By Richard Carver
The intensity of the legislative debate over reform of the state’s $14 billion Medicaid program grew more heated with the introduction of several bills that conflict with their missions.
The program covers about 1.9 million North Carolinians.
House Bill 372 and Senate Bill 574 serve as placeholders for legislators, including Rep. Donny Lambeth, R-Forsyth, trying to find common ground over differences. Compromise discussions have been taking place formally for at least four months.
Two more bills — Senate bills 696 and 703 — revive dramatic measures, one of which failed to get out of a joint legislative oversight commission in February.
And Senate Bill 701 would forbid the state from providing financing to primary care case management programs, such as Community Care of N.C. The agency is a homegrown, nonprofit series of Medicaid managed-care networks that has significant statewide support among doctors and health care providers, as well as several federal and state lawmakers.
Then there’s the Senate version (Bill 702), which attempts to limit the reach of the state’s certificate-of-need regulations. House Bill 200, with bipartisan support, takes a similar approach.
Medicaid reform has arguably become the biggest sticking point among state Republican leaders and Gov. Pat McCrory, who has declared from day one of his term that the program is broken.
Senate leaders tout privatization, including hiring out-of-state, for-profit insurers, as the best way to fix it.
Meanwhile, House leaders, health Secretary Dr. Aldona Wos and McCrory prefer having North Carolina providers and health care systems involved in accountable care organizations that carry a larger risk-reward expenditure role.
Wos has asked for almost a year that legislators give DHHS the flexibility and the time it needs to complete internal reforms and produce cost savings.
Proposed oversight authority
Senate Bill 696, sponsored by Sen. Ralph Hise, R-Mitchell, reintroduces what he promoted during the joint legislative oversight hearings.
The bill calls for drastic oversight changes to create more accountability and transparency.
The main element would establish an independent authority within the Department of Health and Human Services, known as the Health Benefits Authority, which would be governed by a paid, seven-member board of directors. The authority would take over the program Oct. 1.
Health experts in administration, insurance, actuarial science, economics, and law and policy would comprise the board.
The proposed authority would be required “to keep the Medicaid and Health Choice programs within their budgets” and publish a rolling, four-year forecast of enrollment growth and demographics, potential service reductions and additional financing.
A major, bipartisan criticism of DHHS’ handling of Medicaid the past 2½ years has been the lack of dependable data and forecasting, though much of its work had been outsourced to an out-of-state vendor.
When Hise brought the proposed bill to the legislative oversight committee, members did not hold a recommendation vote and the limited bill description was reduced to headlines — the same ones holding the place for House Bill 372 and Senate Bill 574.
Lambeth said the decision by Hise to move forward with his bill “does have a negative impact and complicates any solution.”
Senate Bill 703, sponsored by President Pro Tem Phil Berger, R-Rockingham, would require the DHHS to convert the existing Medicaid program by Jan. 1, 2017, to one organized as a “capitated, risk-based, managed care” program.
The two-page bill would require the DHHS to enter into “risk contracts with at least three statewide Medicaid physical health managed care organizations (MCO) that assume full risk for all Medicaid benefits.”
All beneficiaries would have to be enrolled in one of those MCOs.
The DHHS would have to present its transfer plan by Oct. 1, as well as estimates on potential cost savings
The N.C. Medicaid Choice Coalition, whose members include for-profit insurers, supported Hise and Berger’s bills as “ offering real solutions to out-of-control Medicaid spending.”
“Real reform that allows private sector traditional managed care organizations to compete with provider-led plans is in the best interest of taxpayers and Medicaid recipients.”
Senate leader’s proposal
Sens. Hise and Harry Brown — a Republican from Onslow County and the Senate majority leader — introduced Senate Bill 701, with a goal of eliminating the Medicaid and Health Choice primary care case management contracts by Jan. 1.
The DHHS would be required to submit its plans for ending the contract to the federal Centers of Medicare and Medicaid Services by Oct. 1. If CMS doesn’t approve the DHHS plan by Jan. 1, DHHS is required to stop all payments Jan. 1.
Brown and Hise said the state would save $172 million annually by eliminating those primary care case management contracts, but they do not provide details on how that would be accomplished. The savings would be used to “mitigate the lost reimbursement to primary care providers for their primary care case management participation.”
Community Care of N.C. saved the state almost $1 billion in Medicaid costs between mid-2006 and mid-2010, according to an independent actuary’s report in 2011.
In April 2013, U.S. Sen. Richard Burr, R-N.C., praised Community Care as its leaders were presented an effectiveness award from Healthcare Leadership Council, which represents medical industry chief executives.