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Blue Cross pushed to cut state medical costs

May 14th, 2018

— The State Health Plan has ordered Blue Cross Blue Shield of North Carolina to cut the rates paid to medical providers by at least 15 percent to save taxpayers and state workers millions of dollars.

Blue Cross provides the provider network and processes claims for the more than 720,000 teachers, state employees and retirees on the State Health Plan. The insurer also negotiates rates with providers, and State Treasurer Dale Folwell said a 15 percent cut could save about $300 million a year.

“We’re going to be asking a little from a lot of people and a lot from a few,” Folwell said in a statement. “Many believe that medical providers can achieve at least 10 percent in savings. I believe it’s more. I’m asking medical providers in the state to help us sustain this plan for the future. We’re in a medical arms race that is driving up costs, and we need partners to work with us to reduce costs for all.”

The savings would be used to lower premiums and address the state’s $34 billion long-term health care liabilities for retirees, he said.

“I believe we can make a generational difference by allowing those who teach our children, protect us from crime and pave our roads to have more affordable health care for their families,” he said. “At the same time, we can pay down our long-term health care liabilities so that we can keep the promises made to hard-working public employees.”

Blue Cross spokesman Austin Vevurka said health care spending is projected to account for nearly 20 percent of the U.S. economy by 2026.

“We share Treasurer Folwell’s concern about the cost issue and hope that health care providers will partner with us to make health care affordable for all consumers, not just the State Health Plan,” Vevurka said in an email. “As we do so, we should not increase costs on others to offset any potential savings within the State Health Plan.”

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