Briner: Atrium Plan Could Hasten State Health Plan Bankruptcy

By Theresa Opeka
Carolina Journal

RALEIGH – State Treasurer Brad Briner, who oversees the North Carolina State Health Plan, called Atrium Health’s Tuesday announcement of a new affordability program for SHP members nothing more than a “shell game.”

According to a press release, the Atrium Health Affordability Protection Program is intended to address the higher healthcare costs that the SHP’s new tiered provider structure imposes on patients seeking care at Atrium Health.

Through the new program, Atrium said enrolled members will have the lowest copays and overall share of costs for care at any Atrium Health facility or provider, including primary and specialty care, outpatient and inpatient services, than at any other health system across North Carolina.

Atrium gave an example of a member receiving outpatient surgical care at a non-preferred facility under the SHP’s tiered structure within the Standard Plan. The member would face a $1,000 copay, a deductible of up to $5,000 for an individual, and then 30% coinsurance. Under the new Atrium program, Atrium said the member’s cost would be reduced to a $400 copay, saving that member thousands of dollars.

Steve Smoot, president of Advocate Health’s North Carolina and Georgia Division, of which Atrium Health is part, said in the release that, regardless of how Atrium Health is categorized under the State Health Plan’s new structure, the new Atrium Health Affordability Protection Program is designed to ensure members can continue receiving care from Atrium Health at the lowest cost-sharing available under the State Health Plan.

“What Atrium is trying to do is pay co-pays on behalf of our members so that they can go to Atrium,” the treasurer told reporters after the Council of State meeting on Tuesday. “Sounds good, right? The problem is that our total cost goes up by 30 to 40%, so you might be paying less tomorrow for your copay, but I assure you, you will pay a lot more the day after tomorrow, and that’s the problem we’ve been trying to manage in the State Health Plan.”

He said the program also violates state and federal law.

“So, I would just encourage people to ignore it,” Briner said. “It’s not going to see the light of day. I know what they’re trying to do.”

The State Health Plan Board of Trustees voted in July on a new provider tier system, including Preferred, Access, Non-Preferred, and Out-of-Network.

Open enrollment for the plan begins on Oct. 12, and the treasurer said there won’t be any changes to it at this point.

“Atrium put out a press release to try to essentially change the Preferred Provider program at the last minute,” Briner told reporters. “They can’t do that. We run the plan for our members benefit in the long run. Their proposal is short-term oriented, long-term extremely costly, and so we can’t let it go forward.”

He said that under state law, the state treasurer and the SHP have the authority to manage the plan, and that what Atrium is trying to do is manage it for its own benefit.

“So, you can see why that would be against state law,” Briner said. “There’s also a federal law called Stark, which essentially prohibits you from doing exactly what they’re doing. And so we think it’s problematic from a lot of perspectives, not the least of which is it bankrupts the State Health Plan much sooner than it would be left alone. And our whole job is to keep it around to benefit our members for the long run. This works against that.”

Atrium’s response: We are disappointed; offer remains on the table

“We designed the Atrium Health Affordability Protection Program to meet the needs of our patients in the North Carolina State Health Plan — teachers, first responders, and state employees,” a spokesperson for Advocate Health said in an emailed statement to Carolina Journal. “We are disappointed with the characterization that this program was designed to harm the financial stability of the Plan. The Atrium Health Affordability Protection Program’s sole purpose is to make healthcare more affordable for North Carolina’s dedicated public servants and their families.”

The spokesperson said that, in July, multiple proposals from Atrium, submitted to match the same discounts offered by the plan to other providers in the Preferred Tier, were rejected.

“As a result, nearly 100,000 NC State Health Plan members at Atrium Health would have faced substantially higher out-of-pocket costs to continue seeing the physicians and care teams they know and trust,” the spokesman said. “The Atrium Health Affordability Protection Program solves this problem by lowering members’ costs, not increasing them. In essence, Atrium Health is absorbing these additional costs so that NC State Health Plan members don’t have to.”

The spokesperson told CJ that Atrium Health’s offer to match the Preferred Tier discounts and designation remains on the table.

They also pointed to a press release last month about an agreement to add 12 Atrium hospitals to the Access Provider Tier that “the State Health Plan explicitly stated that Atrium Health is not currently the most expensive provider.”

The spokesperson also said that the 2027 NC State Health Plan design, not Atrium Health’s pricing, will result in members being charged more to use Atrium Health providers and facilities.

“We have heard loud and clear from thousands of NC State Health Plan members that this decision was not the right one for themselves and their families, who depend on Atrium Health for their care,” they added. “We share the concerns about the solvency of the NC State Health Plan, so it’s unclear to us why the Plan rejected our offers to save money for taxpayers and members. We also disagree with the assertion that offering discounts to NC State Health Plan members is somehow unlawful.”

Briner also critical of Atrium-wakeMed merger

Briner has also been vocal in his criticism of the Atrium Health and WakeMed merger, which the Wake County Commission voted 5-2 in favor of at its Sept. 21 meeting.

In May, he, along with others, voiced concerns about the proposal.

“There is a simple business principle that when suppliers consolidate and competition is reduced, it is the consumers who suffer,” Briner said in a prepared statement. “This has been proven to be true time and again in the health care landscape, where prices continue to rise and patients are left with mounting medical debt.”

In his Sept. 22 video message, the treasurer said he remains profoundly concerned about the deal, adding that nothing has fundamentally changed from the original proposal, and that WakeMed’s CEO, Donald Gintzig, said in an interview he hoped costs would go up if the merger went through.

Briner also said it will make it harder for Stein’s Health Care Affordability Commission, of which he is co-chair, to succeed, and will make it even harder to keep the State Health Plan and other employer plans solvent.

He told reporters on Tuesday that State Attorney General Jeff Jackson would review the proposal.

“I don’t know that there is much he can do beyond that,” Briner said. “The Federal Trade Commission will look at this. They have historically not looked at cross-market mergers like this as problematic. We would respectfully disagree with that. These types of mergers create leverage for folks like Atrium who can charge us more, and so I don’t know how we wouldn’t be harmed by that.”

Theresa Opeka is the Executive Branch reporter for the Carolina Journal.