Raleigh: Judge denies State Health Plan request to stop Atrium copay program

A Superior Court judge on Tuesday denied the State Health Plan's request to block Atrium Health's copay program.

The N.C. Department of State Treasurer said the judge, ruling from the bench, turned down the Plan's request for a temporary restraining order against what the Oct. 13 release called Atrium's "Affordability Program." Atrium has named the same effort the Affordability Protection Program.

The treasurer's office said this was not the outcome it wanted. It also said the judge acknowledged the Plan's argument that the program could cause irreparable harm. Other legal pathways are still being explored, the release said.

The Plan said it now has to consider all options to stay solvent for 2027 and beyond. Those options include raising all member premiums — whether or not the member uses Atrium — by as much as $50 a month in 2028, which the Plan said could more than double 2027 premiums. That increase has not been adopted. The treasurer's office said it is one option under review.

Treasurer Brad Briner, who chairs the State Health Plan Board of Trustees, said every action is guided by a commitment to keep members' care affordable. The Plan is funded by member and taxpayer dollars, he said, and those resources are finite. When a single provider can change the Plan's cost structure, dictate how benefits are designed or undermine the tiered network, he said, it could be catastrophic for the Plan, its members and taxpayers.

Carolina Journal also reported the ruling.

What the Plan asked the court to do

The treasurer's office filed in Wake County Superior Court on Friday, Oct. 9. It says state law lets only the treasurer set the Plan's copays, deductibles and coinsurance. Friday's release called Atrium's program an "unlawful pricing scheme" and said it would put the Plan "on a path to bankruptcy."

The Plan covers about 750,000 members, that release said. Those members include teachers, state employees and university staff in Wake County and across North Carolina.

The Plan is changing how it pays hospitals in 2027. A four-tier network — Preferred, Access, Non-Preferred and Out-of-Network — begins Jan. 1, according to the Plan's open-enrollment page. Members pay the least at Preferred hospitals.

That page names UNC Health, Novant Health and Iredell Health as Preferred systems and says no other health systems will be added in that tier. Friday's treasurer release said Duke Health is an Access partner and that those systems offered larger discounts than Atrium. It also said Atrium's offer came after contracts were already signed.

The Plan says the tiered network is meant to keep it solvent. On its open-enrollment page, it says that without changes it would have needed a 21% premium increase and benefit cuts.

What Atrium says the program does

Atrium announced the program on Oct. 6. It says the program starts Jan. 1, 2027, and will give enrolled members lower copays at Atrium hospitals and clinics than they would pay under the Plan's Preferred Tier.

Atrium says the State Health Plan left it out of the Preferred and Access tiers at first, then reached an agreement announced Sept. 14 that kept access to primary care, behavioral health, emergency services, children's hospitals and rural hospitals. Members would still pay more for some Atrium specialty care, Atrium said, and the new program is meant to close that gap.

Atrium published two examples. It said an outpatient surgery that would have carried a $1,000 copay, a deductible of up to $5,000 and 30% coinsurance would drop to a $400 copay, and an inpatient stay at one of its urban hospitals would drop from a $1,500 copay plus the same deductible and coinsurance to a $500 copay. Those figures come from Atrium, not from the Plan.

Steve Smoot, who leads Advocate Health's North Carolina and Georgia division, said Atrium did not want members "to choose between the care team they trust and affordability."

The treasurer's office says lower copays at Atrium would not make care cheaper for the Plan. It says Atrium would still bill the Plan at current rates and that other members and taxpayers would cover the difference.

Tuesday's treasurer release did not include a new statement from Atrium.

What Triangle members should know

Open enrollment for 2027 is underway. The treasurer said Friday that the window has been extended through Nov. 6. The Plan's site lists Oct. 12 through Nov. 6 for active members.

Active members who do nothing are placed in the Standard PPO Plan, the Plan says. They have to act if they want the Plus PPO Plan or if they need to change dependents.

The treasurer's office says Atrium's program does not change coverage for people on the Humana Medicare Advantage Plan.

The Plan's member site is shpnc.gov. The treasurer's press line is 919-814-3820.