By Richard Craver
Let the great state Medicaid reform debate begin … again.
The state House voted 105-6 on Tuesday to pass Bill 372, which features a provider-led format for addressing the risk involved in the $14 billion state Medicaid program. One of the four co-sponsors is Rep. Donny Lambeth, R-Forsyth.
Medicaid reform arguably is the biggest sticking point between state Republican leaders and Gov. Pat McCrory, who has said repeatedly he thinks the program is broken. Some health care advocates dispute that assessment, though.
Medicaid covers about 1.9 million North Carolinians. It has had a nearly $2 billion financing gap since the start of the 2009-10 fiscal year.
The House legislation attempts to “modernize and stabilize” the program through a “whole person” strategy of coordinating physical, behavioral, dental, pharmacy and long-term health services. The reform would occur over a five-year period.
Bill sponsors are touting a hybrid approach that has a role for provider-led entities (PLE), accountable-care organizations (ACO) and for-profit insurers. Though a PLE can contract with a for-profit insurer, those insurers cannot have a majority stake in the group.
“We believe we have come up with a system that offers reform and modernization for decades to come,” Lambeth said. “We are creating a North Carolina solution that builds upon the strengths within North Carolina.”
However, the bill may face a stiff challenge just to get heard in a Senate committee.
Key Senate leaders are promoting a drastic program overhaul that features a prominent role for for-profit insurers and managed care organizations (MCO).
The legislature failed to reach consensus on a similar Medicaid reform push in 2014. House and Senate leaders have said they are willing to keep the long session going until a reform bill is approved.
Bill 372 passed easily in part because there already had been robust discussion at the committee level.
Lambeth said he has been working behind the scenes on what he believes is “transformational” legislation that would draw bipartisan support and keep Medicaid oversight within the N.C. Department of Health and Human Services.
The PLEs, such as health care systems, hospitals and physician groups, would take the risk of Medicaid enrollees’ use of services through a capitated, or fixed-fee per individual, payment format.
By comparison, the current system is based primarily on a fee-for-service format.
The PLEs would cover at least 90 percent of Medicaid recipients.
Involved would be behavioral health managed care organizations, such as CenterPoint Human Services and Partners Behavioral Health Management, which serve the Triad and Northwest N.C.
Lambeth said there is agreement among House and Senate leaders of the need for Medicaid reform to improve quality, sustainability and cost reductions.
“The current system rewards volume — the more you do, the more you get paid,” Lambeth said. “The new system rewards quality and value.”
Several Medicaid reform bills have been submitted in the Senate this session. Though none has been acted upon, legislation is included in the Senate budget proposal approved Thursday.
Senate leaders remain committed to establishing the Health Benefits Authority, an oversight board nominally within DHHS, which currently handles the state Medicaid program.
Supporters of the authority say Medicaid may have become too big for DHHS to handle efficiently. Many key Senate leaders are frustrated with DHHS’ inability to provide timely and dependable cost and budget projections.
The authority would be governed by a paid, seven member board of directors. It would feature experts in administration, insurance, actuarial science, economics, and law and policy.
Sen. Phil Berger, R-Rockingham, the president pro tem, and Sen. Harry Brown, R-Onslow, majority leader, said the authority would take a major step toward overhauling the “chronically troubled and over-budget Medicaid program and lead the state toward a patient-focused, cost-minded vision for the program.”
Rep. Nelson Dollar, R-Wake, and a co-sponsor, said “our friends (in the Senate) want to move too fast on reform.”
“HMOs can start up more quickly and initially offer a lower bid. But after the initial contract, you have to be concerned” about for-profit groups pulling out.
Rep. Marilyn Avila, R-Wake, said that while she supports the House version, she looks forward to the debate the bill will draw in the Senate.
“I am hopeful that the debate will develop the best solution for North Carolina residents, while putting the state on a better financial footing,” Avila said.