McCrory, feds differ on Medicaid rule

U.S. Health and Human Services officials, speaking on background, say the governor's interpretation of the rule is flawed. 

In a 45-minute question-and-answer session with Heritage Vice President Becky Dunlop, McCrory said he decided not to expand Medicaid because he didn't feel the state's Department of Health and Human Services could handle the expansion.

"In a very short period of time, I would have had to put a brand-new bureaucracy together at a time period that I couldn't meet. I knew I couldn't meet it when my current bureaucracy couldn't handle the Medicaid costs overruns that were currently happening," he said.

But McCrory hinted that that decision could change. 

"We just got a new reg which might, in fact, force us to do Medicaid expansion, whether we want to or not, in the upcoming year," he told the audience.

"A new reg came out five or six or seven weeks ago which basically says, if a person goes to the hospital and they say they cannot pay for it and they might not even qualify for Medicaid, they can still sign up for Medicaid, even if they're not under one of the four or five characteristics of a Medicaid recipient," McCrory said.

"If they do that, the hospital then and that person can bill the state of North Carolina for two months," he continued."After two months, if the state finds out that they did not qualify for Medicaid, they will be taken off of Medicaid. But the state still has to pay for that two months, and that is two months of tests and services that we did not have budgeted.

"Now that the new reg has come, I'm in a very difficult position on what decision to make. We've checked the constitutionality of it, and our lawyers say the administration has every right to do what they're doing, even based upon the Supreme Court ruling. That comes as a surprise to me," said McCrory.

Federal Medicaid spokeswoman Emma Sandoe explained that the rule doesn't actually open the doors to Medicaid expansion.  

"There’s a long-running statute in Medicaid that a state can do what’s called presumptive eligibility – that means, if someone is presumed to be eligible, they can enroll," Sandoe said. "Originally, it was for women and children. In July, we released a regulation that extends this to newly eligible people under the Affordable Care Act. It also says hospitals can make that determination." 

"States' eligibility rules govern this," she explained, "and hospitals aren't required to do it." 

North Carolina's eligibility requirements have not changed, so presumptive eligibility would cover only those groups currently eligible for Medicaid: women, children, the elderly and the disabled. 

Asked for clarification, McCrory spokesman Ryan Tronovitch said, "The governor was specifically referring to the expansion of the Medicaid budget. The troubling aspect of the rule is that, if a hospital incorrectly signs up a person for Medicaid benefits who is not eligible, the state cannot recoup those funds spent during the presumed eligibility time period. This cost could be a significant budget variable."