'No-cost" Lantern surgical benefit has modest early use from SHP members

The State Health Plan's partnership with Lantern, a Specialty Care platform has affected 406 completed surgical cases since its debut in October.

The SHP Board of Directors were presented with a presentation on Lantern at its March 17 quarterly meeting.

The majority of SHP participants are for what is being billed as "an innovative no-cost surgical benefit" through a new partnership with Dallas-based Lantern.

The "no cost" in this instance signifies the SHP will cover the surgical cost for members that they normally would be responsible for under the typical preferred provider organization (PPO), such as currently with Aetna.

Treasurer Brad Briner said the Lantern plan involves a network of surgeons and specialists it is assembling in North Carolina that includes the Triad.

The state Treasurer's Office oversees the SHP, which covers nearly 750,000 members comprised of teachers, state employees, retirees and dependents.

However, for the Lantern plan, Medicare recipients are not eligible, which reduces the number of potential participants to about 550,000.

The presentation also listed Lantern with 1,848 open cases involving SHP members as of March 4.

The most in-demand surgical procedure among the open cases is bariatrics at 488, followed by orthopedic at 433 and joint replacement at 400.

Other procedures involve cardiac, spine, general surgery, gastroenterology, spine and ortho injections, gynecology and ear, nose and throat.

The Lantern totals do not count the recent decisions by Novant Health Inc., OrthoCarolina and EmergeOrtho, the state's largest physician-owned orthopedic practice, to participate with Lantern.

EmergeOrtho participation

EmergeOrtho has 65 facilities statewide. Its Triad presence consists of 23 facilities: 11 in Greensboro, along with four each in Reidsville and Summerfield, three in Asheboro and one in Eden

Plan members have access to Lantern-designated services at EmergeOrtho locations treating conditions of the bones, muscles and joint replacement, along with sports medicine, spine care and other specialized surgical procedures.

"EmergeOrtho is a prime example of how excellent care and lower costs can go hand in hand," Briner said. "The added bonus is that this also helps the plan to protect long-term financial sustainability."

Allison Farmer, EmergeOrtho's chief executive, called the Lantern initiative "a meaningful step toward a more sustainable and patient-centered health care system for our state."

In addition to the surgical partnership, EmergeOrtho is participating in the SHP's broader Preferred Provider Program with members paying about 50% less than the standard copay.

By being a Preferred Provider, EmergeOrtho doctors are also not subject to prior authorizations, "a benefit that improves the timely delivery of care for our members."

Novant participation

Novant is the first major not-for-profit healthcare system in North Carolina to participate in Lantern with the SHP.

Plan members have access to Lantern-designated surgical services at Novant locations across the state, such as orthopedics, spine, bariatrics, general surgery, heart and vascular care and women's services.

The first phase will be focused on about 1,500 orthopedic procedures, ranging from shoulder surgery to knee replacements, that typically are scheduled rather than resulting from an emergency.

Also participating is OrthoCarolina facilities.

"Through its participation in the Lantern network, OrthoCarolina is helping expand access to high-quality, value-based orthopedic care across North Carolina, improving outcomes, lowering costs and delivering the right care at the right time," OrthoCarolina said.

How Lantern works

The enticement for healthcare providers to join the Lantern network is in large part because it provides a higher reimbursement rate than federal Medicare and Medicaid plans.

"Like a hospital in Greensboro may have an excellent reputation in hip replacement surgeries," according to the treasurer's office.

"We want people to go there because they will have better outcomes. What that hospital will do is say 'we'll give you a discount on those surgeries because you will direct patients here and we will always have a full surgical schedule.' "

Plan members are incentivized to use the Lantern network "to ensure better outcomes and bigger savings."

In return, SHP provides leverage to the Lantern initiative.

"That means we are getting a much better price for it, and we are giving that better price to our members in the form of no cost," according to the treasurer's office. "The SHP would also likely be spending less per surgery by getting the bulk price from the provider."

Lantern also pairs members with a dedicated care team, including care advocates and nurse navigators, "for the entirety of their care journey."

"I've seen firsthand how access to high-quality, affordable surgical care makes all the difference in someone's recovery," said Dr. Steve Lucey, a Greensboro-based orthopedic surgeon and member of Lantern's medical advisory board.

SHP members will be getting more information about the partnership leading up to the launch.

Three-tier network option

The SHP board approved March 17 a three-tier network structure to choose from when enrolling for 2027.

The final premium, co-pay, ambulatory, inpatient, outpatient and surgical deductible amounts associated with the tiers will be voted on at the June 5 board meeting.

Since Briner took office in January 2025, he had focused primarily on reducing expenses as part of an effort to provide more financial stability to SHP.

Briner said the three-tier network structure is meant to encourage members to choose high-value providers with the SHP "banking on people thinking with their wallets."

The SHP presentation listed that there would be no change in the $10 co-pay for a preferred provider, and a $30 to $50 co-pay range for other providers.

"The Plan is working to make getting care easier no matter where members live in a fiscally sustainable manner," according to the March 17 presentation.

"By reducing geographic and logistical barriers, the Plan will help members access primary care, specialists and mental health services in ways that are convenient, timely and close to home.

"We must strive to break down barriers and improve care options for rural and urban members. Access isn't limited to distance driven to care; it is also measured by affordability and times to appointments."

The three tiers

The Preferred Provider Program is asking participating providers to "trade increased volume and reduced cost-sharing for discounts and/or a share of savings."

The 2027 goal is to expand access to preferred providers beyond the Triad, Charlotte metro and Triangle to smaller metros centered around Asheville, Fayetteville, Greenville and Wilmington.

About 70% of care for SHP participants takes place at facilities in 10 counties with Forsyth and Guilford counties ranking fifth and seven, respectively. Catawba County was ranked ninth.

By emphasizing those four smaller metros, the SHP is hopeful of increasing essential access points to surrounding rural communities.

The second tier is branded as access providers, which will be focused on rural communities and more on primary care coverage than specialty providers and services.

"Median cost provider options is the target," according to the SHP.

The third tier is branded Non-Preferred Providers, which are considered by the SHP as "higher-cost providers who have not participated in the preferred provider program."

The SHP said preferred providers will generate more revenue from an increase in patients, while access providers are projected to have similar revenue to current totals and higher-cost providers would have lower revenue as patients move to the other tiers.

The SHP cautioned that members who don't shift to preferred providers from higher-cost providers will continue to pay higher co-pays, premium and deductible costs.

If enough SHP members don't switch, the plan warned that it could "disincentivizes future provider discounts."

When the SHP increased health insurance premiums for 2026, it was for the standard and plus PPO plans, with those with higher annual base salaries paying more.

For 2027, the SHP proposal would link premium increases to wage growth, such as a 1% raise would mean a $1 monthly insurance premium increase.