NCGA Chambers Still Disagree on Direction of Medicaid | Eastern North Carolina Now

    Publisher's note: The author of this post is Dan Way, who is an associate editor for the Carolina Journal, John Hood Publisher.

Lawmakers says reforms essential to prevent program from busting budget

    RALEIGH     If North Carolina doesn't reform its Medicaid delivery system, costs of the government insurance program for the poor and disabled will grow faster than new state revenue, says state Sen. Ralph Hise, R-Mitchell.

    Hise, co-chairman of the Medicaid Reform/Division of Medical Assistance Reorganization Subcommittee, offered that assessment Tuesday after the panel came to a tenuous agreement on broadly written recommendations for the program to the Joint Legislative Oversight Committee on Health and Human Services.

    Hise also doubled down on statements he made to Carolina Journal in October that Medicaid expansion is unlikely any time soon.

    "I don't think we can say in any way that we're prepared as a state in North Carolina to issue an expansion of Medicaid," Hise said.

    Adding to the debate over expanding Medicaid is a continuing dispute between the two legislative chambers over the best way to move forward with the existing Medicaid program - whether to maintain the fee-for-service system now in place favored by House members or shift to a managed-care model that senators back. Senate leaders also want to move Medicaid out of the Department of Health and Human Services, making its administration more autonomous; the House strenuously objects to that proposal.

    When the Obamacare healthcare.gov insurance exchange launched last year, North Carolina had nearly 120,000 enrollment backlogs across the state.

    "The feds even threatened to withhold all our funding because we couldn't process" the backed-up enrollments, Hise said.

    "To believe right now without any change in the system we could process an additional 500,000 more approved Medicaid recipients within a year is almost ridiculous," he said.

    Subcommittee members were divided over granting DHHS Secretary Aldona Wos more time to determine if her reform plans will succeed, or taking more immediate legislative action.

    The panel approved guidelines to create a new Medicaid system within three years, if feasible, with providers and contractors responsible for 100 percent of costs.

    Other recommendations include defining measurable goals for health outcomes and quality of care, ensuring regional access to care, and implementing administrative efficiencies to reduce costs.

    "We have exhausted most of the manners of cutting the Medicaid budget that remain. What we have left on the table are optional services and population cuts," or reduced payments to doctors and hospitals, Hise said.

    Medicaid spending growth is projected to exceed 6.5 percent for the foreseeable future.

    "No forecast of our revenue right now is exceeding a 6.5 percent growth. Medicaid will continue year after year to grow to become a larger portion of the budget, and in most years may take more funds than we have increased revenue," Hise said.

    He added that several large health care providers and insurance companies operating in the state have told him they could transition into managed care or accountable care networks in 18 months to help the state shift out of the health care management business.

    "We are to manage a budget. We are to manage policies and procedures. But we make every policy decision at budget time in the General Assembly," Hise said. "It's a model that has to change moving forward, and I don't believe it's one we can carry through another budget cycle."

    State Sen. Louis Pate, R-Wayne, also called for immediate reform.

    "I know that raising $2 billion to fill in for budget overruns for the past several years has not been any good. It has hurt our state, and it has hurt, in my opinion, the health care of the very people that we're supposed to be providing to," Pate said.

    "I hope that this will be the genesis of allowing the upcoming General Assembly to develop something," he said of the panel's report.

    But Wake County Republican Reps. Nelson Dollar and Marilyn Avila cautioned against reinventing the Medicaid delivery system, which is based on a "medical home" model that places patients with primary care physicians who are responsible for monitoring patient health.

    "We're getting a handle on it," Avila said of the endemic budget forecasting and administrative problems in Medicaid.

    "We know some of the things we need to do, and can do that in the existing system, and give us a chance to study instead of going from something that doesn't work, we think, to something we don't know if it's going to work, and we're going to be experimenting," Avila said.

    It's too soon to scrap North Carolina's medical home model, especially as improved oversight and measurement goals being defined could "do the job without tearing the whole system apart and putting it back together, and then find out 'Whoops, sorry, that's not going to work in three years,'" Avila said.

    Dollar said limiting the state to a check-writing function for private-sector administration of Medicaid is a "problematic concept." He believes the legislature needs to be more hands-on, especially to ensure there is health care access in hard-to-serve areas.

    He contends much of the $2 billion budget overruns in recent years were not due to problems with the Medicaid fee-for-service payment model as much as they were caused by shoddy budget projections, miscalculations of federal receipts, changing federal regulations, and poorly designed and administered service programs.

    Setting those issues aside, growth in Medicaid was actually below the national average, and lower than costs in states with managed care systems, Dollar said.

    "We will need to continue to build on our existing health care system including CCNC" if the state hopes to develop an appropriate set of metrics to improve health outcomes, Dollar said.

    Community Care of North Carolina is the nonprofit administrator of most of the state's Medicaid system. Advocates say the medical-home model is a money-saving system, and the envy of other states. Critics say it is needlessly expensive and has failed to deliver better care to Medicaid patients. Hise said the state still cannot verify that CCNC saves the state money, as three CCNC consultants have claimed in various reports.

    One CCNC report said the nonprofit management corporation saved the state nearly $2 billion in total costs.

    Hise expressed frustration that lawmakers cannot retrieve information from the DHHS computer system NC Tracks to determine whether CCNC's care coordination system has cut costs.

    In February, the state Auditor's Office launched performance audit of CCNC, requested by the General Assembly, to verify the agency's cost savings claims. But auditors have been hampered by the unfriendly design of the computer system.

    "We had a real hard time getting reliable data out of the new archiving system that they had" at DHHS, said Bill Holmes, a spokesman for the auditor's office. "What we were able to pull out didn't reconcile with what they said they put in." The expected six-month study has now stretched into nine, Holmes said.

    And then the contractor doing the study, Obamacare architect and MIT economist Jonathan Gruber, was discharged after videos of him surfaced discussing how the national health care reform law was passed deliberately using deceit, and calling the American public stupid for not recognizing they were being hoodwinked.

    "We have released Dr. Gruber, and we are in the process of looking for another contractor who's an expert in that kind of data," Holmes said.

    "We would use raw numbers that he was able to pull out of the system," Holmes said. "We would not use any analysis that he did. I don't know that he got to any analysis."

    Gruber was awarded the contract for $200,000. He submitted an invoice for $60,000, and the state agreed to pay him another $40,000 beyond that, Holmes said.

    The Auditor's Office will rebid the work, hoping to remain within the $200,000 originally budgeted.