News: CJ Exclusives

Folwell says hospitals want to derail health-care transparency measures

State Treasurer Dale Folwell wants the U.S. Department of Justice to require all North Carolina hospitals to be transparent in their pricing and recover excessive charges hospitals made to the State Health Plan. He said the N.C. Healthcare Association, which represents hospitals, wants the General Assembly to derail his cost-cutting reforms.

Folwell made those claims Monday, Nov. 26, in a press release alleging “illegal activity” by hospitals. He is calling on the U.S. and N.C. Departments of Justice to recoup what could be hundreds of millions of dollars in overpayments.

Folwell is embroiled in tense negotiations with the state’s major health care organizations as he attempts to stabilize spending on the State Health Plan, which costs more than state appropriations cover.

Folwell said the recent settlement of a civil antitrust lawsuit filed by the U.S. and N.C. Justice Departments against Atrium Health, formerly known as Carolinas Healthcare System, exposed costly practices for consumers, including shielding them from information about high-quality, cost-effective coverage.

“In the spirit of this settlement, I’m calling on all North Carolina hospitals to be transparent and to publish their pricing so consumers can make informed decisions regarding health care,” Folwell said.

He expressed deep frustration earlier this year after a public records request made to UNC Health Care resulted in a heavily redacted copy of the State Health Plan’s contract and fee schedule with BCBSNC. Blue Cross is the third-party administrator for the plan, and negotiates pricing for the plan’s 727,000 public employee members, dependents, and retirees.

UNC Health Care delivered 100 pages of documents with all the prices blotted out. The state-owned hospital said pricing information with BCBSNC is confidential. Folwell poked the providers in a satirical press release that redacted some portions.

“The taxpayers need to understand that the state treasurer cannot find out from the state hospital what the State Health Plan is paying for medical services for state workers,” Folwell said in Monday’s release. “It’s beyond belief.”

To reduce medical costs and increase price transparency for State Health Plan members, Folwell announced in early October a new reimbursement strategy. It would use pricing based on a percentage higher than published government rates, with an average 77 percent profit.

Monday’s press release said the hospital association “has vehemently opposed transparency in pricing,” and plans to ask the General Assembly to stop any moves toward transparency and lower costs.

The release cited an Oct. 24 N.C. Healthcare Association statement that said, in part, “Our provider community remains resolute and committed to working with the Treasurer or our General Assembly to develop a plan that serves the best interests of all North Carolinians.”

“It’s too early to say what we may take a look at during the long session next year, but once the new caucus is seated in January we will sit down and see what our priorities are for 2019,” said Bill D’Elia, spokesman for Senate leader Phil Berger, R-Rockingham. A request for comment from House Speaker Tim Moore, R-Cleveland, went unanswered.

N.C. Healthcare Association Vice President Julie Henry said she had just received Folwell’s press release and wasn’t prepared to answer questions.

“It is difficult to know where the Treasurer obtains his data points,” Henry said. She said she doesn’t know why BCBSNC doesn’t provide the plan the information Folwell seeks.

If the hospital association stops the reforms, then premiums, copays, and deductibles for plan members likely will increase, Monday’s release stated. A projected $300 million in savings to taxpayers and $65 million in savings to plan members won’t occur. That could affect the long-term viability of the plan.

“In North Carolina, we already spend $3.4 billion a year in taxpayers’ money for state employees and retiree health care. Additionally, we owe $30 billion for long-term health care costs and we don’t even know what we’re supposed to pay for medical services,” Folwell said. “If something isn’t done now, then other core functions of government like education, public safety, and roads will be financially impacted.”

Folwell said after his legal team reviews the settlement, he will submit it to the U.S. DOJ.

“We’re doing what’s necessary at this point in our state’s history because others didn’t,” Folwell said. “As chaotic as health care is, we have not lost our commitment on focusing all of our attention on the members and taxpayers like them. It’s not enough to just point out problems. Ultimately they have to be fixed.”