State stops paying hospitals

State stops paying hospitals

- in Uncategorized

Raleigh News & Observer
Insurance payments are suspended during budget negotiation, but workers aren’t directly affected

By JEAN P. FISHER, Staff Writer

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.

The plan’s nearly 600,000 members make up the largest employer group in the state, so hospitals are waiting for a chunk of change that’s potentially worth tens of millions of dollars. Annual payments to doctors and hospitals exceed $1 billion.

"Making hospitals carry the financial burden for all of the state health plan’s members indefinitely is just unfair," said Don Dalton, a spokesman for the N.C. Hospital Association.

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.

Some observers wondered whether politics also was a motive.

Sherry Melton, communications director for the State Employees Association of North Carolina, or SEANC, said that lawmakers, who oversee the state health plan, may wish to use the payment stoppage as leverage to encourage colleagues to pass a long-overdue final budget. Melton said that health plan benefit changes could easily have been authorized in a bill separate from the budget.

For now, the payment issues is not affecting patients directly.

But hospitals would be very inconvenienced by a lengthy disruption, no matter the reason, said Dalton of the hospital association.

"This creates cash flow problems," he said.

William K. Atkinson, CEO of WakeMed in Raleigh, said larger hospital systems that have higher revenue and many different payers can probably handle the disruption in payment. But he said smaller facilities may feel the temporary loss of revenue from the state health plan keenly.

"It taxes resources and it makes people very wary of participating in programs like this," Atkinson said.

Hospitals generally must wait at least 30 days — often longer — to be paid by insurers, so, most likely, hospitals aren’t yet feeling the effects.

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.

Staff writer Jean P. Fisher can be reached at 829-4753 or [email protected]