McCrory: Medicaid needs to serve whole patient

Posted April 3, 2013

— Saying North Carolina's Medicaid program is too complex and inconsistent, Gov. Pat McCrory on Wednesday unveiled plans to reform the costly health plan for low-income and disabled state residents.

McCrory said the Partnership for a Healthy North Carolina would provide more comprehensive care, improved customer service and a more predictable cost structure by using private service providers.

"Right now, the system does not treat the whole person. It separates physical health from mental health and even substance abuse," he said. "People can't get better. They can't break the cycle of illness or addiction, and that's costing a lot of money and is not serving patients."

Health and Human Services Secretary Aldona Wos said a system of "comprehensive care entities" would be built statewide by July 2015 to create a single entry point for patients and that information technology and billing systems would be consolidated to better handle administrative costs.

A recent state audit determined that North Carolina spends $180 million more on Medicaid administration than the average of eight other similar-sized states because of "structural flaws" and mismanagement.

Medicaid as a whole has been drowning in red ink in recent years. Lawmakers approved a $206 million bailout last year, and McCrory last month asked state agencies to limit spending so he could shift as much as $262 million to cover another shortfall.

"This is not a budget exercise," Wos said of the reform effort, noting that the ultimate goal isn't to trim Medicaid spending. Still, she said, savings would come from the overhaul.

"We have a system that doesn't meet the needs of the patient, that doesn't meet the needs of the taxpayer," she said.

Department of Health and Human Services, DHHS generic More reform planned for NC Medicaid program

McCrory makes Medicaid announcement McCrory makes Medicaid announcement

The state will hold a competitive bidding process for the three or four comprehensive care entities, she said, and they would be paid a set amount per enrollee each month. The organizations would have to absorb any cost overruns.

"It makes the comprehensive care entity ultimately responsible for the outcomes and for managing their own risk," Wos said.

"This is the first step to privatizing Medicaid in North Carolina," said Adam Linker, a policy analyst with the Health Access Coalition in the left-leaning North Carolina Justice Center.

Linker said the state should learn from its past mistake of trying to privatize the mental health system.

"That was a disaster with cost problems, accountability problems and people falling through the cracks," he said.

McCrory said he has already contacted U.S. Health and Human Secretary Kathleen Sebelius about getting  approval for the reforms since the federal government pays for the bulk of Medicaid services. Wos also met with more than 20 lawmakers early Wednesday to begin drafting legislation covering the changes.

"We'll take it under serious advisement along with the Senate, and hopefully, we can come to something we can support as well," House Speaker Thom Tillis said.

The governor predicted a bruising battle in the General Assembly, noting some providers and special-interest groups aren't interested in changing the Medicaid system.

The North Carolina Medical Society quickly questioned McCrory's plan.

"If the administration’s idea of reform is bringing in out-of-state corporations so they can profit by limiting North Carolina patients’ access to health care and cutting critical medical services to our state’s most vulnerable citizens, that is not change we can support," Robert Seligson, chief executive of the doctors group, said in a statement.

Seligson noted that the public-private Community Care of North Carolina, which coordinates patient care for Medicaid patients with chronic conditions and has a three-year contract with the state, already handles many of the issues McCrory is addressing and won a national award Wednesday for its operations.

CCNC spokesman Paul Mahoney said the organization is a national model for its "proven ability to enhance health care quality while restraining costs."

"We believe we have much to offer our state as it seeks to improve the quality and efficiency of its Medicaid program," Mahoney said in a statement.

Democrats also criticized McCrory, more for his recent decision not to expand Medicaid under the federal Affordable Care Act than for his reform plans.

"The governor’s plan is a small step compared to the opportunity he had earlier this year to expand Medicaid to 500,000 North Carolinians," House Minority Leader Larry Hall said in statement. "Medicaid expansion would have created 25,000 new jobs and protected rural hospitals. It is simply the right thing to do."

"We support a holistic approach to health care, but are we really going to go back to the private managed-care system that failed in the '90s?" Senate Minority Leader Martin Nesbitt said.


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  • noel Apr 4, 2013

    rebelbelle - Suggestion: Get Kaiser Permanente in to run the Medicaid system--don't reinvent the wheel! I've been a patient under Kaiser--you get good care, but you HAVE TO go through your primary physician. If we did that, we'd see better health at a lower cost.

    Kaiser WAS here years ago. There also have been restrictions on ER care in the past based on diagnosis. Then "poof" they were gone. Nothing to restrict services sticks in NC because there is constant litigation and so far nobody with enough gumption to say no. I actually overheard someone say they moved to NC because the Medicaid paid for more than in NY!

  • noel Apr 4, 2013

    Remember Kaiser coverage of Medicaid recipients? Wonder why that didn't work? I'm sure Kaiser couldn't wait to get out. I see an even bigger mess down the line. As previously stated the bottom line with private companies is profit. When there's no profit recipients what's going to happen? I don't think they'll be interested in sticking around. I don't disagree that changes are needed, but not sure dumping the problem onto private companies and dealing with the ensuing complaints and litigation will be the answer. And beleive me there will be complaints because everyone knows Medicaid patients should have it all. Also, that miricle claims processing system that's supposed to save so much $. Sounds like they have lots of faith in that, right ;-)? Every time I see an article mentioning NC Medicaid I know it's going to include insanity somewhere. There's always some knee jerking and jumping going on by those with very little knowledge. I sure hope they get a grip soon.

  • goldenosprey Apr 4, 2013

    This is a war on the taxpayer by the Mcministration.

    From the third world - Rick Perry's Texas medicaid privatization netted huge profits for the Wall Street giants running it and left their already quaint system in rubble. $500 million later state employees had to clean it up. In Kentucky privatization caused a huge fight between the bean counters and the providers, and the private company sued to void its contract.
    In "Blue" New Joisey, Private medicaid operators enrolled lots of patients, then did what insurance companies do -deny claims. NJ got a tide of lawsuits for that screw-up.

    Private companies are there for the $, not for your benefit. Millionaire CEOs & shareholders make more when corners are cut and services are denied. State employees are not motivated that way. As long as we perpetuate the profit motive in health care delivery we will pay twice as much and get an inferior product.

  • NYtoNC81 Apr 4, 2013

    bljnnc2004: This would be a welcomed change. We have too many dinosaurs managing the current Medicaid system who are more worried about their own personal income and retirements than helping the actual people who need to service.

    Me: I agree that the system was broken and I'm glad to see McCrory being proactive. But haha at the notion that any private corporation cares any more about helping actual people. They care about one thing and thing only. The bottom line.

  • cwmllc1952 Apr 4, 2013

    Fracking--- Big Business------McCrory
    Partnership for Healthy NC----------Big Business----McCrory
    This Govenor is in it for himself and his friends. Tax Payers will be glad to see him go before it is over. That's 2 in a row for NC Govenors.

  • junkmail5 Apr 4, 2013

    He did promise open exchanges but less than half of the states will participate in helping set them up..Obama administration has no contingency plan to set them- lessismore

    See, more lies...


    "The exchanges will be ready Oct. 1 and neither congressional budgets nor the mandatory spending cuts that went into effect last week will change that, said Gary Cohen, director of the Center for Consumer Information and Insurance Oversight.

    "We will be opening all exchanges in all states," Cohen said.

    States that have not created their own exchanges will have those created by the federal government for them"

  • junkmail5 Apr 4, 2013

    junkmail5....the more you try to defend Obama the less intelligent you look... It's a fact insurance premiums are increasing faster since Obama Care was passed- lessismore

    You'd have a better point if everything you said wasn't a lie.


    See that chart? Rates were increasing faster 2001->2002 than they did 2010->2011 (when Obamacare passed).

    Further, the rate increase rate then DROPPED 2011->2012 to the lowest increase in YEARS-

    It's predicted that by the end of 2013 premiums will be between 35-50% higher.- lessismore

    Again, not really.

    Some folks have GUESSED at that number. Other folks have guessed at a massively lower number.

    it's dishonest to accept the highest number while pretending all the lower ones don't exist.

    The 2nd link I gave predicts 6.3% in 2013. Less than the 2011 increase.

    Your "facts"...aren't.

  • lessismore Apr 4, 2013

    junkmail5.... what was the purpose of Obama Care, why was it passed? Why was it named the "Affordable Health Care Act"?

  • lessismore Apr 4, 2013

    junkmail5....the more you try to defend Obama the less intelligent you look... It's a fact insurance premiums are increasing faster since Obama Care was passed. It's predicted that by the end of 2013 premiums will be between 35-50% higher.... If you dispute that fact you are not open to any objective conversation. Follow your leader blindly....He did promise open exchanges but less than half of the states will participate in helping set them up..Obama administration has no contingency plan to set them, it's a failure program. Small companies are dropping employees from their insurance so these employees can't keep their insurance, they have to fend for themselves. Many full time employees have been reduced to part-time status, all because of Obama Care, and many more will lose their job completely. You can't dispute the facts....Obama Care is a failure, a train wreck, a jobs killing program.

  • junkmail5 Apr 4, 2013

    Obama Care was supposed to take care of all the problems in health care.- lessismore

    No, it wasn't.

    It'd help the discussion if you didn't make up things nobody ever claimed.

    Obama promised you could keep your insurance if you liked it...that was a lie- lessismore

    No it's not. I'm keeping mine for example. Quite a lot of plans are considered grandfathered under Obamacare.

    Again, try the truth sometime.

    Obama promised open exchanges and you could choose the plan you liked....that was a lie. - lessismore

    Again, you're the liar here... the exchanges don't even EXIST yet and you're telling us how they work and what choices they will offer?