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Medicaid Overhaul Plan Only Needs Governor’s Signature


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After years of squabbling over the future look of North Carolina’s Medicaid plan, lawmakers finally have passed a bill.

By Rose Hoban

In a legislative session where it could be argued that most of the sharp words have been spoken behind closed doors, the General Assembly’s House of Representatives was the scene of some pointed exchanges Tuesday, as one leading Republican lawmaker picked apart a compromise Medicaid bill that had been negotiated by his own party.

After the final version of the Medicaid overhaul bill had been introduced on the floor of the House of Representatives by Rep. Donny Lambeth (R-Winston-Salem), Rep. Nelson Dollar (R-Cary) stood up to oppose it.

Adressing House Bill 372, which has been negotiated for months, Dollar decried what he called its “fundamental flaw,” namely, the introduction of managed care into North Carolina.

Rep. Nelson Dollar (R-Cary) broke ranks with fellow Republicans to oppose the Medicaid overhaul plan.

Rep. Nelson Dollar (R-Cary) broke ranks with fellow Republicans to oppose the Medicaid overhaul plan. Photo credit: Rose Hoban

“First, insurance HMOs have failed repeatedly in North Carolina. They were tried in the hospitals down in Mecklenburg County a couple of decades ago; they failed,” Dollar said. “They failed in the mental health system … and they also failed in the State Health Plan in the ’80s and the ’90s, every time, leaving problems for this state to fix.

“And I worry that may be the situation we face several years down the road.”

But Lambeth, who negotiated the months-long compromise with the Senate, argued that the bill was a good deal that retains a “focus on quality, access, patient satisfaction and budget predictability.”

“While this plan does not have all the aspects you might have preferred, it is a very good framework that resolves the reform conflict and moves North Carolina forward,” Lambeth said.

Gov. Pat McCrory has said he’ll sign the bill.

Middle man

The bill, which could be signed as early as Wednesday, allows for the introduction of three statewide for-profit managed care companies that will be tasked with providing three competing Medicaid plans, something members of the Senate pushed for. In addition, the bill allows for the establishment of as many as 10 locally run “provider-led entities” to operate in at least one of six newly designated regions across the state, and perhaps even statewide.

The idea is to have at least three insurance plans compete for Medicaid patients in each of the regions.

“The benefits will be the same all across the state regardless of whether it’s a commercial plan or a PLE plan,” Lambeth said.

But Dollar decried the introduction of those for-profit companies that become the intermediaries between the state, which provides the dollars for the program, and doctors, who deliver the care.

Did you know NC Health News is a non-profit? Last year, a third of our funding came from readers. Please consider a donation today!“If we want competition, let it be with the provider of the services,” he said. “Why more than double the administrative costs we are currently paying by adding middle men between doctors and patients? I just don’t see where the value is.”

He also pointed to problems other states – such as Virginia, Tennessee, Florida and South Carolina – have had with managed care companies.

“[South Carolina’s] General Assembly was looking at withholding money from the insurance HMOs because of poor quality of the care for their citizens,” Dollar said. “Do you hear complaints from patients here in North Carolina? It’s very rare.”

Dollar’s arguments were echoed by Democrats.

“I think there’s one thing the people of North Carolina need to know,” said Rep. Graig Meyer (D-Hillsborough). “If we put this plan into action, your taxpayer dollars are going to turn into profits for insurance companies based on their ability to limit and cut services to poor people.”

‘Good for providers’

While the 90-minute debate was dominated by members opposed to the bill, some Republicans argued in favor.

Rep. Josh Dobson (R-Nebo) headshot

Rep. Josh Dobson (R-Nebo) Photo courtesy NCGA

Rep. Josh Dobson (R-Nebo) said he supported the original House bill, primarily because he believes the state’s providers would have been the best to deliver good care to Medicaid patients. But as the Senate was adamant in its desire to introduce managed care to North Carolina, negotiators, including Dobson, developed this hybrid plan.

“After that compromise was reached … I made it a priority to make sure if that was the model, if that was the hybrid approach that we were going to take, that everything else in this bill had to be good for the providers,” Dobson said. “And it had to be good for the patients.”

“I believe … we’ve done that.”

Dobson pointed out that the bill protects Community Care of North Carolina, the organization that North Carolina has used to help coordinate care.

“In the Senate proposal, it was eliminated starting next year,” Dobson said. “This proposal at least allows them to operate through capitation and then it gives a plan for them to go forward and have a role to play after that.”

The compromise also retains the state’s publicly funded mental health managed care organizations, integrating them into the larger providers after six years. It excepts the so-called dual-eligibles who qualify for both Medicaid and Medicare, the program that pays for care for the elderly and disabled.

And dentistry is exempted from the managed care regimen, something that drew criticism, especially after Rep. Bert Jones (R-Reidsville), a dentist, got up to support the bill.

“You’re a dentist, I believe, and dentists are carved out of this package,” Rep. Verla Insko (D-Chapel Hill) said.

Rep. Joe Sam Queen (D-Waynesville) noted that others left out of the deal are about a half-million uninsured who would be covered if the state expanded Medicaid.

“It’s not reform, it’s regression,” he said. “There will not be better satisfaction, there will not be lower cost, there will not be better health care in rural areas.”

Unanswered questions

Though the House spent 90 minutes debating the Medicaid overhaul, on the other side of the building senators dispatched the bill in about five minutes; only two members of that chamber discussed the bill.

In the end, four other Republicans joined Dollar in voting against the bill, while one Democrat voted with the majority.

Passage of the bill initiates the process of changing North Carolina’s Medicaid program, but Bob Seligson from the North Carolina Medical Society said passage “is not the end of the Medicaid reform debate.”

“We will continue to work with our partners and the state’s leaders on the many decisions that lie ahead to enable the delivery of high-value medical care to our state’s most vulnerable citizens,” he said.

After the chamber emptied of lawmakers, Rep. Jean Farmer-Butterfield (D-Wilson) said she believes negotiators gave up too much.

“I think there are too many unanswered questions,” she said. “I think things need to be deliberate and thoughtful when you’re dealing with people’s lives.”

She said she’s been hearing from constituents who are Medicaid beneficiaries.

“‘What are you doing?’ ‘I thought we had a good system.’ ‘What will this do to me?’” These are among the comments Farmer-Butterfield said she’s been hearing.

“People want to know how it’s going to affect them. And when you can’t say – well, it’s difficult, because their lives depend on it.”

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