North Carolina's state health plan mulls reimbursement cuts

North Carolina's state treasurer is set to reveal a plan that would change how providers are reimbursed, according to the News & Record.

Five things to know:

1. North Carolina Treasurer Dale Folwell is proposing to shift the state's health plan, which covers more than 720,000 teachers and other state employees, to a payment model that reimburses providers based on a percentage above Medicare rates.

2. The proposal would also give providers an additional and adjustable profit margin, and "treat the plan like a government payer, instead of a commercial payer," Mr. Folwell said.

3. Mr. Folwell argues the proposal could save state health plan members up to $60 million initially and $300 million overall, according to the News & Record. The state health plan reimbursed $3.2 billion worth of medical and pharmaceutical services in 2017.

4. Blue Cross, which is the third-party administrator of the state health plan, said it shares the "treasurer's concern of unsustainably high healthcare costs, and we will work with the plan and providers to implement this new strategy."

5. The North Carolina Healthcare Association has strongly opposed the measure. According to the News & Record, Robert Seligson, MD, CEO of the North Carolina Medical Society, said in October that "over the past 40 years, unilateral rate cuts to physicians and health systems have not worked to achieve long-term savings. Rather, rate cuts often result in reduced access to care for patients, particularly in rural areas, and jeopardize the financial stability of smaller physician practices and health systems."

For the full report, click here.

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