Monday, July 22, 2019 - 00:00

NC State Health Plan Network Increases Payments to Hospitals and Reopens Sign-Up Period New Offer Increases Profits to Hospitals to Nearly Double

Jul 22, 2019
Contact: (919) 814-3820



 NC State Health Plan Network Increases Payments to Hospitals and Reopens Sign-Up Period

New Offer Increases Profits to Hospitals to Nearly Double


(Raleigh, N.C.) – State Treasurer Dale R. Folwell, CPA, and the State Health Plan (Plan) announced today that the State Health Plan Network is reopening the time for medical providers to sign up for the State Health Plan Network. Additionally, the Plan is increasing its payments to some rural and urban hospitals. paying, on average, almost double the amount paid by Medicare. Medical providers will have between July 26 – August 5 at midnight to sign onto the new, enhanced State Health Plan Network.

This latest announcement comes after the Plan announced in March that it was adjusting rural hospital rates to address concerns of some that the Clear Pricing Project (CPP) could negatively impact rural healthcare. The new reimbursement rates announced today will further increase some “rural" hospitals rates as well as increase payments to urban hospitals.

The new proposal increases payments to medical providers, on average, from 182 to 196 percent of Medicare. Urban hospitals will see their combined inpatient/outpatient ratios go from 178 to 200 percent of Medicare on average. Hospitals will receive an additional $116 million from the proposal announced in March. State taxpayers will save $166 million and plan members will save $34 million in reduced costs.

“The decision to readjust rates comes after many meetings and discussions with hospital officials and others," said Treasurer Folwell. “We're very pleased that 27,000 medical providers have signed onto the Clear Pricing Project. However, we realize that our members need to have additional hospitals for the plan to have coverage. This final offer is very generous; almost doubling the rate that Medicare pays providers. We urge all hospitals to stop the unreasonable attacks and respond to this reasonable offer."

Folwell also announced that he intends to ask the State Health Plan Board of Trustees to create an advisory committee of health care professionals and others to recommend changes going forward including the consideration of alternative payment models like bundlingAlternative Care Organizations (ACOs) and other alternative payment arrangements. The Plan hopes to get the committee together as early as this fall so recommendations can be made for the 2021 plan year.

“We've had hundreds of conversations with hospitals and other medical providers," said Dee Jones, executive administrator of the State Health Plan. “We listened, and we heard you. We are absolutely committed to looking at all options that will maintain price transparency, reduce costs and improve outcomes for our members."

North Carolina taxpayers spend more than $3.4 billion annually on health care for active and retired state and local government employees. More than the entire university or justice systems. Medical and pharmaceutical costs are increasing five to nine percent annually and current spending projections estimate that the Plan will run out of money in 2023 unless action is taken. According to S&P Global, North Carolina's other postemployment benefit (OPEB) liabilities, as a combined funded ratio, are less than five percent funded owing more than $33 billion.

Over the past 10 years, Plan members have seen premiums, co-pays and deductibles steadily increase. Family premiums have nearly doubled. Starting teachers, troopers and other public workers must often choose between the State Health Plan and mortgage payments or food.

“We're doing what's right," said Folwell. “Someone has to expose the secret contracts and dark money that has caused health care costs to sky rocket in this state and across the country. We're doing this so that our members will have an affordable and accessible health care benefit in the future. I urge medical providers to accept this very generous offer. The options – both short and long term – are not good. We need to act now."

Providers should visit for more information and, beginning Friday July 26, to sign up. Plan members can find more information regarding the Clear Pricing Project at

The State Health Plan, a division of the N.C. Department of State Treasurer, provides health care coverage to more than 727,000 teachers, current and former lawmakers, state university and community college personnel, active and retired state employees, and their dependents.