State Stops Paying Hospitals (Excerpted)
Source: International Foundation of Employee Benefits Plans
The state health plan for state workers, teachers, retirees and their dependents hasn’t paid hospitals since July 1 — and won’t until lawmakers pass a state budget that finalizes proposed changes to plan benefits.
Health plan leaders decided to suspend payment because the budget is expected to include changes that would increase the amount that members of the Teachers’ and State Employees’ Comprehensive Major Medical Plan pay in out-of-pocket medical expenses. By stopping payments, the plan hopes to avoid situations where it might pay more than its share of medical bills and then have to seek money back from hospitals or require additional payment by members, according to an Aug. 3 notice sent to hospitals by George C. Stokes, the health plan’s executive administrator. [Full text at site.]
This isn’t anything new. The State Health Plan as a whole has stopped payments many times in the past for many different reasons, usually having to do with budget, funding and/or politics. The plan also has a policy of holding claims for employees at agencies who have not yet paid the monthly premium. (This used to be a considerable source of frustration for me as, in my experience, it could take up to five business days for the administrator to update the system after the premium was paid. That doesn’t sound like much until it’s pointed out that five business days is 25% of a month.)
It’s interesting to note that, since we’re now five weeks past July 1, this means that the State Health Plan is in violation of North Carolina’s prompt pay law. Of course, I’m sure there’s a loophole that protects the State Health Plan (if nothing else, governmental immunity, since it’s a self-insured plan owned by the state). While I was on the State Health Plan, though, several of my providers — who know what I do for a living — noted that my claims were sometimes paid so late that they received the punitive interest under the prompt pay law. I’ve often wondered how much money the taxpayers lose due to the State Health Plan’s failure to observe prompt pay guidelines.
There’s one other statement in this article worth mentioning and clarifying as well:
The state health plan had also stopped paying physicians for care given since July 1. But Stokes said in an interview he gave the go-ahead this week for Blue Cross and Blue Shield of North Carolina, which processes the plan’s medical claims, to begin paying those claims. Stokes said benefit changes being considered by the General Assembly apparently would not change members’ physician co-payments, so he does not anticipate the plan’s payments to doctors to change.
It should be made clear that the phrase “physician co-payment” as applied to the State Health Plan means something entirely different than the phrase as applied to most other health plans. In the State Health Plan, provider visits are subject to both co-payments and deductible and coinsurance. The only time a State Health Plan member only pays the physician co-payment (this excludes prescriptions) is when that member has reached the annual deductible and coinsurance maximum — which, like most other plans, has gone up during recent years. It’s misleading, and it leads taxpayers to believe that State Health Plan members have low out-of-pocket costs. Quite the contrary.
Someone recently made a comment to me about not understanding why I’d given up the State Health Plan “since it’s so good” in order to go onto a private company’s health plan. My answer was simple: the new plan pays claims on time and the word “co-payment” means exactly that: a co-payment. In addition, since my providers share claims information with me, I’ve learned that even though my new plan has a lower rate schedule than the State Health Plan, they prefer it since claims are paid on time. (You don’t want to get me started about State Health Plan rate schedules. That’s one of the few areas where I actually don’t blame the state; they’ve tried to lower the schedule.) In my mind there was never any question about “giving up” the State Health Plan. It’s not all that great. Unfortunately, it also doesn’t seem to be improving anytime soon.