NC’s shift to Aetna is going well, State Health Plan says. Tell us your experience.
After more than 40 years with Blue Cross NC serving as the administrator of the North Carolina State Health Plan, Aetna took over the role this month.
And so far, the transition has largely been smooth, according to leaders of Aetna and to the state’s new treasurer, who oversees the plan.
The transition affected members enrolled in the Base PPO Plan (70/30), the Enhanced PPO Plan (80/20) and the High Deductible Health Plan, which were previously all administered by Blue Cross NC.
Now Aetna is the third-party administer of all those plans, which entails handling the administrative tasks associated with health insurance, including issuing cards, processing claims and setting up technological systems.
Here’s a look at where things stand a bit over a week since the transition occurred.
Go-live
While many rang in the new year with celebrations, Aetna’s team was focused on the launch.
“The lights all came on, and they’re still on; things are going as expected, both from the standpoint of our member interactions and our provider interactions, and our systems are functioning as expected,” said Aetna MidSouth and Capital Markets President Jim Bostian.
“To say everything is 100% perfect would be inaccurate. However, we are in much better shape than we had thought we might be,” he said.
He added they were “remaining vigilant as we go forward” and that every day they have command-center calls looking at systems, interactions, phone lines and provider communications.
He said Aetna, over a two-year implementation period, had hundreds of employees working towards the go-live date and had spent $50 million to customize legacy systems to meet the State Health Plan’s requirements. He said Aetna currently has about 450 employees dedicated to the State Health Plan account and another 200 who largely focus on that account, though not entirely.
Brad Briner, the newly elected state treasurer, also said things were going smoothly so far. The decision to move to Aetna followed a bidding process in 2022 and was made under the mandate of former Treasurer Dale Folwell.
Briner said that he warned his assistant that with the transition taking effect, “every other phone call, at least, would be about the transition.”
But, “she has yet to get one,” he said. “It’s going better than I would have guessed.”
Minor issues, Aetna says
Issues have come up, but they have been minor, said Bostian. The main challenges involve a Universal Personal Identification Number (UPID) introduced during the transition, and pre-authorizations granted last year.
As part of the bid requirements for the contract, the State Health Plan required that the administrator switch from an insurer-specific member ID number to a “universal personal ID.”
Aetna’s systems are handling the unique member identifier (which shows up on member ID cards) properly. But the change has caused some issues when providers or members input the number incorrectly, Bostian said.
The unique identification number, he said, is longer than the former number, which some providers still have in their systems, and so “that’s a little bit different.”
It’s “just getting providers comfortable with how to manage and get that new number recorded accurately in their system so that we can communicate,” he said.
Ultimately, the unique number will help Aetna and any other vendor using that universal identifier for the State Health Plan “work more efficiently together,” he said.
As for the issue with prior authorizations, Bostian said that with nearly 600,000 members transitioning to Aetna, there were tens of thousands of procedures already scheduled in 2024 for 2025. Prior authorization requirements, which are set by Aetna as the third-party administrator, require patients to get approval from a health plan before undergoing a procedure or getting a health care service.
To streamline the transition, Aetna avoided requiring re-authorization by transferring previously approved procedures directly into their system.
However, some providers still contacted Aetna to confirm if another authorization was needed, resulting in an initial spike in calls. Despite this, Bostian said there were no instances “at all” that he was aware of of care already authorized in 2024 for 2025 being denied.
Provider network
Mike Driscoll, an Aetna vice president who helped oversee the transition, said that during open enrollment, the main concern raised by SHP members was whether their provider would remain in-network.
But “access to providers has been a non-issue with the transition,” he said.
Bostian said that while a few members may have lost their provider, an equal or greater number had gained access to in-network providers that were previously unavailable under Blue Cross NC.
Still, he said they are adding new providers daily, and thousands more each month. This growth is not solely due to securing the SHP contract but is largely driven by increased activity by providers, he said, particularly in major markets like the Triangle and Charlotte, where new practices are opening and physicians are moving.
Driscoll said one area they’ve especially grown their network is in the mental and behavioral health field, with Bostian saying that in the last month, they’ve added at least 5,000 behavioral health providers.
Transparency and cost saving
Aetna, as the administrator, is tasked with negotiating contracts with a network of providers and setting the prices paid to them for health care services.
In exchange for this and other services, Aetna receives an administrative fee and submits claims to the state, which covers health care costs. Claims paid by the state differ from the rates paid by State Health Plan members, who pay the prices fixed by the state. Premiums, out-of-pocket costs, and deductibles are determined by the State Health Plan’s board of trustees, which must approve any changes.
Pharmaceutical benefits are not managed by Aetna but by CVS/Caremark, which the state has contracted as a pharmacy benefit manager (PBM) to oversee prescription drug benefits.
Since the state pays claims, Aetna’s role in negotiating provider contracts and managing benefits is important. Former state treasurer Folwell stated that the new contract with Aetna could potentially save the State Health Plan $140 million over five years, primarily due to Aetna’s lower contracted rates with health care providers, which would reduce claims costs. He also said that Blue Cross NC did not allow the state to see how the company negotiated prices with health care providers. Aetna has agreed to share provider contracts with the State Health Plan.
Bostian said Aetna brings expertise that will help the state manage costs more efficiently, with one way being through their interactions with providers. He said that they are committed to sharing appropriate information about provider interactions and contracts with the state.
Briner, who has been in office for less than two weeks, has already made it clear that cutting costs under the State Health Plan is a priority. On Thursday, he indicated that the state would likely need to raise premiums to address a $507 million deficit under the plan.
Briner said that, aside from the potential premium increases, it will be key to design the plan efficiently, negotiate with providers, and create a competitive landscape.
Thomas Friedman, the new executive administrator of the State Health Plan, emphasized the unique ability to analyze not only contracted prices but also how services are actually used in practice, including the codes used by providers.
By analyzing the various ways claims are coded — once more data is gathered — they can determine the median prices for core services, Friedman said. This will enable them to approach providers offering similar services and say, “We need to do better than this number,” and in exchange, “steer our members toward your provider practice,” he said.
“Contracts are great, and transparency is extremely important, but it’s how you go to the next step that will be even more important,” he said.
Members of the State Health Plan: How has the transition to Aetna gone for you? We want to hear whether you’ve been able to get the health care you need since the switch to a new third-party administrator. Email lperezu@newsobserver.com to let us know.
This story was originally published January 13, 2025 at 5:00 AM with the headline "NC’s shift to Aetna is going well, State Health Plan says. Tell us your experience.."
