North Carolina's State Plan Lists a Direct Primary Care Model for 2027

North Carolina’s State Health Plan told its Board of Trustees on Oct. 27 that it could run out of cash by the end of 2026 if current trends hold. Earlier in the same meeting deck, under a slide titled “2027 Preferred Provider Priorities,” it listed three “key ongoing discussions to bring to the Board in 2027.” Two are specialty networks, for dermatology and rheumatology. The third reads, in full, “Capitated/Direct Primary Care Model.”

That’s the whole entry. One line, one slash, no price and no date. It still puts a direct primary care model on the agenda of a plan that covers 750,000 members: teachers, state workers, retirees and their families.

What the Plan actually said

The slide lives in the Oct. 27 Board presentation, a 149-page deck that also covers the cash position and a population health study. The same slide sets the year’s “TOP PRIORITY” as aligning incentives around access, quality and cost, and says the Plan will “focus on existing access (independent providers) tier.”

Executive Administrator Tom Friedman said more out loud than the slide does. EdNC reported his remarks at the meeting:

“We need to do a better job of funding primary care and make it more attractive, specifically in rural communities where there is not strong incentive to practice,” Friedman said. EdNC reported that he added the Plan is working with partners to develop a capitated/direct primary care model, as opposed to fee-for-service, to help ensure guaranteed revenues.

So the stated goal is predictable primary care revenue, aimed at rural counties. Nothing in the deck says who the partners are, what a practice would be paid or when the Board would vote.

When DPC Insider covered the Plan’s preferred provider program in July, the only way into the lowest-copay tier ran through three clinically integrated networks, and the Plan said later phases were “expected to be considered.” The new slide names direct primary care as part of what comes next.

Why a plan short on cash is talking about primary care

The money problem is severe. The deck says losses “accelerated during the July to September quarter of 2026,” and the Board voted to raise the Retiree Health Benefit Fund’s contribution to the Plan from $300 to $600 per retiree per month for July through December 2026. Staff estimated that would bring in about $415 million before year end.

The Plan’s consultant, Segal, brought numbers that point at primary care access. In the same deck:

• Rural members have historically made about 26% more ER visits per 1,000 than urban members, and the gap reached 27% in 2025. Segal says the main reason “appears to be lack of access to urgent care centers,” where rural use runs about 17% lower.
• Members who don’t select a primary care provider have historically used the ER about 40 to 50% more than members who do.
• About 91% of members select a PCP, so the gap sits in a small slice of the membership.

A plan reading those figures, while short on cash, has a reason to want primary care doctors in rural counties. In Friedman’s own words, those communities have “not strong incentive to practice.”

Capitated and direct are two different contracts

The slash matters more than anything else on the slide. In the usual sense of the word, capitation means the Plan pays a practice a set amount per member for a set period. Direct primary care, as federal tax law defines it, is care paid for by a fixed periodic fee that is the sole compensation for that care. A state plan can fund either one. They’re different deals for the doctor.

The deck doesn’t say which one the Plan means, or whether a practice outside the three networks could take part. Elsewhere it notes that practices “can join the existing CIN partners and Lantern at anytime assuming they can come to contract terms (decision not owned by Plan).” That sentence describes today’s door. A capitated or direct model could open a second one, or route through the same networks. The slide doesn’t decide it.

North Carolina also has a cautionary neighbor in the record. Nebraska required its state employee program to offer DPC plans, and enrollment never cleared 2 percent before the option was removed. Design decides whether members ever see a model like this.

What To Watch

The Board’s proposed 2027 calendar has a 2028 benefits discussion on Jan. 27 and a 2028 benefits vote on March 16. The deck says the Plan wants “a more measured approach to benefit changes in 2028,” partly because of the move to Blue Cross and Blue Shield of North Carolina as administrator. The 2028 changes it named include a consumer-directed plan with an HRA, a potential narrow network to lower costs and a change to non-preferred inpatient behavioral health care.

The primary care model isn’t on that calendar by name. The first real signal will be the first Board deck that gives it a page of its own: who the partners are, whether it pays per member or funds a membership, and whether a practice that files no claims can join. If you run a DPC practice in rural North Carolina, the Plan’s Board materials page is the one to watch.