Dendy Opines on North Carolina RBP Fiasco

The state of North Carolina has received considerable push back from the medical community in their efforts to reign in rising health care costs for public employees. Scheduled to implement Reference Based Pricing strategies beginning January 1, 2020, the state’s medical industry (primarily hospitals) have pushed back so hard there is now doubt the plan will ever take effect. 

Mike Dendy, a national leader and expert in health care matters offers his opinion of how North Carolina could have easily taken the initiative in a much smarter way. His remarks were spurred by a recent letter sent to all North Carolina plan members (letter shown below Dendy’s analysis).

Mike Dendy’s Analysis:

I thought you all would appreciate this.

While I admire their courage, they are making this much tougher than it could have been.  The State (Governor) should have stumped that changes have to be made to the State’s benefit plan to remain solvent and to protect the tax payer.  He could have then stated that the traditional ways of paying for services was not working for the State and that they are changing methodology to RBR.  He could have then given licensed medical service providers within the State 30 days to opt out as a benefit provider for the State’s employees.  Such an option would not apply to those facilities within the State that are non-profit or not for profit.  All providers opting out would not be eligible for reimbursement from the State pool for a period of five years.

AKA:  Here’s what we are willing to pay, it’s fair and reasonable reimbursement, if you don’t want it, you lose the right to serve the 727,000 members for the next five years.  The Gov would have become an Icon overnight.  Next step, we are going to allow small businesses to join our coalition/purchasing alliance for a small monthly fee.

Mike Dendy
c:  (404)379-1380



Attached is your new State Health Plan membership ID card, which you may begin using on your coverage effective date. The card has a new look to provide greater transparency about your benefits as well as better descriptors of services and required copay amounts.

What Changes Were Made?

Paid for by YOU and other NC Taxpayers

This was added to highlight the fact that the Plan and taxpayers like you ultimately pay your medical bills – NOT Blue Cross and Blue Shield of North Carolina. They process your claims and provide a network of medical providers, but the money to pay your medical bills comes from you and taxpayers like you.

Average Premiums Paid

The people of North Carolina value your service. Your employer pays 82 percent of the cost of your State Health Plan benefit. On average, this is more than $3.1 billion per year.

Easier to Read and Understand

Descriptions for your in-network co-pays have been simplified to clearly describe the service and your responsibility for payment.

Did You Know?

During 2017, the state spent $3.3 billion on medical and pharmacy benefits. At the same time, costs have increased 5 to 10 percent while funding for the Plan only saw a 4 percent increase. In addition, the state has a $34 billion unfunded liability for retiree health care. This liability is a result of promises that were made for lifetime health benefits but no money was ever put aside to pay for that benefit.

What Can You Do?

You can help sustain this benefit by taking control of your medical costs. Be a smart health care consumer. This new card is a first step by emphasizing that, as a taxpayer, you are paying for your health care.