The North Carolina State Health Plan and the state treasurer filed a lawsuit against Charlotte, N.C.-based Atrium Health on Oct. 9, alleging the health system overstepped with a recently announced affordability program and acted in bad faith.
In 2025, North Carolina’s treasurer, Brad Briner, projected that the State Health Plan, which covers current and former teachers and state employees, would operate on a $500 million deficit in 2026 and a $1 billion deficit in 2027, the lawsuit said. The plan does not expect to have sufficient funds as of January 2027. The treasurer is launching a tiered coverage structure, called the Preferred Provider Program, in 2027 to address these financial concerns. This structure consists of preferred, access and nonpreferred tiers.
Winston-Salem, N.C.-based Novant Health, Chapel Hill, N.C.-based UNC Health and Statesville, N.C.-based Iredell Health System joined the preferred tier. However, many Atrium locations are nonpreferred, while Atrium One Health providers joined the preferred tier and some locations and services joined the access tier following a September agreement, according to the lawsuit.
The health system announced the Atrium Health Affordability Protection Program on Oct. 6. According to the system, beginning in 2027, participating State Health Plan members will pay lower copays for primary care, specialty care, outpatient and inpatient services at Atrium than they would with the preferred tier.
“Under the guise of ‘affordability’ and ‘patient choice,’ Atrium has, on the eve of Open Enrollment, threatened the stability and long-term viability of the Plan and the health care coverage of 750,000 North Carolinians by attempting to usurp and circumvent the express statutory authority delegated to the Treasurer to determine the Plan’s coverage and benefits,” the lawsuit, filed in Wake County Superior Court, said.
The complaint alleged the timing of the announcement illustrates bad faith. The lawsuit also alleged Atrium deceived members by portraying an association with the State Health Plan, without disclosing that the state did not approve the program, and “falsely advertising” more affordable costs. The plaintiffs seek a temporary restraining order and a declaration that the program is void and unlawfully usurps the treasurer’s authority, among other relief.
Atrium has said it offered multiple times since July to match preferred-tier discounts and that the plan rejected each proposal. The treasurer’s office said Atrium’s offers were not equal to other systems’ and came after contracts were signed.
“As we have shared before, we created the Atrium Health Affordability Protection Program for North Carolina State Health Plan members, including teachers, first responders and other public servants. Its purpose is simple: to make healthcare more affordable and help patients maintain access to the providers they know and trust,” an Atrium spokesperson told Becker’s. “We strongly disagree with the characterization that this program was intended to harm the financial stability of the State Health Plan. Our focus has always been, and remains, serving patients and making care more affordable for North Carolina’s public servants and their families. We are reviewing the legal filing.”
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