Senate moves ahead on Medicaid restructuring
Posted July 17, 2014
Raleigh, N.C. — Despite a chorus of protests, including the governor's, Senate leaders are moving ahead with a plan to restructure the state's Medicaid system.
The Senate plan, introduced Wednesday, would turn the state's Medicaid system over to non-state management - either managed care or provider-led accountable care organizations - which would accept a flat amount per patient in return for providing all of the behavioral, physical, specialized and other care for that patient.
Senate leaders said the so-called "capitated" plan would bring state Medicaid spending under control. But critics say the Senate proposal would send administrative dollars out of state to large commercial insurance networks, cut physician participation and dismantle the state's award-winning behavioral health network, Community Care of North Carolina.
At Thursday's hearing on House Bill 1181, only one person spoke in favor of it: Jeff Myers, representing the trade association of insurance plans that manage Medicaid care in 34 other states. He assured the panel that managed care delivers not only lower cost per patient but better care and better overall outcomes.
Greg Griggs, representing the North Carolina Academy of Family Physicians, disagreed, warning that forcing small practices to juggle the requirements of multiple private Medicaid management contractors would "bury" those doctors in a mountain of paperwork.
In North Carolina, Griggs said, 90 percent of primary care doctors accept Medicaid patients. In Florida, which is the model for the Senate proposal, about half of them do. He said the academy supports the reform plan backed by the House and Gov. Pat McCrory.
Mary Hooper, appearing on behalf of the state's current managed care system for behavioral health, warned that the Senate plan would "destabilize" that system.
"They are an example of successful public behavioral managed care. We respectfully request that you not take that system apart,” Hooper said.
Pam Kilpatrick with the Office of State Budget and Management advised the panel that the proposal's timeline for the near-immediate creation of a new Medicaid department outside the Department of Health and Human Services would be difficult to meet.
"Medicaid is complex," Kilpatrick said. "We would hope there could be time to plan a transition."
DHHS legislative liaison Adam Sholar spoke against taking Medicaid out of the agency, saying it would not serve the best interest of recipients of services. He also warned that putting an executive branch function under a board largely appointed by lawmakers violates the separation of powers, a constitutional issue that would be "ripe to a challenge in the future that could hamper the operation of the program.”
Ardis Watkins, legislative affairs director for the State Employees Association of North Carolina, also spoke against the bill, noting, as others did, the 16 months of work that has already gone into the Medicaid reform effort at DHHS.
"It feels like things are getting pushed through at the 11th hour that would turn all that on its head," Watkins said.
On Wednesday afternoon, McCrory also issued a statement of opposition to the measure.
Senate leaders were unmoved by the protests.
"We have listened to everyone," said bill sponsor Sen. Louis Pate, R-Wayne. “I think it’s time to move on and get this procedure over with.”
“I look forward to this being completed in the short session,” said Sen. Ralph Hise, R-Mitchell.
The Senate is expected to vote on the measure early next week.