparent allowing you to receive more affordable health care.

How Much Will I Save?
Right now, a starting teacher or state trooper must work one week out of every month just to afford the family premium on the Plan. This effort will generate savings of $300 million, making it possible for the Plan to reduce premiums and make it more affordable for state employees and their dependents. Plan members themselves will save of over $65 million in reduced out-of-pocket expenses.

You Can Help
We want you to become a Watchdog for the Plan. But transparency is the key. We want all medical providers join us on this effort and agree to be an in-network provider. Tell your health care provider that you want them to treat the people who teach their children, protect them from criminals, pave their roads and provide other essential government functions to be in-network for State Health Plan members.