A North Carolina Senate committee endorsed a bill June 11 that would cap hospital CEO pay but removed a provision that could have affected a proposed health system combination.
The North Carolina Senate Health Care Committee, chaired by Sen. Jim Burgin, R-Harnett, amended Senate Bill 978 to remove the merger-related provision, but it still includes provisions that would cap nonprofit hospital CEO pay at 400 times the compensation of the lowest-paid full-time employee, prohibit noncompete clauses for physicians, physician assistants, nurse practitioners and registered nurses, and add whistleblower protections for those same professionals who report violations of medical staff bylaws or raise patient safety concerns.
The bill defines “CEO” as the highest-ranking executive in a hospital responsible for managing overall operations, regardless of actual job title. Qualifying hospitals where the CEO’s annual compensation exceeds the limit would be assessed a civil penalty equal to the amount of the CEO’s annual compensation. Compensation includes salary, bonus payments, incentive payments, severance and value of hospital-provided vehicles or housing. If passed, qualifying hospitals would be required to report minimum compensation and CEO compensation for the preceding year by March 1 annually.
North Carolina is not the first state to target hospital executive pay. In California, a ballot initiative eligible for the November general election would cap pay at $450,000 annually for hospital executives, managers and administrators. In Vermont, a bill introduced in the state Senate in January 2025 would limit executive and clinical leadership pay to no more than 10 times the lowest-paid direct care employee. The push comes as an August study found the pay gap between CEOs and average employees at U.S. nonprofit hospitals widened between 2009 and 2023.
The bill also protects healthcare professionals from retaliation after reporting violations of medical staff bylaws, including termination, demotion, pay reduction or hostile work environment. It also prohibits nondisclosure agreements that prevent employees from discussing patient safety concerns with regulatory or licensing entities, as well as certain noncompete clauses.
North Carolina Sen. Julie Mayfield, D-Buncombe, said the whistleblower and noncompete protections stem from issues within Asheville, N.C.-based Mission Health, citing the hospital’s four immediate jeopardy citations since 2019, NC Newsline reported June 11. Ms. Mayfield alleged employees were fired after speaking with state and federal surveyors and that providers were forced to leave the area due to noncompete contract clauses. Nashville, Tenn.-based HCA Healthcare acquired Mission Health, a six-hospital system, for $1.5 billion in 2019.
“We respectfully disagree with that characterization,” a health system spokesperson said in a June 15 statement shared with Becker’s. “Mission Hospital is committed to providing high-quality care for the patients and communities we serve, and that commitment is reflected in both our investments and our outcomes.”
The spokesperson pointed to $10 million in pay increases for 2026, expanded cancer care capacity, investments in facility improvements and advanced technology and achieving level 1 trauma center verification from the American College of Surgeons.
“Additionally, Mission Hospital offers numerous avenues for employees to identify issues and share feedback, including anonymous reporting options, employee engagement groups, patient care councils, and established processes for submitting and tracking operational and patient care concerns,” the spokesperson said. “We not only encourage team members to raise concerns, we expect it. Our focus remains on supporting our workforce and delivering safe, high-quality care to the communities we serve.”
Hospital merger oversight provision dropped
The committee also amended the bill to remove a provision that would have required the state auditor, Attorney General Jeff Jackson and state treasurer to jointly review proposed hospital transactions valued at $5 million or more. The provision was removed to avoid interfering with the proposed combination between Raleigh, N.C.-based WakeMed Health and Hospitals and Atrium Health, part of Charlotte, N.C.-based Advocate Health. “They’re so far into that. I really feel like, doing this right now, I don’t want us to put a finger on it one way or another,” Sen. Burgin told reporters, according to the News and Observer, adding that the oversight provisions “should have already been in place.”
“We appreciate the senators preserving the authority of the Wake County commissioners to make the best decision for the county,” WakeMed said in a statement shared with Becker’s. “We also look forward to continued conversations with the commissioners and the community on how our proposed strategic combination with Atrium Health will improve access to healthcare services for all Wake County residents.”
WakeMed and Atrium Health announced plans May 1 to combine into a single system. Under the proposed agreement, nonprofit WakeMed would join Atrium Health in a deal the systems said would bring a $2 billion investment to Wake County to expand facilities, add jobs and broaden access to care statewide. Wake County commissioners were set to vote on changing WakeMed’s articles of incorporation to approve WakeMed’s participation in the combination, but they delayed that vote after state officials warned the deal could drive up healthcare costs and called for additional public input. On June 8, WakeMed and Atrium Health held a work session with the Wake County Board of Commissioners as the review process continues. The proposed combination still requires review by Mr. Jackson’s office and approval by the Federal Trade Commission.
“The North Carolina Healthcare Association continues to engage with lawmakers to express concerns about proposals that would expand government involvement in hospital operations. These responsibilities are already overseen by hospital governing boards, which provide appropriate accountability and local oversight,” the association said in a statement shared with Becker’s.
Becker’s has reached out to Atrium Health and will update this story if more information becomes available.
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