For decades, the state plan has used
Blue Cross and Blue Shield of North Carolina’s commercial network of
providers. Blue Cross NC and medical providers consider fee schedules,
what they charge, associated with this network to be
“confidential.” Subsequently, the fees charged for medical services are
not provided to the plan or its members despite the fact that there are
state and federal guidelines that demand transparency.
“We’re going to be asking a little from a lot of people, and a lot from a few. I’m asking health care providers in the state to help us sustain this benefit for teachers, public safety officers and other public servants,” Folwell said. “For years, the plan has paid medical claims after the fact without knowing the contracted fee. It is unacceptable, unsustainable and indefensible. We aim to change that. This new pricing model will help us ensure the delivery of quality care to our members and better control health care costs, preserve the sustainability of the Plan, and promote transparency for Plan members and state taxpayers like them.”
Starting
on January 1, 2020, the plan will move away from a commercial-based
payment model to a reference-based government pricing model based on a
percentage of Medicare rates to reimburse health care providers for
their services.
North Carolina joins Montana, which launched a reference-based (or transparent) pricing program in 2016.
More on the North Carolina plan:
The State Health Plan is paid with employee contributions and tax dollars. It has $35 billion in unfunded liabilities. Blue Cross and Blue Shield of North Carolina administers the plan, and will continue to do so under the new model.
During a July forum, Folwell challenged BCBSNC and key state medical providers to cut costs annually by $300 million. His impatience bubbled over at an Aug. 30 State Health Plan meeting when he said the insurance giant keeps so much billing information secret he can’t determine how much of charged expenses were waste, fraud, and abuse.
“We share the treasurer’s concern of unsustainably high health care costs, and we will work with the Plan and providers to implement this new strategy,” BCBSNC spokesman Austin Vevurka said in a written statement to CJ. “We hope that providers will continue working with us and the State Health Plan to bring costs down, not just for our state employees but for North Carolinians across the board.”
Under these programs, preferred provider organizations (PPOs) and provider networks go away or are diminished in use, allowing employees to go to any provider they choose with a transparent upfront reimbursement schedule for services.
Reports are that Montana settled on 234% of Medicare for reimbursement. That seems high.
Insurance carriers that have built their business models around PPO networks with byzantine reimbursement arrangements and a frustrating set of mother-may-I-rules designed to steer patients to preferred contracting arrangements.
The other threat from reference-based pricing arrangements is that many carriers have negotiated one set of pricing arrangements with hospitals, physicians, and other healthcare providers, while passing along a less lucrative deal to employers and health plan members, using the discount "spread" between what they negotiated and what they pass along to enhance their financial performance.
North Carolina joins Montana, which launched a reference-based (or transparent) pricing program in 2016.
More on the North Carolina plan:
The State Health Plan is paid with employee contributions and tax dollars. It has $35 billion in unfunded liabilities. Blue Cross and Blue Shield of North Carolina administers the plan, and will continue to do so under the new model.
During a July forum, Folwell challenged BCBSNC and key state medical providers to cut costs annually by $300 million. His impatience bubbled over at an Aug. 30 State Health Plan meeting when he said the insurance giant keeps so much billing information secret he can’t determine how much of charged expenses were waste, fraud, and abuse.
“We share the treasurer’s concern of unsustainably high health care costs, and we will work with the Plan and providers to implement this new strategy,” BCBSNC spokesman Austin Vevurka said in a written statement to CJ. “We hope that providers will continue working with us and the State Health Plan to bring costs down, not just for our state employees but for North Carolinians across the board.”
Under these programs, preferred provider organizations (PPOs) and provider networks go away or are diminished in use, allowing employees to go to any provider they choose with a transparent upfront reimbursement schedule for services.
Reports are that Montana settled on 234% of Medicare for reimbursement. That seems high.
Insurance carriers that have built their business models around PPO networks with byzantine reimbursement arrangements and a frustrating set of mother-may-I-rules designed to steer patients to preferred contracting arrangements.
The other threat from reference-based pricing arrangements is that many carriers have negotiated one set of pricing arrangements with hospitals, physicians, and other healthcare providers, while passing along a less lucrative deal to employers and health plan members, using the discount "spread" between what they negotiated and what they pass along to enhance their financial performance.
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