NCGA Committee Action Threatens Medicaid Reforms | 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.

Disagreement between House and Senate remains; DHHS wants more time

    RALEIGH     The thoroughgoing reforms in Medicaid outlined 18 months ago by Gov. Pat McCrory are no closer to fruition now than they were when the governor introduced his Partnership for a Healthy North Carolina in April 2013 - and after this week's meeting of the Joint Legislative Oversight Committee on Health and Human Services, it appears that the basic structure of the state's Medicaid system could remain unaltered through the 2015 long session of the General Assembly.

    An amendment introduced at Tuesday's committee meeting stripped specific recommendations from an earlier report replacing the state's current fee-for-service Medicaid system to a modified managed-care arrangement.

    The "managed care organization" model rejected by the committee largely mirrored McCrory's 2013 proposal. It would have ended the monopoly control of Medicaid, the health insurance program for the poor and disabled, by the nonprofit Community Care of North Carolina and instead allowed CCNC and other providers to bid for patient care.

    As a result of the committee's actions, the two chambers of the General Assembly are likely to spend the long session rehashing earlier debates over the direction of Medicaid provision. Meantime, Secretary of Health and Human Services Aldona Wos says the Medicaid's fiscal health is improving, suggesting that sweeping reforms her department once supported may not be necessary.

    "I think the intent of the amendment [sponsored by Rep. Nelson Dollar, R-Wake] was to sabotage the work the committee had done, and the steps we had made toward agreement between the House and the Senate" in the Subcommittee on Medicaid Reform/Division of Medical Assistance Reorganization, said Sen. Ralph Hise, R-Mitchell, who co-chaired the subcommittee, of which Dollar is a member. That panel approved the reform guidelines just last week.

    That reform plan would have created regional networks of accountable care organizations run by providers alongside insurance company-led MCOs that would be required to offer primary care, hospitalization, long-term care, mental health services, and other components of a full-range of services.

    The state would have paid each network a per-member, per-month fee to coordinate patient care. Less healthy people requiring more expensive care would receive higher monthly subsidies from the state.

    State Sen. Louis Pate, R-Wayne, the lone vote against passing Dollar's amendment, said the reversal will prolong negotiations, and "it could be" that the upcoming session that starts Jan. 14 may be unable to agree on reforms.

    "I was hoping that we would have something that perhaps a majority of both bodies could support, but we'll just have to see what the will of the General Assembly is towards Medicaid reform," Pate said.

    From the outset of reform talks DHHS "has come in to do whatever they can to make sure that Medicaid is not divided out from the Department of Health and Human Services," Hise said. The Senate wants a standalone agency to administer Medicaid. The Program Evaluation Committee is tackling that governance issue.

    DHHS wants "to maintain that authority under the current department [and] make sure that MCOs don't provide any services in this state, and don't have a role in the future of Medicaid," Hise said.

    Wos and several top DHHS staff members attended Tuesday's meeting. She gave an impassioned plea to allow her to continue internal repairs to the system she inherited.

    "The Medicaid budget is in the best shape it's been in for five years. We've improved our budget forecasting model. We're making strategic investments in behavioral health, and we launched a claim-based payment system that was years behind schedule," while filling key but vacant leadership posts, Wos said.

    She opposes a managed care model to administer Medicaid and hold providers accountable for controlling costs. Medicaid ran $1 billion in deficits over four years before turning a small surplus last year.

    "I firmly believe that the provider-led, patient-centered [ACO] model focused on the whole person care needs to be enacted and implemented in North Carolina," Wos said.

    Hise bristled at the assertion that the Senate wanted only a managed-care model. "I would like to see both MCOs and ACOs participating in the state of North Carolina. I think any time you have a competitive nature between individuals providing service you end up with better results," Hise said.

    Two systems would "establish a safety net," he said. "If one happens to fail you still have the other still remaining in place ... to make sure that we don't get the disruptions in service."

    He noted that the only purely managed care proposal that has been advanced in the state came from Wos and McCrory, and "you saw the General Assembly rejected that concept pretty handily."

    Dollar said he introduced his amendment removing all the recommendations, and even questioning the findings, because of "very serious concerns" with the reforms, and "grave concerns about saying we're going to bring in commercial managed care companies."

    Managed care failed in North Carolina in three previous attempts, Dollar said.

    "It failed in a hospital experiment back in Mecklenburg in the '90s. We had HMOs. That failed. Value Options in behavioral health failed," Dollar said.

    Further, he said, the report didn't specifically mention keeping Community Care of North Carolina, the nonprofit currently administering much of the Medicaid population, or its patient-centered, medical home model assigning a primary care doctor to a Medicaid recipient to coordinate patient care.

    "I think Nelson Dollar has been a strong advocate for the Community Care network in the state and maintaining the status quo," Hise said. "It was my interpretation that he is looking for whatever system is good for the CCNC network."

    Many unanswered questions remain about CCNC's effectiveness. "[CCNC representatives] have come several times to the General Assembly to present billions of dollars in savings that they claim were part of the network," Hise said. But they neglected to mention the savings included population shifts away from the most expensive aged blind and disabled individuals to more children, "which would obviously bring down your costs of per-person care."

    Such omissions create "a lot of challenge believing what they've given," Hise said, "and we're very interested in finding a third-party, outside source in evaluating those" savings claims.

    Wos, Dollar, and state Rep. Marilyn Avila, R-Wake, all spoke in favor of building on the current system in an ACO model instead of starting from scratch with managed care.

    "We started this whole process by saying the system was broken. I would venture to say it's not broken," Avila said.

    Hise said the complaints about the implementation problems of creating MCOs are disingenuous because there are no ACO systems in place either, and both would have to be created.

    Most ACOs deal with Medicare, "and that's distinctly different than what you have in Medicaid," Hise said. 'It's not predominantly dealing with pregnant women and children," but there is some overlap in the aged, blind, and disabled populations covered by both programs.