Health Insurance under the NC Teachers' and State Employees' Comprehensive Major Medical Plan:

Frequently Asked Questions

Question: What is a deductible?
The deductible is the amount of allowable charges that members must pay each Plan year before benefits are payable. Once the Plan year deductible is met, the Plan pays 80% of allowable charges while the member pays 20%: The deductible is $350 per Plan year, July 1 through June 30.

Question: What is an "allowable charge"?
An allowable charge is the maximum amount the Plan permits for covered services. It is based upon "Usual, Customary, and Reasonable" rates as determined by the Claims Processing Contractor, a company that the State pays to process claims and provide related administrative services. The "usual" amount is based upon the average fee that a doctor charges his or her own patients. "Customary" refers to the average fee those doctors of similar specialties, years of practice and expertise charge patients. "Reasonable" is based upon a review of medical records. The Plan takes the lower of the usual or customary amounts when determining an allowable charge.Currently, Blue Cross Blue Shield of North Carolina is the Plan's Claims Processing Contractor.

Question: What is a co-payment?
A co-payment is the specified portion of a charge for which the member is responsible, such as a prescription drug, office visit, or professional services co-payment. For the Plan year July 1-June 30, 2005, the office visit and professional services co-payment is $15.00. The co-payment is made even after a deductible has been met and does not apply toward the deductible. Prescription drug co-pays are set as follows: $10.00 for generic drugs; $25.00 for brand-name drugs where no generic is available; $40.00 for brand-name drugs for which a generic is available; and $50.00 for a drug not on the preferred drug list. All generic drugs are on the preferred list. The maximum total drug co-payment per Plan year is $2,500 per person.

Question: What is coinsurance?
Coinsurance is the amount the member must share in contributing towards the cost of covered medical expenses. Coinsurance is limited to $2,000 each Plan year; up to $6,000 for Employee/Child(ren) or Employee/Family contracts. (This is in addition to any co-payments, deductibles, and services not covered by the Plan.

Question: How does my deductible work?
Your deductible is $350 per Plan year, which runs from July 1 through June 30. Until your deductible is met, you are responsible for the entire amount of the allowable charges. After your deductible has been met, you pay 20% of the eligible expenses, up to the maximum out-of-pocket amount of$2,000 ($4,500 per Employee/Child(ren) or Employee/Family contract).

For example:

BEFORE DEDUCTIBLE HAS BEEN MET

Office Visit	$52.00
Allowable Charge under CostWise	$36.50
Professional Services CoPay	$15.00
Applied to Deductible ($36.50-$15.00)	$21.50
You Pay ($21.50+$15.00)	$36.50

AFTER DEDUCTIBLE HAS BEEN MET

Office Visit	$52.00
Allowable Charge under CostWise	$36.50
Professional Services CoPay	$15.00
Applied to Deductible ($36.50-$15.00)	$21.50
Coinsurance (20% of $21.50)	$4.30
You Pay ($4.30+$15.00)	$19.30

There is no $15.00 Professional Services co-payment for X-Rays, lab, radiation therapy, or allergy injections.
Only one Professional Services Co-payment is charged per person, per provider, per day.

Question: Why has the State hired a Pharmacy Benefit Manager?
The Pharmacy Benefit Manager was hired in an effort to reduce drug costs to the Plan. The Pharmacy Benefit Manager, currently MedCo, can, through rebates from drug manufacturers, network negotiation, preferred drug lists, and other means, reduce the price per drug to the Plan.

Question: What is a preferred drug list and who decides which drugs are on this list?
Members of the Plan's Pharmacy and Therapeutics Committee, a group of North Carolina physicians and pharmacists in active practice, compile the Preferred Drug List with the assistance of the Pharmacy Benefit Manager through careful review of each drug's efficacy, safety and cost-effectiveness. The objective in having a Preferred Drug List is to have a limited list of medications, which cover the vast majority of patient needs, are of high quality in treating the conditions for which they are prescribed, and which together provide the most cost-effective pharmacy program for the plan. Thus, not every medicine in every drug category can be included.

All generic drugs are preferred and have a co-payment of $10. A preferred brand drug with no generic is $25 and a preferred brand with a generic equivalent is $40. All drugs that are not on the preferred drug list have a co-payment of $50.

Question: How can I obtain a copy of the preferred drug list?
The drug list is posted on the Plan's website: http://statehealthplan.state.nc.us You also may obtain information about your particular prescription by calling MedCo toll free at: 1-800-336-5933

Question: I just received an Explanation of Benefits from a recent hospital stay and it looks like the Plan overpaid the hospital bill. Why?
The Plan pays hospital inpatient charges based upon Diagnosis Related Groups (DRG). The Plan takes into account many factors under the DRG payment method, including the patient's age, sex, hospital length of stay, seriousness of the diagnosis, and all procedures performed. Some patients are at higher risk and require more services than others. The amount paid to the hospital is based upon the average claims experience for all procedures, rather than upon billed charges. This sometimes does result in higher payment than the amount charged by the hospital.

The member is responsible for the $350 Plan year deductible (if not already satisfied), 20 percent coinsurance not to exceed $2,000 per fiscal year (if not already satisfied), $150 inpatient deductible and charges for services not covered by the Plan. The 20% coinsurance amount for which the member is responsible is based upon the lesser of the hospital charge or the DRG allowance. Note also that the amount applied to the $5 million lifetime maximum will always be the lower amount based on the hospital charge or the DRG allowance.

Question: What is the policy for paying out-of-state hospitals?
Rather than paying benefits based on hospital charges (which vary widely), the Plan makes payment based on the diagnosis and procedures related to the hospitalization(diagnosis related groups or DRG). All North Carolina hospitals contract with the Plan and agree to accept the DRG payment. The Plan contracts with some hospitals near the North Carolina border in Virginia and South Carolina. However, non-contracting hospitals may hold you responsible for the difference in cost if the hospital charge is higher than the DRG allowance. You may also be responsible for an additional 20% coinsurance up to a maximum of $5,000 (not to exceed $15,000 per fiscal year per Employee/Child(ren) or Employee/Family contract) if services are received at a non-contracting hospital. Contact Customer Services (1-800-422-4658) for information on contracting hospitals.

Question: What if I don't agree with the Plan's payment amount?
Most problems or concerns can be resolved through Customer Services. However, if you do not agree with a decision made by the Plan, you may submit a formal appeal to the Claims Processing Contractor. Appeals must be submitted within 60 days of receiving a denial or a benefits decision. Under the Patient Protection Act, recently enacted by the North Carolina General Assembly, effective July 1,2002, you may also request an External Review of your case, once you have exhausted the Plan's internal review process. For more information about the appeals process, call Customer Services toll free at 1-800-422-4658 or review your Benefits Summary booklet. For information regarding External Review, contact the NC Department of Insurance, 1-800-546-5664.

Question: Does the Plan pay for physicals or mammograms?
The Plan pays for 100% of allowable charges for "wellness and preventive care", such as routine physicals, pap smears, breast, colon, rectal and prostate exams, blood pressure checks, mammograms, routine blood and urine tests, and other general health checkups for maintenance of an individual's health. The maximum amount payable at 100% of allowable charges per Plan year is $150. Each wellness and preventive care procedure is limited to one per year between the ages of 2 and 7; one procedure every three years between the ages of 7 and 39; one procedure every two years between 40 and 49; one procedure every year at age 50 and older.

Wellness charges ($150.00) are not subject to the Plan year deductible or coinsurance.Any charges in excess of$150 are subject to the deductible and coinsurance. Pap smears are allowed each year for female members of any age and are part of the $150 wellness maximum.

Question: Is there anyone in my office who can help me with health benefit questions?
Each employing unit (school district, state agency, etc.) has a designated employee or Health Benefit Representative (HBR), who is responsible for administering the Plan for its employees. The HBR, among other duties, enrolls new employees, reports changes, explains benefits, reconciles group statements and remits group fees. The HBR serves as a liaison between the Plan and members.

The State Retirement System serves as the HBR for retired members.

Question: Why don't I have a choice of plans? I prefer an HMO.
While the Plan would like to offer HMO choices to its members, no HMOs chose to bid on providing services to teachers, state employees and retirees. The Executive Administrator and members of the General Assembly are reviewing options to offer alternatives to members.

Question: I am a State Employee and cover my spouse, but no children, under the Plan. Why is there no Employee/Spouse coverage?
The Plan recently reviewed the possibility of creating an additional tier for employee and spouse. The outcome of this research was that the claims experience for the employee and spouse was substantially higher than the family rate. It appears that the employee and spouse have an average age approximately nine years greater than the average age of the adults in a family unit with children in the household. Hence, if the Plan created a fourth tier of "employee and spouse", the rate would be higher than the family rate!

Question: Does the Plan cover long-term care?
The Plan covers home health agency services when medically necessary; private duty nursing under certain conditions; and skilled nursing facility benefits to patients in need of acute medical care. Even though a patient may have a chronic condition requiring care, his or her needs may be adequately met at a lower level of care, such as in an intermediate, custodial, or domiciliary facility, which is not covered by the Plan.The following services are not covered under the Plan:

intermediate, custodial or domiciliary care
care when, in the opinion of the Plan, the patient's medical condition is stable or does not require skilled medical services on a continuous daily basis
care when the patient's rehabilitation has been met in the opinion of the Plan
personal items, such as hair care, television, etc.

Note: The information contained in these Frequently Asked Questions does not include all the benefits or everything you need to know about the State Health Plan. Please check your Benefits Summary booklet for further details. We encourage you to call if you have questions about any of your health plan benefits. A list of contact information is included below.

Claims Inquiries
For questions relating to your State Health Plan benefits, to make claims inquiries, or to request a new ID card or change your address, call BCBSNC Customer Service toll free at: 1-800-422-4658. Out of the USA, call BCBSNC Customer Service at (919)489-8389

Hospital Preadmission Certification
To obtain preadmission certification and length-of-stay approval for hospital admission, call BCBSNC toll free: 1-800-672-7897.

Prior Approval.
To obtain prior approval for certain services or surgeries, call the Plan's Claims Processing Contractor toll free: 1-800-422-1582

Pharmacy Benefits
For information on prescription drugs, call MedCo toll free:1- 800-336-5933.

Mental Health and Chemical Dependency
For precertification for mental health and chemical dependency, call Value Options: 1-800-367-6143.

Care Coordination Program
If you are enrolled in the Care Coordination Program and need information, call National Health Services toll free: 1-877-298-7989.

End Stage Renal Disease Case Management
If you are enrolled in the End Stage Renal Disease case management program and need assistance, contact Renaissance toll free at: 1-866-577-3625.

Patient Protection Act
For information on requesting an External Review, contact the North Carolina Department of Insurance, 1-800-546-5664. An External Review may be requested after all internal grievance procedures have been exhausted.

Retirement System
Retired Teachers and State Employees may call the Retirement System Division within the NC Department of State Treasurer: 919-733-4191.

General Information/Other
For all other questions, call the State Health Plan office at: 877-733-4191.