Charlotte, N.C.-based Atrium Health and the North Carolina State Health Plan have signed a multiyear agreement, ending a legal dispute over the system’s affordability program and its placement in the plan’s 2027 provider network.
Under the agreement, all remaining Atrium hospitals and physicians will move into the plan’s in-network Access tier, allowing members to continue receiving care at existing Atrium facilities, including specialty care services.
The deal also ends a contentious legal battle between Atrium and the plan, which covers about 750,000 state employees, teachers, retirees and dependents. The State Health Plan will withdraw its lawsuit against Atrium, and the health system will discontinue its faffordability protection program when the new contract takes effect, according to an Oct. 27 news release.
Atrium launched the program Oct. 6 to waive deductibles and coinsurance for State Health Plan members receiving care at its facilities, replacing those costs with copays lower than the plan’s preferred tier. The State Health Plan and State Treasurer Brad Briner sued Atrium Oct. 9, alleging the program undermined its new provider network and threatened the plan’s finances.
A North Carolina Superior Court judge denied the plan’s request for a temporary injunction Oct. 13.
The dispute stemmed from the plan’s new three-tier provider network, which takes effect in 2027. While several competing health systems secured preferred-tier status, many Atrium locations were initially placed in the nonpreferred tier. A September agreement moved some Atrium providers and services into higher tiers.
“We hope this agreement provides members with more clarity about provider tiers and puts concerns to rest while avoiding drastic premium and benefit changes statewide,” Mr. Briner said.
Steve Smoot, president of Advocate Health’s North Carolina and Georgia division, which includes Atrium, said the agreement ensures members can continue accessing their trusted physicians and care teams.
“We are grateful to move forward together with a shared commitment to making high-quality care more accessible and affordable for every State Health Plan member who depends on us,” Mr. Smoot said.
The deal comes as the plan’s open enrollment period for 2027 coverage runs through Nov. 6. It also comes amid mounting financial pressures for the State Health Plan. On Oct. 27, its board approved a $400 million funding adjustment from the Retiree Health Benefit Fund contribution after higher-than-expected costs accelerated reserve losses.
The plan warned that it could run out of cash by the end of 2026 if recent financial trends continued. Its new tiered provider network, along with premium and benefit changes approved for 2027, is expected to generate a slight cash gain next year.
“Today’s discussion underscores the serious financial pressures facing the plan and why the changes being implemented in 2027 are necessary as we work to protect the plan’s ability to pay members’ claims,” Mr. Briner said in an Oct, 27 news release. “The approved action will help address the immediate cash challenge as the plan continues its work toward a more sustainable financial path.”
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