Charlotte, N.C.-based Atrium Health launched a program to lower out-of-pocket costs for North Carolina State Health Plan members who use its physicians and hospitals, but State Treasurer Brad Briner warned the program could bankrupt the plan, North Carolina Health News reported Oct. 7.
Atrium, part of Charlotte-based Advocate Health, unveiled the Atrium Health Affordability Protection Program on Oct. 6. Starting Jan. 1, enrolled State Health Plan members will pay copays for primary care, specialty care, outpatient and inpatient services at Atrium that are lower than what they would pay under the plan’s preferred tier, the system said in a news release.
The State Health Plan covers nearly 750,000 state employees, retirees and dependents. To help close a $1.5 billion deficit, it created a tiered provider network for 2027 that rewards members with lower costs when they use preferred providers. Those providers agreed to charge significantly lower rates: Winston-Salem, N.C.-based Novant Health, Chapel Hill, N.C.-based UNC Health and Statesville, N.C.-based Iredell Health System. Atrium was not selected as a preferred provider.
A Sept. 14 agreement moved Atrium’s rural and children’s hospitals into a lower-cost middle tier. It also preserved access to primary care, behavioral health and emergency services. Members would still face higher costs beginning in 2027 for certain specialty care and at Atrium facilities placed in the nonpreferred tier.
The program would significantly reduce member costs in some cases, according to examples Atrium provided. A Standard Plan member having outpatient surgery at a nonpreferred facility would otherwise face a $1,000 copay, a deductible of up to $5,000 and 30% coinsurance. Under the program, that member would pay a $400 copay. For a Standard Plan member, the cost of an inpatient stay at an Atrium urban hospital under the nonpreferred benefit would drop from a $1,500 copay, a deductible of up to $5,000 and 30% coinsurance to a $500 copay.
“We didn’t want our patients to have to choose between the care team they trust and affordability,” Steve Smoot, president of Advocate Health’s North Carolina and Georgia division, said in the release.
Mr. Briner said the problem is Atrium is not lowering the prices it charges the plan. He said Atrium will be the state’s highest-cost major health system in 2027. If many members keep using Atrium, the program could cost the plan more than $100 million next year, he said. The plan would then have to raise premiums for all members and ask the Legislature for more money, he said.
“If this Atrium program remains in place, it will bankrupt the State Health Plan,” Mr. Briner said.
Mr. Briner told North Carolina Health News he believes the program is illegal and that his office is investigating legal options. He urged state employees to disregard Atrium’s announcement ahead of open enrollment, which begins Oct. 12.
Atrium said in a statement shared with Becker’s that it was disappointed with the characterization that its program was designed to harm the plan’s financial stability.
The system said it submitted multiple proposals starting in July to give the plan the same discounts as preferred-tier providers. The plan rejected each one, Atrium said. Without the program, nearly 100,000 State Health Plan members who use Atrium would have faced substantially higher out-of-pocket costs, the system said. Atrium said it is absorbing those added costs so members do not have to.
Atrium also renewed its offer to match preferred-tier discounts and designation. It pushed back on Mr. Briner’s pricing claim, pointing to the plan’s Sept. 14 statement, which said that before the tiered network launched, Atrium was no more expensive than other leading North Carolina health systems. Atrium said the plan’s 2027 benefit design, not its own pricing, is what raises costs for members who use its providers. The system also rejected the claim that offering discounts to members is unlawful.
“We share the concerns about the solvency of the NC State Health Plan, so it’s unclear to us why the Plan rejected our offers to save money for taxpayers and members,” Atrium said.
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