NC General Assembly building
Lawmakers return to Jones St. this week for the short legislative session. Photo credit Rose Hoban


Even as providers, members of the House and the governor object to the bill, senators move forward with a controversial plan to change the state’s Medicaid system.

By Rose Hoban

If a majority of members of the North Carolina Senate get their way, the state’s Medicaid program is up for big changes.

A bill that passed the Senate Thursday afternoon would speed up implementation of both provider-led plans and commercial managed care plans to compete to cover patients in Medicaid, the state and federally funded program that provides health care coverage for low-income children, pregnant women, low-income elderly and people with disabilities.

The bill would also carve the Division of Medical Assistance – which runs Medicaid – out of the Department of Health and Human Services and create a freestanding executive Department of Medical Benefits, which would be run by a seven-member board.

Sen. Louis Pate (R-Mt Olive) helped draft the Senate version of the Medicaid reform bill.
Sen. Louis Pate (R-Mt Olive) helped draft the Senate version of the Medicaid reform bill. Photo credit: Jasmin Singh

“In my short term of … being here, going on four years, and watching our shortfalls in Medicaid and not having the budget predictability, and watching DHHS be the only agency that we have, that I’m aware of, currently, in this state that a budget appears to mean nothing to, because it’s always overrun, and we have to fill in those black holes, I think this is a step in the right direction,” said Sen. Brent Jackson (R-Autryville) during the debate on the senate floor.

But the bill the Senate passed 28-17 Thursday afternoon has a difficult – some say impossible – path to getting through the rest of the legislative process in its current form. It still has to pass a final vote in the Senate, probably early next week.

“In just the past four years, this General Assembly has had to fill shortfalls totally nearly $2 billion,” said Sen. Louis Pate (R-Mount Olive), who helped write the Senate version of the bill. “That’s money that could have been invested in other priorities, such as education, infrastructure and public safety.”

However, during the debate, Sen. Harry Brown (R-Jacksonville) conceded that some of Medicaid’s budgetary problems were due to the General Assembly allocating too little money to the program in past years.

“In the recession, in particular, trying to put budgets together, we probably underfunded Medicaid, because it was the easiest piece to underfund,” he said. “And then you come back a year later and you say, ‘Wow, we’ve got a $300 million shortfall.’

“Well, we didn’t fund it right to start with. But it’s just growing at such a pace that it’s absolutely killed our budget.”

Two Republicans, Jeff Tarte (R-Cornelius) and Wesley Meredith (R-Fayetteville), voted against the bill, for the most part, however, the vote fell along party lines.

Rough road ahead

When asked if the Senate bill would be acceptable to House membership, Rep. Nelson Dollar (R-Cary), the main budget and Health and Human Services negotiator on the House side, answered with a terse, “No.”

rough roadGov. Pat McCrory has also indicated his disapproval of the Senate bill.

Dollar said on Wednesday that the bill would not stand a chance in the House as long as it included space for commercial managed care insurance companies to be part of the management structure for Medicaid.

“Our caucus is very solid, we have had a unanimous vote in the house for Medicaid reform, we have almost across the board support,” he said.

Dollar also helped author the original Medicaid reform bill, which would move the program to having health care providers bear more financial risk for Medicaid by establishing accountable care organizations in which networks of providers coordinate to manage patient care.

Under the ACO model, hospitals and doctor groups would be able to share in financial rewards if they save money and would face financial penalties if quality of care suffers or if care is too expensive.

“The private sector is already moving from volume to value,” Dollar said. “It’s already moving to outcome-based medical care, and our reform doesn’t need to go backwards to those managed care organizations. It needs to move forward with ACOs and working with the substantial reforms that are already going on in the health care marketplace.”

Some provider groups were pointed in their response to the Senate’s action.

“Despite strong alternative proposals from the North Carolina House, Governor McCrory and the health care community on the best way to improve patient care and quality and provide budget predictability, Senators voted against this consensus,” said North Carolina Medical Society head Robert Seligson in a press release.

“Today the Senate had a clear choice between the health of our state’s most vulnerable citizens and the health of Wall Street corporations, and they chose the corporations,” he said.

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