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Patients at some Atrium hospitals and associated clinics no longer will see higher out-of-pocket and deductible costs when North Carolina State Health Plan’s new tiered hospital network takes effect next year.
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A dozen of Atrium’s hospitals and associated clinics will now be included in the “Access” tier under the Plan’s new tiered hospital network, taking effect Jan. 1, 2027, according to a news release from the treasurer’s office and Atrium. “Access” is a mid-level tier in which members’ costs will largely remain the same in 2027 as they were in 2026 when receiving care at those locations.
The decision comes after pushback from an earlier announcement that designated the facilities as “non-preferred.”
The revised designation represents an improvement for members who use those locations, who would have faced higher costs under Atrium’s previous non-preferred designation.
The SHP serves nearly 750,000 teachers, state employees, retirees and their dependents across North Carolina.
“Our objective has always been clear and consistent — we must offer our members high-quality care for affordable prices,” said state Treasurer Brad Briner, a Republican who oversees the State Health Plan, in a news release.
“For the Plan, that must include reduced prices from providers as compared to what they are charging today,” Briner said. “This agreement includes meaningful affordability commitments from Atrium Health that help us improve access for members while supporting the long-term sustainability of the Plan.
“This new provider tier system, which has now forged partnerships with all of the state’s leading hospital systems, is putting us on the right path.”
In an effort to reduce healthcare costs and improve the plan’s finances, the State Health Plan has been negotiating with health systems across different regions of the state for months. The Plan has been choosing which providers would be in which category, based on who provided the best discounts for the plan and quality, and also on whether there was enough access in the area, particularly rural areas, SHP leadership has previously said.
Health systems selected as “preferred” would get more patient volume directed towards them.
The earlier decision to put Atrium as “non-preferred” led to back-and-forth negotiations between Atrium and the SHP, as well as pushback in an August letter from Republican Rep. Brenden Jones, the House majority leader, who said it could cause “damage” to state employees, retirees and rural health care across North Carolina.
House Speaker Destin Hall’s office also told The News & Observer that while Hall supported the “Treasurer’s goal of stabilizing the State Health Plan,” his office had” 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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Michael Parkerson, executive vice president and chief managed health officer for Advocate Health, which Atrium Health is a part of, said Atrium recognized “many State Health Plan members have been concerned about what these changes could mean for them and their families.”
“This agreement provides greater clarity and preserves access to important services, including primary care, emergency care, behavioral health services, rural care, children’s hospitals and continuity of care for patients with complex medical needs,” Parkerson said in the news release.
Atrium is seeking to merge with WakeMed, which was designated as non-preferred. The news about a possible merger came out via a news release on a Friday afternoon in mid-May, with a vote scheduled for the following Monday. County commissioners delayed their decision following pushback, and WakeMed held a series of public forums on the topic.
When the news came out, Briner was one of the most vocal critics of the deal, saying it could increase costs for North Carolinians, including state employees on the plan. Tom Friedman, Executive Administrator of the SHP, said at a June board of trustees meeting that premiums for every State Health Plan member could increase between $7 and $11, if the merger occurred due to Atrium charging more for care than WakeMed.
While a dozen locations have been picked in the Access tier, there are still several Atrium facilities that are non-preferred.
The following Atrium locations will now be in the Access tier, according to a news release from Briner’s office, which included a document breaking down access by hospital:
Region 2 (Northern Piedmont / Triad area)
Region 3 (Greater Charlotte metro)
Region 5 (the Sandhills / South-Central NC)
The announcement that Atrium would be non-preferred came in July during a State Health Plan meeting, when leaders announced that UNC Health and Novant Health had been selected as preferred providers under the new network.
Then, in mid-July, the treasurer’s office announced that WakeMed — which had previously been expected to land in the Access tier — had been designated as non-preferred. Duke Health was named as the Access provider after Duke reached out to the plan and offered “a significant discount off its current rates,” said Friedman, in a written statement at the time. WakeMed called the decision “extremely damaging” for the health system and the state employees who rely on it.
Atrium, meanwhile, said in a statement that it “was never engaged to compete for the full scope of services.” It pressed for greater transparency around how the tiers were determined and said it had asked to meet with State Health Plan leadership. While the board’s vote on the preferred-provider network happened in public, the negotiations behind it did not.
In response, Briner’s office issued a statement defending the roughly yearlong process, noting it had repeatedly tried to bring Atrium into the fold, including executive-level meetings as recently as June. The office likened Atrium’s reaction to “a World Cup team that loses and immediately blames the referee,” adding that the selection process followed “clear intentions and expectations, followed by independent evaluation. Not every bidder can win, but you automatically put yourself in the (L) column if you don’t ever enter a bid.”
But on July 28, Briner’s office and Atrium issued a joint statement saying State Health Plan leaders, including Briner, had met with Atrium Health leaders in Raleigh. They said the meeting was “constructive, with both entities expressing a commitment to working toward finding a path forward for the State Health Plan and its members, and providing an update within a few weeks,” said the joint release.
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