Big Charlotte physician group supports treasurer’s health care pricing strategy

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Tryon Medical Partners, the Charlotte area’s biggest independent physicians’ practice, says it signed a contract to join the North Carolina State Health Plan network. The move aligns the 90-physician group with State Treasurer Dale Folwell’s plan for a reimbursement schedule that the N.C. Healthcare Association has attacked with a multimillion dollar advertising campaign suggesting patient service disruption and major financial harm to the state’s hospitals.

The N.C. State Health Plan covers more than 700,000 teachers, state employees and retirees, making it the biggest health care purchaser in North Carolina. Folwell wants to use that size and clout to force changes in payments to hospitals and physicians.

Tryon Medical Partners CEO Dale Owen, a cardiologist, says he has discussed the contract with leaders of 10 other major medical groups in North Carolina that employ more than 800 physicians. He isn’t sure how many will also sign up for the state program.

“The treasurer is taking a big step and should be congratulated for heading this up,” Owen says. “We need to understand that we’re all going to have to buckle up here locally and across the nation because change is going to be the status quo. Things can’t continue the same way.”

Folwell’s “Clear Pricing Project” changes how health care providers are reimbursed. Some providers, including hospitals, will feel financial pressure because the prices paid by the State Health Plan will be tied to those paid for federal Medicare programs. Most general-practice physicians are expected to receive increased reimbursement, while many specialists will experience decreases, Folwell says. State hospital representatives say the plan could pose serious financial peril for smaller N.C. hospitals, a view that Folwell rejects.

Earlier this year, the N.C. House of Representatives passed a bill requiring Folwell to delay rollout of his pricing plan, which is expected to start in 2020. It would require a study on how providers are paid. But the N.C. Senate hasn’t acted on the measure.

Tryon Medical Partners was formed last year by more than 80 physicians who had previously worked for Atrium Health Mecklenburg Medical Group. The physicians filed a lawsuit contending Atrium engaged in anti-competitive behavior, leading to a settlement last July. Tryon now operates eight clinics in Mecklenburg County and serves more than 100,000 patients.

“We cannot be more pleased that Tryon Medical Partners is one of the first and largest practices to join our new network,” Folwell said in a press release.

The state’s hospital industry views Folwell’s plan as a short-term solution that doesn’t address key issues underlying the rising cost of health care. The industry favors “valued-based care” efforts that prompt hospitals to take on more financial risks for patient outcomes rather than traditional fee-for-service models. That approach lacks specificity and hasn’t blunted rate increases, Folwell says.

Folwell contends his plan will save $305 million over the two-year budget cycle, a savings of about $216 a year per beneficiary.

The N.C. Healthcare Association issued this statement:

“With the recent presentation of non-negotiable contracts to healthcare providers across the state, the Treasurer has put access to care for state employees, teachers, and retirees, as well as more than 9 million other North Carolinians, at risk. NCHA and our members stand firm in our belief that the old-fashioned fee for service arrangement the Treasurer is pushing is not the best option for state health plan members. They deserve the best we can offer and we have proven that a value-based care approach, focused on improving and maintaining health, is the best path forward for the State Health Plan.”

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