What Atrium's Out-of-Network Shift Means for State Health Plan Members
Atrium promised State Health Plan members copays below the Plan's cheapest tier. Now that most Atrium care is out of network, the Plan pays almost nothing on most bills, and that promise is all that stands between members and its steepest schedule.
Julie Fortner worked for Cleveland County Schools for nearly 30 years and has used Atrium Health services. Mid-enrollment, she told WSOC what many members feel.
"It is confusing. We don’t understand all the lingo, all the insurance lingo and all the political stuff behind the scenes."
Julie Fortner, retired Cleveland County Schools employee, to WSOC
The lingo now carries a price. From Jan. 1, 2027, most Atrium care sits in the Out-of-Network column of the Plan's benefit chart, printed at the far right of each plan, with the biggest deductible the Plan has.
On Wednesday, Oct. 14, N.C. Treasurer Brad Briner, who chairs the State Health Plan's Board of Trustees, announced that beginning Jan. 1, 2027, most Atrium Health providers move to the Plan's Out-of-Network tier, except the "Access" facilities agreed on Sept. 14: 12 Atrium hospitals and associated clinics, including rural hospitals and three children's hospitals. The Plan says members who choose Atrium are "held harmless under this action, assuming Atrium follows through with its program," Atrium's pledge to cut their costs below the Plan's cheapest tier.
Briner calls it "behind the scenes bookkeeping." Set against the Plan's own numbers, it looks more like a dare. Atrium promised the Plan would pay the same and Atrium would pay the difference. Out of network, the Plan pays almost nothing on most bills, so the difference becomes nearly the whole bill. Atrium had not publicly responded to the move as of Thursday morning, Oct. 15.
Who stays in network
The Treasurer's announcement spares only "the previously agreed to 'access' level facilities." Those are Atrium's rural hospitals in Alleghany, Anson, Cleveland (Shelby and Kings Mountain), Columbus, Lincoln, Scotland, Stanly and Wilkes counties, including Hugh Chatham Health, where benefits stay "almost identical" to this year's, plus Levine Children's Hospital in Charlotte, Jeff Gordon Children's Hospital in Concord and Brenner Children's Hospital in the Triad. WSOC's map colored them yellow and the hospitals now out of network red.
Emergencies follow their own rule. Members should go to the nearest ER, and all ER copays are charged at the Access level whatever the hospital's tier, "including your hospital stay if admitted." Primary care provider copays "remain the same," the release says.
The gap is in what the Plan hasn't said. In September it promised that patients in cancer, cystic fibrosis or "unique heart and transplant care" would keep access to Atrium, that pregnant members would not have to change delivery plans for 2027, and that members with an Atrium primary care provider could stay "at no change in cost or benefit." The Oct. 14 release does not say whether those promises carry over now that most of Atrium is out of network.
The column on the Plan's chart nobody printed
Start with Atrium's offer. Its "Affordability Protection Program," announced Tuesday, Oct. 6, sets copays below the Plan's Preferred tier (UNC Health, Novant Health and Iredell Health). On the Standard PPO that means $10 for primary care instead of $15, and $500 for an inpatient stay instead of $750: about a third cheaper.
"The most important message we want State Health Plan members to hear is simple: we've got your back."
Steve Smoot, president of Advocate Health's North Carolina and Georgia Division, Atrium's parent, Oct. 6
Atrium's page for State Health Plan members says it is "covering your deductibles, coinsurance and any cost difference," with no need to enroll or opt in; it absorbs the cost by accepting less from patients after the Plan processes each claim. It covers active members, dependents and retirees under 65, but no one with Medicare, Medicaid or TRICARE. It "only applies to care provided by Atrium Health," not to doctors at Atrium sites whom Atrium doesn't employ. And it is "not affiliated with, authorized by, or endorsed by" the Treasurer, the Plan or the state.
Coverage called Out-of-Network the most expensive tier without numbers. The Plan's 2027 benefit chart does.
| 2027 cost for one person | Preferred tier | Non-Preferred tier | Out-of-Network tier | Atrium's promised cost |
|---|---|---|---|---|
| Standard PPO deductible | $1,500 | $5,000 | $15,000 | Waived |
| Standard PPO out-of-pocket max | $4,000 | $12,000 | $36,000 | — |
| Standard specialist visit | $40 | 30% after deductible | 50% after deductible | $30 |
| Standard inpatient stay (facility) | $750 | $1,500, then 30% after deductible | 50% after deductible | $500 |
| Plus PPO deductible | $1,000 | $4,000 | $12,000 | Waived |
| Plus PPO out-of-pocket max | $3,000 | $10,000 | $30,000 | — |
| Plus specialist visit | $25 | 20% after deductible | 40% after deductible | $15 |
| Plus inpatient stay (facility) | $500 | $1,000, then 20% after deductible | 40% after deductible | $350 |
Sources: State Health Plan 2027 Plan Comparison; Atrium Health. Balance bills sit outside the out-of-pocket max.
On both plans the Out-of-Network deductible and cap are exactly three times the Non-Preferred figures. A deductible is what you pay before the plan pays anything; coinsurance is the share you keep paying after that.
For one person in a year of out-of-network care, on Standard, the Plan pays $0 until allowed charges pass $15,000; on Plus, $12,000. After that the member pays 50% or 40%, reaching the cap only when allowed charges hit $57,000 on either plan.
Two more lines in the Plan's Summary of Benefits make it worse. "Balance-billed charges," when a provider bills you for the gap between its price and what the plan allows, don't count toward the out-of-pocket limit. And out-of-network preventive care is "Not covered, except for mandated coverage."
If the program holds, members pay less than at any tier the Plan offers. If Atrium withdraws or narrows it, or a bill falls outside it, they land on the steepest schedule the Plan has. No contract with the Plan obliges Atrium to choose the first.
The Plan's math, Atrium's math and a judge in Sanford
Briner's case rests on an illustration he gave WUNC: a $100 service at a Preferred provider costs the Plan $80 and the member $20. Atrium averages about $125 for it; under the program, he said, the Plan pays $100, the member $15 and Atrium absorbs $10. That is 25% more from the Plan for the same care. On Oct. 6, Briner had told reporters that under the program "our total cost goes up by 30 to 40%."
The Plan puts the program's cost at up to $250 million in 2027, while its lawsuit says the whole tiered network will save "over $135 million" that year. By the Plan's own estimates, Atrium's program would eat about 1.85 times what the new network saves.
"We needed to find a way to respect Atrium's desire to pay our health plan members' costs and still hold the State Health Plan harmless, and moving them to the out-of-network tier does exactly that. Our members bear no more costs than the Atrium Affordability Plan, and the State Health Plan doesn't bear that incremental $250 million cost that Atrium was trying to impose on us."
Brad Briner, N.C. State Treasurer, to WUNC, Oct. 14
The Plan had sued on Friday, Oct. 9, arguing the program usurps the Treasurer's power to set copays and deductibles. On Tuesday, Oct. 13, after a hearing in Sanford, Business Court Judge Matthew Houston refused to block it.
"Ultimately, at this early stage of the case, Plaintiffs have not demonstrated both a reasonable likelihood of success on the merits of their causes of action and a likelihood of irreparable harm resulting from Defendant's conduct."
Judge Matthew Houston, written opinion, Oct. 13, via WUNC
Houston also wrote, WUNC reported, that the Plan's financial trouble predated the program. Atrium read the ruling as a finding that the Plan "is unlikely to succeed on the merits." The Plan said the judge, ruling from the bench, acknowledged its argument that the program could cause it irreparable harm, and that "other legal pathways continue to be explored." The case is not over.
Atrium's strongest point is that the Plan's money problems are its own: it says the Plan leaned on reserves, leaving a "reported $507 million deficit," and "just received an additional $100 million" from lawmakers for 2026. Its offer to match Preferred discounts, Atrium says, "still stands"; the Plan says those discounts "were never equal" to other systems'.
Choosing before Nov. 6
Even non-Atrium patients have a stake: the Plan warned on Oct. 13 that it may need to raise all premiums "by as much as $50 per month in 2028, which could more than double their 2027 premiums." Ardis Watkins of the State Employees Association of North Carolina sides with the Plan, noting to WUNC that lawmakers have put about $4 billion into it over two years.
"The employee could save money on the day they go get that service, but the employee will lose shortly thereafter when their premiums go up, when the General Assembly has no money for raises, that kind of thing."
Ardis Watkins, executive director, State Employees Association of North Carolina, to WUNC
For the Plan's roughly 750,000 members, and the more than 80,000 who use Atrium by Atrium's count, there are 22 days until open enrollment closes on Friday, Nov. 6. Like other enrollment deadlines driven by a network change, this one offers narrow choices. Everyone lands in the Standard PPO automatically; moving to the Plus PPO, with lower deductibles in every tier, takes action before Nov. 6. Switching a primary care provider to a Preferred one has to wait until after Jan. 1.
Retirees on the 70/30 Plan face the tiers, but Atrium's program excludes anyone with Medicare; Humana Medicare Advantage and the High Deductible Health Plan are outside the tiers entirely. Members in cancer, transplant or pregnancy care were told in September to expect a letter from the Plan, so watch for it. In an emergency, the federal surprise-billing protections CMS describes for ER visits sit alongside the Plan's Access-level ER rule.
Atrium warns members that "NC State Health Plan materials do not reflect" its program. Its own page still sums up the bargain in one line.
"Simply stated: NC State Health Plan members pay less, the Plan pays the same and Atrium Health pays the difference."
Atrium Health, State Health Plan member FAQ
From Jan. 1 the Plan pays nothing on a Standard PPO member's out-of-network Atrium care until that year's allowed charges pass $15,000 ($12,000 on Plus), so the difference is almost the whole bill. Whether Atrium still means that sentence is the one answer members need before Nov. 6, and neither side has given it.
