Providers Push Back – N. Carolina Treasurer Pushes Back Harder

“It doesn’t matter who the governor is, or who controls the legislature. It’s not political. It’s mathematical.”

N.C. Treasurer at odds with health care system over State Health Plan

N.C. State Treasurer Dale Folwell lays out his plan to reduce the cost of the State Health Plan by holding medical providers accountable for what they charge. He says up until now, transparency has been lacking as far as pricing goes.


By John Joyce  – Reporter, Triad Business Journal

Oct 24, 2018, 12:30pm EDT Updated Oct 25, 2018

N.C. State Treasurer Dale Folwell is pushing back against health care providers with costs for services he says are not transparent.

The treasurer’s office announced this week that the State Health Plan’s board of trustees unanimously supported the Provider Reimbursement Initiative, a resolution aimed at lowering the cost of health care for state employees, retirees and elected officials.

The initiative promises to save an estimated $300 million for the plan and $60 million for its members.

To do so, the provider reimbursement strategy – effective Jan. 1, 2020 – will move the plan away from a commercial-based payment model to a reference-based, government pricing model based on publicly available Medicare rates, according to the resolution.

“Right now, the State Health Plan and members spend more on health care to employees and retirees than is appropriated for the entire university system or for public safety,” said Folwell, a Winston-Salem Republican serving his first term as treasurer.

In an interview with the Triad Business Journal earlier this month, Folwell offered a packet with page after page completely blacked out – redacted, he said – sent by UNC Health Care in response to an open records request he submitted asking for the cost breakdown of services rendered to the SHP.

“I know what I’m being charged, but I don’t know what I’m paying,” Folwell said. “The health care system has worked long and hard to develop this broken system. They’ve worked long and hard at it and they’ve been completely successful.”

On Wednesday, UNC Health Care did not respond to messages left by the Triad Business Journal or to emails seeking comments. On Thursday the health care network deferred to comments offered by the state health care association.

N.C. Healthcare Association President Steve Lawler, however, placed the emphasis back on Folwell’s shoulders Wednesday, saying in a prepared statement that Folwell has refused numerous attempts by unnamed health care leaders to “engage in a productive conversation.”

“North Carolina’s most thoughtful healthcare leaders have attempted, on numerous occasions, to work with the treasurer and his team, yet Mr. Folwell has refused to engage in a productive conversation,” Lawler said. “Our provider community remains resolute and committed to working with the Treasurer or our General Assembly to develop a plan that serves the best interests of all North Carolinians.”

The initiative approved by the board this week transfers some of the costs back to the providers. Providers do, however, have the option to opt out. Providers statewide began receiving letters this month outlining their new reimbursement rate.

Once the new transparent rates are in effect, providers choosing not to partner with the Plan will no longer be considered in-network providers for the Plan and its members.

Lawler said the treasurer’s claims that the plan, based on Medicare rates, will offer profits to providers is a false assumption because government payers already reimburse well below the cost to provide care. He added that some providers might have to cut services, forcing plan members to look outside their network for care.

That might be moot, though, because of the providers who opt not to participate being considered outside the network of the State Health Plan under the new resolution.

“It’s not because I’m the treasurer. It doesn’t matter who the treasurer is,” Folwell said. “It doesn’t matter who the governor is, or who controls the legislature. It’s not political. It’s mathematical.”