How Dare You! 177% of Medicare Is Insulting!

The state of North Carolina has adopted Reference Based Pricing for their state employee benefit program to become effective in 2020. The reference price will be pegged at 177% of Medicare. That has caused an uproar with the state’s hospitals and they are fighting back hard.

If 177% of Medicare is not enough, what is? How much are you paying for health care through your PPO network? You don’t know do you?. Chances are you’re paying a lot more than 177%. In fact we know you are. So how do you feel about that? If you feel “foolish, ignorant, dumb, uneducated, victimized” congratulations, you have successfully self-diagnosed a systemic affliction shared by most of your fellow countrymen. But rejoice, there is a cure!

Meanwhile back in Texas most Reference Based Pricing plans are paying 120-150% of Medicare on average. Some plans have negotiated direct agreements below that ranging from 100% to 140% of Medicare.

Life at the ranch is good and getting better these days. Junior (pictured on right) says “In Texas we’ve learned from an early age to spot bullshit when we see it. There must be an exceptional abundance in N. Carolina!”

The following article says more than anything the writer intended……

Transparency for North Carolina’s State Health Plan is a Two-Way Street


Your access to health care providers and services is under attack. The State Treasurer has proposed a shortsighted new model for the State Health Plan, which provides health insurance coverage to all state employees, teachers, state retirees and their dependents.


This risky scheme will affect healthcare consumers across the state, and place an undue burden on teachers, state employees, and retirees by limiting access to the care providers they know and trust.


The State Treasurer’s plan will cut payments for services at local doctors’ offices,  hospitals and health systems by more than $400 million, forcing them to cut important services and jobs.


Transparency and Hypocrisy

The State Treasurer has made bold claims about a lack of transparency in contract rates for services provided by the state’s hospitals. Yet, the State Treasurer has the pricing information because he manages all the claims data. Not only does he have the prices generally, he has every price paid for every procedure for every patient covered by the State Health Plan.


It is also important for citizens and lawmakers to understand that Blue Cross Blue Shield of North Carolina is the administrator for the State Health Plan. BCBS-NC negotiates rates for payment on behalf of the State Health Plan along with other private insurance plans. As with other businesses, the plan administrator is responsible for sharing information about claims to help the Plan better manage its expenses. Don’t be fooled by the Treasurer’s political rhetoric. The State Treasurer has all the information he needs to save money.


Ironically, not only does the Treasurer have the information he needs, but he also has conveniently failed to acknowledge the serious damage his State Health Plan proposal will do to healthcare for state employees, teachers, and retirees. It not only limits access to providers and services, but it also fails to provide employees the wellness benefits they need to improve their health.


The State Treasurer seems more interested in politicizing the State Health Plan than working to improve it



  • Ration care and access to patients’ doctors and hospitals, restricting everyone’s choices for healthcare and providers
  • Force many to drive hundreds of miles for basic healthcare that is currently more accessible
  • Jeopardize quality of care because payments to hospitals will be reduced and government payers don’t cover the cost of healthcare services provided by our healthcare systems
  • Cripple local operations and services in every single healthcare system, both rural and urban, across the state
  • Cause employee layoffs when financial losses make current employment rates unsustainable



  • Honor the current State Health Plan agreement to collaborate with its administrator and the state’s health care systems to design a smarter State Health Plan
  • Provide services for wellness and prevention  such as chronic disease management, smoking cessation, weight reduction and active lifestyle solutions
  • Adequately support local programs like school nurses and physical exams for high school athletic programs


The truth about how this affects us ALL

The proposed cuts to the State Health Plan will put the availability of health care services for everyone in North Carolina at risk. Aligning payments for North Carolina healthcare providers with federally mandated Medicare payments puts your healthcare in the hands of politicians. Low payments and continued financial uncertainty mean many hospitals across the state will face financial ruin that will lead to laying off employees, cutting vital health care services, and reducing the quality of remaining services.


If the State Treasurer’s goal is truly to cut costs, he needs to work with our doctors,  hospitals, and health systems to focus on preserving access to healthcare necessities, coordinating healthcare services and prioritizing wellness and disease prevention, chronic disease management and weight reduction.  A healthier workforce will save the state millions and increase employee satisfaction too.


Healthcare providers and the State Health Plan should partner to develop innovative solutions that put patients first and protect access and quality of care.


A Two Way Street

We can fix the State Health Plan – but blatant accusations and political gamesmanship won’t work. Our doctors, nurses and allied healthcare professionals work every day to ensure the wellbeing of our citizens. They don’t deserve to be caught up in a political agenda. We believe collaboration towards better outcomes is the only way to find real and sustainable solutions for our state health plan.


Doctors, hospitals and healthcare systems in North Carolina already are partnering with business, insurance and local governments to reduce cost, make healthcare spending more efficient and improve the general health of their communities. We stand ready to work with the State Treasurer to improve the State Health Plan, but it has to be a two-way street. Let’s stop pointing fingers and start working to build a smarter State Health Plan – protecting patients and supporting our providers.


Find out about a better path forward toward a smarter State Health Plan:


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