Learn from North Carolina’s model before other states follow suit

North Carolina’s State Health Plan announced a bundle program with no patient copay rolling out this October. It’s being spun as a bold step toward affordability and access. But, it is a rushed, top-down overhaul that dumps massive administrative burden on providers — with no planning time.

Lantern is the designated network partner. Through their “Network of Excellence,” eligible surgeries (like joint replacements) will be steered to hand-picked facilities that meet pricing and efficiency criteria. The reward? Steered patients with a lower or no copay. The price? Deep discounts, new burdensome workflows, and a three-month timeline to stand it all up.

Other states will be watching closely, and some will be tempted to follow suit. They should think twice. Here’s why.

What non-NC providers need to be wary of if your state presents a similar employee plan

1. Heavy-handed provider steering

Sure, providers who participate may have steered patients and get paid faster. Let’s not pretend this is “partnership.” There is also a forced participation in all of Lantern’s other employer networks. Congratulations – you get to see the same patients for less money and not all your employed docs will get to participate. And by the way, if you don’t submit for at least one bundle in this tranche, you are carved out going forward.

2. Dramatically shortened implementation timelines

Bids due inside of a month, a Q&A that’s 39 pages long, and loads of open-ended responses. If you participate, you need to build operational workflows, onboard with a third-party network, and retrain staff. The timeline is so compressed, you’d think the goal was chaos, not care coordination. Who wins in this situation? Not the citizens or taxpayers. Meanwhile, there’s also a Medicaid cut!

3. The prior authorization shell game — fewer forms, more friction

The State Health Plan brags there’s “no prior authorization” for surgeries in the Lantern program. Sounds generous — until a patient doesn’t need surgery. That’s when they bounce back into Aetna’s system, where prior auth rules still apply. Picture the confusion: delayed care, system handoffs, zero continuity.

For patients who do get surgery, there’s a new kind of admin burden for providers: at least three care coordination calls per case. Lantern handles navigation and matching, but providers are left fielding calls, adjusting workflows, and dealing with cherry-picked physician participation. So no, it’s not streamlined. It’s just shifting the friction — with a heavier lift on the provider side.

4. Undermining existing provider relationships and infrastructure

Lantern’s “Network of Excellence” operates completely outside the existing Aetna PPO structure. Providers now juggle two disconnected systems. No integration. No backup plan. If you’re not in the Lantern network, you lose volume. If you are, get ready for a whole new referral maze, unfamiliar billing workflows, and disruption by design.

5. All-in or all-out provider participation

Providers can’t just opt in to serve North Carolina’s state employees. Once you’re in Lantern’s network, you’re in for all their clients. Everywhere. That’s not flexibility — it’s an ultimatum. Health systems lose the ability to tailor participation or test the model. It’s full commitment with no safety net.

6. Zero-cost benefit — it’s not quite that simple

Let’s be clear: the “no-cost surgical benefit” isn’t a Lantern feature. It’s part of the plan design. Lantern can’t guarantee it, and they don’t control it. And what if the member has to travel to take advantage of the benefit? Members might be eligible for travel reimbursements if they have to drive hours for surgery. Might. If the benefit plan includes a travel benefit. If the member qualifies for it. That’s not a promise. That’s wishful thinking wrapped in benefit speak. For rural members or those with mobility challenges, “no cost” quickly becomes a logistical nightmare. Watch this turn into grievance fodder by Q1.

7. Site-neutral payment — and no one’s calling it that

Hospital outpatient departments can technically participate in the network. But there’s a catch: they are encouraged to submit rates equivalent to ambulatory surgery centers. Read that for what it is — a site-neutral payment requirement. And it’s not coming from CMS. It’s coming from a private network administrator under a state contract. If that becomes a precedent, brace yourself for the commercial follow-on effects.

The context no one wants to ignore

Let’s not forget why all this exists.

North Carolina was famously locked in a public feud with Blue Cross Blue Shield NC — after more than 40 years administering the State Health Plan — over pricing transparency and access to cost data. The state pushed hard for what was called the “Clear Pricing Plan,” aiming to move payments to a Medicare-based model rather than opaque negotiations. That led to the Plan switching to Aetna, amidst a legal battle and headline-making showdown, and a clear signal to the market: the State Health Plan will negotiate directly with providers, with drugmakers, and without excuses.

Plans are under pressure. If this Lantern-driven model appears to move the dial on costs, real or perceived, other states and large employers looking to escape the limits of failing benefit and network strategies may try to replicate it.

And if that happens, you as providers better know what’s coming.