State Health Plan Releases New Provider Contracts

As previously reported, the State Health Plan, through its “Clear Pricing Project” is moving to a reference-based pricing system based on Medicare Rates. Physician professional services will be paid at 160% of Medicare rates. This represents an increase for some independent primary care physicians.

The new contracts, recently approved by the Department of Insurance, will form the basis for the new North Carolina State Health Plan Network. You can see specific contractual language and a separate document about rates by going to this website.

Hospital rates will be two-tiered for both inpatient and outpatient services, depending on whether it is a rural or non-rural hospital. Seventy-one of the state’s hospitals are deemed rural. Rural hospital rates will be 200% of Medicare for inpatient services and 230% for outpatient services. Non-Rural hospital facilities will receive 160% of Medicare rates for inpatient services and 230% for outpatient services in 2020. In 2021 for non-rural hospitals, the inpatient rate will be 155% and outpatient rates will be 200%.

Once the State Health Plan network is established and the Clear Pricing Program implemented, the Plan will begin working with providers to explore other strategies and payment alternatives designed to manage utilization and improve outcomes for our members.

The State House passed legislation that would slow changes to the State Health Plan down, including having a Study Committee look at alternatives for saving the plan money. However, the state Senate has not debated the legislation, and it is unclear whether they will discuss the bill or not.

In the meantime, practices should evaluate the new contracts offered by the State Health Plan as soon as possible. Necessary documentation needs to be retuned by June 30th, 2019, in order to remain in network beginning January 1st, 2020.