House Set To Take Up Senate Medicaid Reforms | Eastern North Carolina Now

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

Louisiana’s experience may offer model for Tar Heel State

    RALEIGH     With "consistent support from the [GOP] caucus," the House Health and Human Services Committee will take up a Senate-passed bill today to reject two provisions under the federal Affordable Care Act -- Medicaid expansion and creation of a state-run health care exchange -- said Jordan Shaw, a spokesman for House Speaker Thom Tillis, R-Mecklenburg.

    Shaw said media reports that the House planned to slow the legislative process were incorrect. "Honestly, it's probably moving a little bit quicker than normal, he said.

    Even so, Shaw said, "We're expecting [S.B. 4], in some version, to pass" the House as early as this week.

    "I think everybody has heard some of the governor's concerns," Shaw said. "We are working with the governor's office to address the details.

    "That doesn't mean we're slowing it down, it doesn't mean we're waffling on the issue. It means we're going to do what we said we were going to do," Shaw said. "The speaker is not in favor of expanding Medicaid or creating a state-based exchange."

    House members are in sync with McCrory on putting off Medicaid expansion because of "well documented problems" revealed in a state audit, he said.

    "Whether that's through mismanagement or misimplementation, we have a Medicaid system that by a lot of accounts is broken. So I think a lot of House members are struggling with the thought of pouring more money into a system that's broken," Shaw said.

    Officials at the state Department of Health and Human Services are exploring possible market-oriented options to reform the beleagured Medicaid service delivery system run by the nonprofit Community Care of North Carolina. Those could include a competitive, full-risk, managed care model.

    "I can't really speak for what they're going to do. That's a different branch of government," Shaw said. "Until we figure out the direction they're going, it's hard for me to forecast" what the General Assembly may due to reform Medicaid.

    Bruce Greenstein, secretary of Louisiana's Department of Health and Hospitals, aka Bayou Health, said he is "very familiar" with CCNC. Under the leadership of Gov. Bobby Jindal, the Pelican State is among several that abandoned its previous CCNC-style program. It neither controlled costs nor improved patients' health conditions, he said.

    "I have very deep doubts in a system that holds no risk and no accountability that we get much different services," Greenstein said of the CCNC model. It is a fee-for-service, primary care case management construct in which Medicaid recipients are assigned to a primary care doctor - a patient-centered medical home.

    The belief is patients getting regular "medical home" treatment will be hospitalized and seen at emergency rooms less often, lowering costs. In practice, patients often visit the doctor's office more often, driving up costs. In North Carolina, billion-dollar cost overruns are passed on to taxpayers. In a full-risk scenario, the plan manager assumes those extra costs.

    "We felt like we weren't getting the best value for the dollar, and we weren't helping those we give care to to get better health outcomes," Greenstein said. Louisiana was ranked 49th in the U.S. in health outcomes and 11th in the nation for highest per capita spending under that system, he said.

    So the system was tweaked to a pay-for-performance plan in which a primary care doctor received incentives to reserve daily open office hours and after-hours slots for Medicaid recipients to prevent them from going to the emergency room, and for reduction in emergency department admissions.

    "So we basically tried and tried again, and found that that way of doing PCCM just doesn't work," Greenstein said.

    A primary care doctor's office is not equipped to oversee the full range of Medicaid services, from pharmacy and in-patient hospitalization to eligible medical expenses and emergency department usage, Greenstein said.

    Even with the patient-centered medical home, a primary care doctor's ability to manage "complex, chronic-condition patients is really not their sweet spot," he said.

    Rather, "it makes far more sense" with regard to efficiency to have a full-risk, plan manager that can use sophisticated analytics and health information technology, he said.

    When Greenstein came on board in 2011 he decided to scrap the state's prepaid managed care plan that had no guaranteed rates for providers, and no medical loss ratio that guaranteed plans use a set percentage of insurance premium dollars for care and not administrative costs.

    State health officials "met with hundreds and hundreds of providers, recipients, and interested people" to collect feedback that was used to create the current Bayou Health coordinated care plan that has captured the interest of Medicaid reformers around the country.

    Beneath the Bayou Health umbrella are two types of managed care operations. One features three plans that are prepaid. They cover primary care and specialists.

    The other has two plans based on shared savings, similar to what Medicare started a year ago. That is a managed fee-for-service program under which the health plans get a capitated fee to manage the care of individuals. Claims are paid in a fee-for-service mechanism, but at the end of the year the spending is reconciled based on the patient's previous 24-month health history.

    "We take the money that we save by managing the care and we split it between the health plan and the state," Greenstein said.

    Among reforms "that won praise from the provider community and allayed some of the anxiety associated with change" was creating a Medicaid rate floor so, unless otherwise negotiated, providers would get no less than the Medicaid rate, he said.

    A medical loss ratio was established, "so the notion of these out-of-state plans flying in and taking all of our money would not be possible," he said.

    Health plans bid for contracts on how much quality, value, and additional services they could deliver. Only the best submissions were picked.

    "This was a huge relief to providers, who didn't want to deal with, say, 13 or 15 different Medicaid health plans," Greenstein said.

    Health plans chosen by the state to compete for a share of Bayou Health's Medicaid population receive performance bonuses. Medicaid recipients who choose not to select their own plan from among competing plans are assigned to one of those with the best performance. Plans seeking a larger share of the Medicaid population must demonstrate better health outcomes.

    "I call that the best element of competition -- increasing the health outcomes of the people you serve," Greenstein said.
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