Joint panel starts work on Medicaid reform, reorganization

Posted September 24, 2014
Updated September 25, 2014

N.C. health, mental health, Medicaid generic

A legislative oversight subcommittee began work Wednesday on the issues of Medicaid reform and potential reorganization of North Carolina's multibillion-dollar program.

The panel was created by the Joint Legislative Oversight Health and Human Services Committee to study the two topics and make recommendations to the committee for submission to the House and the Senate in 2016.

Both House and Senate lawmakers unveiled and voted on reform proposals earlier this year, but the two chambers' approaches were miles apart.

House leaders proposed letting health care providers form accountable care organizations to manage Medicaid care and costs, while Senate leaders proposed removing Medicaid entirely from the Department of Health and Human Services, turning it into an independent agency under the control of a politically appointed board and allowing large for-profit insurers to bid to run the program.

Gov. Pat McCrory has publicly sided with the House's proposal, as have those medical groups who have taken a position on the issue. 

DHHS Secretary Aldona Wos has been openly critical of the proposal to remove Medicaid from her agency, warning that the program is interwoven with other DHHS services to provide better coordinated care. She reiterated her position Wednesday morning. 

Wos told lawmakers she has worked for the past year and a half to restructure her agency, including Medicaid – efforts she says are already bearing fruit. 

"I firmly believe that the decision to remove Medicaid from the department would be a direct contrast to the path that we are on," Wos said in her opening remarks. "Such a decision would be disruptive. It would divert resources and human capital from the ongoing day-to-day operations of the division.

"We are close to the finish line for the improvements we are making. We are witnessing collaboration and progress, and to turn around now before we get to the finish line and realize the full benefits of all this work would be a waste of taxpayer money and greatly disruptive to those that need our services," she told lawmakers. "If you don’t fix how the program works, it doesn’t matter where it is."

According to presentations by legislative staff, only about a quarter of states have split off their Medicaid programs into standalone agencies. In most states, as in North Carolina, the program is housed within a larger state agency.

Proponents of the standalone option say it would improve focus and accountability within the program. Critics of the idea say it would require duplication of administrative and operational costs and could lead to less efficient delivery of services.

Several House lawmakers questioned whether the state ought to be attempting to both reform and reorganize the Medicaid system at the same time.

"What sort of order would you all advise?" Rep. Nelson Dollar, R-Wake, asked Mercer consultant Marcia Morgan.

Morgan replied that the functions lawmakers want the reformed Medicaid program to serve – whether monitoring contracts with managed care organizations or managing direct fee-for-service programs – would have an effect on how and where the program should be structured.

"It’s just my opinion, but you should know what direction you’re going” before reorganizing the program, Morgan said. 

At its next meeting Oct. 6, the committee will hear from Medicaid officials from several other states about their respective reform efforts. Ohio, which split off its Medicaid program into a standalone agency last year, will be one of the states represented. 

Still, Morgan cautioned lawmakers not to assume that other states' Medicaid reform experiences, good or bad, would be repeated in North Carolina because each state has unique factors.

"If you’ve seen one Medicaid program, you’ve seen one Medicaid program," she said. "It’s hard to do an apples-to-apples comparison."


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  • recontwice Sep 26, 2014

    No matter which proposal you support if you are on medicaid you are going to get f@@ked!For profit means more concern for the bottom line than the people they are suppose to serve!Another indicator of how little republicans care about the people!When will mc crory address all the hospitals losing money because he refused Medicaid expansion?

  • 42_wral_mods_suck_i'm_gone Sep 25, 2014

    Pay close attention tea party and GOP extremists. McCrory, TIllis, and the GA are getting ready to EXPAND Medicaid. They know they were wrong not to expand it. NC is out Billions of our tax dollars. Now here comes the cover for the expansion and their stupidity. Better late than never.

  • iopsyc Sep 25, 2014

    View quoted thread

    Second try posting this.....

    Privatizing government services and programs rarely ends with a cost savings to taxpayers. For a prime example look no further than the Chicago parking meter fiasco. The rights to the meters were sold for a paltry one time fee, and immediately after closing the deal, the new "owners" drastically raised rates.

  • miseem Sep 24, 2014

    View quoted thread

    You think you have problems through government operated fee for service medical treatment, just wait til you encounter the bean counters who determine what services, treatments, and medications will be provided on a capitated contract. The only way the managed care company makes any money is to cut medical costs, and the easy way is to cut services. It's hard enough to argue with Blue Cross on a group health policy that Blue Cross can increase premiums on. Try that with a contract for a fixed payment per patient over a contract period. As soon as the profit margin starts to shrink, so do the services, treatments, prescriptions you can receive, and reimbursements to providers. Then, if it shrinks too much, the managed care company just sues the state for more money claiming they were provided incomplete information leading up to the contract. So essentially, the only losers in this are the patients, taxpayers and health care providers.

  • 50s Child Sep 24, 2014

    ""We are close to the finish line for the improvements we are making."

    We hear that every time DMA screws up. Ever hear the story of the boy who cried wolf? People stopped listening to him.

  • mikemtnbike Sep 24, 2014

    I would like to see one article that reports where the perspective of the people who participate in Medicaid- the actual recipients, not the managers or providers, but the service recipients- is taken into account. Everything I read shows that only the people making money off the benefit are being consulted- never the people who just need it.

  • oakcity Sep 24, 2014

    WOW!!! You have never worked in a private company. Fraud and waste run rampant in corporate America. Privatization is not the cure all for everything. You've just been led to believe that corporations have your best interest at heart. I work with large corporations in my job and there is constant waste and disorganization. My wife also works for a very large corporation, they have lots of meetings to set up meetings to discuss meetings they'l have in the future. Don't believe a businessman, he's only out for the dollar.

  • smdrn Sep 24, 2014

    Time to privatize Medicaid. Private companies don't put up with waste and fraud like our government does. Since it's been proven that you can't trust anyone these days, providers need to be held accountable to provide proof of service, which all honest providers do anyway. The days of sending in a check request and the government paying it with no questions asked need to go.