Of the 21 co-sponsors on HB184, 12 received contributions from the North Carolina Hospital Association PAC. Two of the co-sponsors received the maximum contribution, and the average contribution for co-sponsors was $1,762.
In all, the North Carolina Hospital Association PAC made $39,300 in political contributions to legislators that have signed on to HB184.
Admittedly, there are plenty of legislators who received contributions from the Hospital Association PAC and did not sign on to this legislation but zeroing in on that misses the larger point.
Bryson concludes that there is clear and ample evidence to show that the North Carolina hospital lobby has a great deal of interest in defeating Treasurer Folwell's plan to reform the State Health Plan.
He then asks a few follow-up questions: (1) Why has the hospital lobby created a shell-organization (the Partnership for Innovation in Health Care, or PIHC) to advocate on its behalf? (2) Why is the hospital lobby opposed to having transparency in their pricing? (3) Why is the hospital lobby fighting pricing transparency on the state health plan while some at the same time lawmakers are proposing a new hospital tax to pay for Medicaid Expansion?
Civitas (Donald Bryson) has done some excellent investigative work and has uncovered some troubling activity on the part of the hospitals and some serious connections between their lobbyist and PAC organization and the legislators who are supposed to be working on behalf of the people. Bryson's
"connecting of the dots" should cause us all to be skeptical of the hospitals' motives and to feel betrayed by those who sponsored and who voted in favor of HB-184.
Bryson ended his article with this comment:
"The Treasurer's plan is not necessarily a silver bullet, but the unfunded liability is at least 130% larger than our state government's annual budget. Jones Street needs solutions before we bankrupt ourselves. Meanwhile, expect PIHC and the North Carolina Healthcare Association to retreat to the same tired boogeyman that they use to advocate for Medicaid Expansion and fight Certificate of Need reform - the impact on rural hospitals."
Reference: Donald Bryson,
" State Health Plan Fight: Follow the Money, Part 2" - https://www.nccivitas.org/civitas-review/state-health-plan-fight-follow-money-part-2/
II.
THE HOUSE FLOOR: DEBATE & VOTE (Wednesday, April 3)
It was clear from the start that House leadership, namely House Speaker Tim Moore, was intent on moving HB-184 along very quickly. It went to the Health Committee last Tuesday (March 26) where it passed easily, with only two opposing votes - one from Rep. Phil Shepard (R-Onslow) and the other from Rep. Michael Wray (D-Halifax, Northampton). During the discussion period, Rep. Shepard spoke in opposition to the bill, saying: "Constituent feedback is 2-1 against this bill. There's a lot of unanswered questions for me and a lot of my constituents. Why the rush to move this bill? We need time to do a thorough analysis of both sides' claims."
After passing out of the Health Committee, HB-184 was then set for the Insurance Committee. But surprisingly it was told to skip Insurance and go straight to the House floor for a vote. It took a week for the bill to move forward from committee to a floor vote.
As mentioned earlier, HB-184 was debated on the floor of the House on Wednesday, April 3 Although it was obvious that the bill would pass in the House, there were some conservative representatives who tried to effectively kill the bill, and their attempts deserve mention.
First, Representative Michael Speciale (R-Craven) offered two amendments to the bill, one targeting Section 1(b) and the other targeting Section 2.
Rep. Speciale's first amendment would alter the language of Section 1(b) two-fold: First, it would make the State Treasurer (Folwell) a
"voting" member on the Study Committee and secondly, it would make it impossible to expand the size of the Committee (which is a tactic used when the "powers that be" don't like the direction a committee seems to be taking).
This first amendment passed by a vote of 106 to 5.
Rep. Speciale's second amendment would remove Section 2 completely from the bill. Recall that Section 2 prevents the Treasurer and the Board of Trustees for the State Health Plan from making any changes to the provider network or reimbursement rate fee schedule during "the study period" - ie, until December 31, 2020. In other words, this section mandates that the current arrangement with third party administrator Blue Cross and Blue Shield of North Carolina continues (remains unchanged) until that date. Section 2 also prevents the Treasurer from switching the Plan to using referenced based pricing for medical services to the Plan during the
"study period."
The sponsors of the bill opposed the amendment, asserting that removing Section 2 would
"gut the bill."
That amendment failed by a vote of 88 to 23.
During debate on HB-184, Rep. Larry Pittman (R-Cabarrus) cited a memo from the State Health Plan's Board of Trustees that projects that the plan will be out of money in 2023, and warns that the State cannot wait on a two year study before it acts. The Memo urges action now. Rep. Pittman talked about how hospital groups were groaning about how burdensome the Treasurer's planed payment changes would be on them [tie pricing of medical services to 172% over the average that Medicare pays for the same service], yet pointed out how well-funded many hospitals are. To support that claim, Rep. Pittman mentioned that the hospital at East Carolina has given $10 million dollars to fund a stadium.
He also addressed how the hospitals dealt with Treasurer Folwell in bad faith. When Folwell had requested payment schedules from the hospital groups, they sent them to him; however, page after page was blacked out.
"They might as well have slapped him in the face and spit on him," Rep. Pittman said.
Pittman also emphasized that the bill would hurt taxpayers but would hit members of the Plan (state employees and retirees) especially hard in that they would have to pay increased premiums and also pay the costs for the unfunded liabilities thru increased taxation.
"They would get hit two ways," he said.
Rep. Pittman called Dale Folwell and "
honest" and
"competent" man and urged his fellow legislators to
"Defeat this bill."
Rep. Michael Speciale got up to speak again, this time to give his reasons why the bill should be voted down. He said,
"We're told that if we don't pass this bill, the sky will fall; we'll lose our rural hospitals." He said that they'd heard the same thing when he was trying to get rid of the CON [Certificate of Need] laws.
"That effort to get rid of the CON laws failed, but nevertheless, shortly thereafter, Vidant closed one of the hospitals in my district anyway."
"I hear fake news ads" [on the topic of rural hospitals closing if HB-184 doesn't pass] when I drive in my district," he said.
Rep. Speciale, as Rep. Pittman before him did, went on to explain how the hospitals dealt with Treasurer Folwell dishonestly and in bad faith. Folwell met with those who are opposing him [mainly large hospital groups] and asked them
'How much waste, fraud, and abuse is there is in the system?' The answers they give him ran from 12% to 25%, and so he asked them to figure out how they could reduce costs by 15% (the number he chose from the range they gave him, deliberately intending for there to be as little waste, fraud, and abuse as possible) and said that they needed to get together again as soon as that was done. After that meeting, Treasurer Folwell tried to set follow-up meetings with the hospitals, and time after time he was given excuses why they could not meet with him.
Rep. Speciale continued, "Now we're faced with $33 to $36 billion dollars in unfunded liabilities. If we don't allow him to cut costs, how are we going to cut costs because it'll be on us!"
As to the fears that rural hospitals would be closed if Folwell were allowed to go forward with his reforms, Rep. Speciale said: "Dale Folwell has increased what would be going into rural hospitals. He's compromised, but they won't budge an inch. If we do not pass this bill, then the hospital lobby will sit down and talk to him. Let the state Treasurer do what he was elected to do. Throw the politics aside and vote NO !"
; Rep. Keith Kidwell (R-Beaufort) also got up to speak in opposition to the bill. He said, "For the last 10 years, health care costs have gone up and up. We asked Treasurer Folwell to handle it. Let's not bobble him, or we'll be faced with taking $235 million to $509 million [dollars] from the general fund to deal with the problem AND $1.1 billion will be added to the unfunded liability. HB-184 will cost us a ton of money. We need to cut through partisanship and look at the numbers. We HAVE to block this bill !"
In spite of the arguments and some inconvenient truths, HB-184 (as amended by Rep. Speciale) passed 75 to 36, and it will now be sent to the NC Senate where it is hoped that the bill will be defeated.
The Republican members of the NC House who voted IN FAVOR of the bill are:
Lisa Stone Barnes; John Bell (Greene, Wayne, Johnston), James Boles Jr., William Brisson, Jerry Carter, Kevin Corbin, Ted Davis Jr. (New Hanover), Jimmy Dixon (Duplin, Onslow), Josh Dobson, Jeffrey Elmore, John Faircloth, John Fraley, Holly Grange (New Hanover), Bobby Hanig (Currituck, Dare, Hyde, Pamlico), Cody Henson, Craig Horn, Julia Howard, Chris Humphrey (Pitt, Lenoir), Frank Iler (Brunswick), Steve Jarvis, Donny Lambeth, David Lewis, Chuck McGrady, Greg Murphy (Pitt), Larry Potts, Wayne Sasser, Mitchell Setzer, Carson Smith, Sarah Stevens, John Szoka, John Torbett, Rena Turner, Harry Warren, and Donna McDowell White.
