State Treasurer explains the State Health Plan's Clear Pricing Project
Jan 28, 2019
Clear Pricing, Lower Cost, More Power in Your Hands
The following column by State Treasurer Dale Folwell appears in the February 2019 edition of The Reporter.
The State Health Plan has announced a bold new strategy called the Clear Pricing Project that changes the way we pay medical providers and hospitals for the services they provide to the Plan’s more than 727,000 members.
Beginning January 1, 2020, the Plan will pay providers based on a percentage above Medicare, plus an average profit of 77%. Medicare provides a standard reimbursement rate that is transparent and adjusts for differences such as location. This will allow the Plan to move away from how it currently pays providers and treat the Plan like a government payer instead of a commercial payer. Seven years ago, SEANC proposed a similar strategy as a way to reduce costs and provide clearer pricing for members.
This effort will provide an approximately 80% increase in reimbursements for most independent primary care providers, mental health providers and some critical access hospitals located in rural areas.
Why is the State Health Plan Doing This?
The Clear Pricing Project is part of broader effort to keep rising health costs under control while promoting transparency, affordability and quality care.
For decades, the Plan has used Blue Cross and Blue Shield of North Carolina’s (Blue Cross NC) commercial network of providers. Blue Cross NC and medical providers consider their fee schedules (what they charge the Plan) to be confidential.
In fact, when we asked the state hospital, UNC Healthcare, to tell us how much the Plan pays they sent us over 150 pages of blacked out documents. In other words, they’ll tell us what they charge for medical services, but not how much we’re supposed to pay. It’s like grocery shopping at a store that doesn’t list its prices, and you don’t know how much you owe until you check out.
When you buy a cup of coffee or a tank of gas, you know the price and value of what you’re consuming. But with health care, the consumer has no idea of the price or value of what they are getting. We want to you to have the power to make informed decisions about what you spend for medical services. After all, this is your money.
Will Members See a Savings?
Members themselves could save over $60 million in reduced out-of-pocket expenses. That’s more money for you and less money for hospitals and providers. Right now, a starting teacher or state trooper has to work one week out of every month just to afford the family premium on the State Health Plan. The Clear Pricing Project has the potential to generate savings of $300 million, which would allow the Plan to reduce premiums and make health care more affordable for public workers and their families.
How Can Members Help?
The next time you are in a provider’s office, tell them that you want them to treat the people who teach their children, protect them from criminals, pave their roads and provide other essential government services to be part of the Clear Pricing Project.
With your help, we can bring much-needed transparency and affordability to the State Health Plan.