North Carolina's State Health Plan is suing Atrium Health to block a new copay program the state calls an "unlawful pricing scheme" that could cost taxpayers more than $100 million. State Treasurer Brad Briner, who chairs the plan's board, requested a temporary restraining order on October 9 in Wake County Superior Court, arguing Atrium is rewriting the plan's cost-sharing rules without any legal authority.
What Atrium's Affordability Protection Program Does
Announced October 6, Atrium's "Affordability Protection Program" gives enrolled State Health Plan members the lowest copays and cost-sharing at any Atrium facility, automatically and with no separate enrollment, starting January 1, 2027. The numbers are striking: a Standard Plan member's outpatient surgery copay at a nonpreferred facility would drop from $1,000 plus deductible — up to $5,000 plus 30% coinsurance — to a flat $400. An inpatient stay at an Atrium urban hospital would drop from $1,500 plus deductible and coinsurance to $500.
Atrium says the program is designed to absorb higher out-of-pocket costs for nearly 100,000 plan members who use its providers, and notes it submitted multiple proposals since July to give the plan the same discounts as preferred-tier providers — each rejected.
Why the State Health Plan Calls It an Unlawful Pricing Scheme
The plan's legal argument is blunt: state law assigns the Treasurer — and the Treasurer alone — the duty to set the plan's copays, deductibles, and coinsurance. Atrium, Briner says, "has never been given this authority." He also believes the program violates the federal Stark law on physician self-referral, and the plan's October 6 statement called the program a "shell game" that "appears to circumvent the terms of the parties' agreement."
The financial case is just as sharp. Briner says Atrium would not lower what it actually charges the plan — and calls Atrium the state's highest-cost major health system for 2027 — so members keeping their Atrium doctors could cost the plan more than $100 million next year, forcing higher premiums for everyone and requests for more taxpayer funding. "Will bankrupt the State Health Plan," Briner warned, calling it a potential "multi-hundred million dollar problem."
The backdrop is a plan in deep trouble: the State Health Plan covers about 750,000 teachers, state employees, retirees, and dependents, and faces a deficit of roughly $1.5 billion. For 2027 it built a tiered network — preferred providers UNC Health, Novant Health, and Iredell Health, with Duke Health as an Access partner — designed to save hundreds of millions. Atrium, after a yearlong competitive process, was not selected as a preferred provider; 12 Atrium hospitals, including the Levine, Jeff Gordon, and Brenner children's hospitals, sit at the Access level.
What Happens Next: The Lawsuit and Open Enrollment
The plan's suit seeks an injunction blocking Atrium from advertising the program and a court judgment declaring it void under state law. Atrium's response, for now: "Our focus has always been, and remains, serving patients and making care more affordable for North Carolina's public servants and their families. We are reviewing the legal filing."
The confusion around Atrium's announcement has already had a practical effect: the plan extended open enrollment through November 6, 2026 (originally set to begin October 12). The fight is far from over — Briner has also opposed Atrium's plan to take over WakeMed — and whichever way the court rules, it will reshape health costs for three-quarters of a million North Carolinians.
The takeaway: members like the lower copays; the state says the math doesn't work and the law doesn't allow it. A Wake County judge will now decide whether Atrium can set prices for a plan it doesn't run.
Watch: Treasurer Brad Briner's official statement on Atrium's copay program from the NC Treasurer's office.
Music in this post's reel: Kevin MacLeod - Long Road Ahead (incompetech.com), licensed under CC BY 3.0
Sources: NC Treasurer's October 9 press release; Becker's Hospital Review on the dispute; NC Health News on Atrium's program; Business North Carolina on the lawsuit.