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A leader in the state House of Representatives is criticizing the State Health Plan’s move to a new tiered provider network set to take effect in January, in which some hospital systems are designated as preferred providers and members are steered toward them for lower costs.
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Republican Rep. Brenden Jones, the House majority leader, posted a letter on X criticizing the system, saying it could cause “damage” to state employees, retirees and rural health care across North Carolina.
Jones wrote that a “substantial number of House members are alarmed by this decision.”
In July, the State Health Plan announced the hospitals and their associated providers included in its preferred provider network. UNC Health, Novant Health and Iredell Health are preferred systems, while WakeMed, Atrium Health, Granville Health System and some Duke LifePoint facilities are non-preferred, meaning members generally will pay more to use those systems, and so will the State Health Plan. Duke Health was designated as an access provider, a middle tier where member costs will remain largely unchanged from current levels, according to the plan. Rural hospital providers will largely be designated as access-level providers, SHP officials have previously said.
The State Health Plan has said the new system is intended to address rising healthcare costs. The plan previously faced a projected $507 million deficit for 2026, but that gap has since been closed.
The UNC Health contract runs for 10 years, while Novant Health’s agreement runs through 2027 with options to renew through 2030, according to plan officials. The plan does not have a contract with Iredell Health.
With the State Health Plan serving members in all 100 counties, Jones said, “it should not use their health benefits to punish them for living in rural communities, force them away from trusted physicians, or steer patients and revenue to a handful of favored hospital systems.”
Jones called on the State Health Plan to “reverse course” or suspend non-preferred classifications for rural hospitals until it can demonstrate members have access to comparable hospitals nearby.
The State Health Plan is housed within the Department of State Treasurer, led by Republican Brad Briner, who took office in 2025. Republicans control the state House and Senate.
Demi Dowdy, a spokesperson for House Speaker Destin Hall, said in an email that Hall “supports the Treasurer’s goal of stabilizing the State Health Plan, but we have heard from members and citizens who are concerned about the impact on access to healthcare both in rural North Carolina and on maintaining independent hospital systems across the state.
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“We understand the treasurer and Atrium are still working through many of these issues, and we appreciate that he has already announced plans to examine them further and engage in additional conversations before the policy takes effect,” Dowdy wrote.
The State Health Plan and Atrium say they are in negotiations. They said in a joint statement in late July that they were committed to providing an update to members within a few weeks.
The State Health Plan said through spokesperson Loretta Boniti that Atrium “has presented the Plan with several options for consideration, and we are working toward finding a solution that is viable for both entities. We appreciate Atrium coming to the table with offers that put our members’ healthcare first.”
Jones’ criticism specifically references Columbus Regional Health System in Whiteville, which is managed by Atrium Health and was designated as a non-preferred provider.
Jones said the designation would affect patients who “have spent years establishing care with local physicians” and would be “forced to choose between paying more or traveling further to begin again with unfamiliar doctors.”
Jones represents Columbus County and part of Robeson County.
Jones said the concern is not unique to Columbus Regional but applies to rural communities across the state. He wrote that his wife underwent major surgery and has established care with physicians familiar with her medical history and continuing needs. Moving to another doctor, he wrote, could mean requiring more than an hour of travel and abandoning doctors who understand her condition.
Beyond the patient impact, he said rural hospitals will also feel the burden and that it will lead to rural hospitals having to compete against large hospital systems, facing pressure to “cut services, affiliate, sell, or merge.”
At the time of the July announcement, The News & Observer asked the State Health Plan how hospital systems that were not selected as preferred providers would have an opportunity to compete for preferred status in the future. Boniti said in an email that “every contract has a mutually designed ability for both entities to choose to contract differently or not at all in the future.” She wrote that the plan sought longer-term partnerships for stability for members and to move from just cutting costs to improving health.
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This story was originally published August 7, 2026 at 1:19 PM.