After months of work, lawmakers present committee recommendations for reforming North Carolina’s Medicaid program.
By Rose Hoban
Around the fire, campers have been known to chant the line, “Second verse, same as the first, a little bit louder, a little bit worse” between verses of a song.
It seemed on Tuesday that legislators at the General Assembly could have said the same thing when it came to Medicaid.
They certainly weren’t singing “Kumbaya.”
That’s because, after months of talking, another legislative subcommittee came to what looks like a familiar place, a standoff on how to proceed in reforming the state’s Medicaid system.[pullquote_right]NCHN is be part of the IndyWeek’s annual Give!Guide. Please consider an end-of-year gift[/pullquote_right]The fault lines fell in recognizable patterns, with many committee members from the House of Representatives expressing preference for a go-slow approach that builds on the existing system that relies on patient-centered medical homes to deliver care while shifting more financial risk to doctor groups and hospitals.
“I have issues with the strings we’re going to pull,” said Rep. Marilyn Avila (R-Raleigh). “We haven’t been on this track for long enough to know if the medical home model that North Carolina’s got – with some improved oversight and measurable goals – if it can do the job without tearing the whole system apart and putting it back together, and then find out, ‘Whoops, sorry, that’s not gonna work in four years, and we’ve got to do something new.’”
However, key members of the Senate appeared to favor a more aggressive transformation that would move all the financial risk to providers. The Senate’s plan would open the door to commercial managed care organizations, as well as using newer accountable care organizations. And that could all happen in as soon as three years.
“We have exhausted most of the manners of cutting the Medicaid budget that remain,” said Sen. Ralph Hise (R-Spruce Pine).
The positions taken in the meeting are familiar to people who’ve been watching this process for the past year. They strongly echo the differences between the two chambers over Medicaid that delayed the end of this summer’s legislative session.
Rep. Nelson Dollar (R-Cary) has long championed the state’s current Medicaid delivery system run by the independent organization Community Care of North Carolina. CCNC pioneered the medical home model that some studies show has saved the state money.
CCNC and the Medicaid budget are currently being examined by the state auditor’s office.
Dollar picked apart the provisions of the committee report, outlining his objections to each of the bullet points. One of those points was achieving transformation of the system within three years.
“We can go a long way in three years; there’s no question about that. We need to have a reasonable time frame,” Dollar said. “But I haven’t seen any comparable state to North Carolina achieve that ambitious a goal with 100 percent of their Medicaid population.”
Other committee members expressed concern over the timetable, as did Medicaid head Robin Cummings.
The final committee report included language softening the three-year goal, as well as additional language to add patient satisfaction targets to the list of goals that must be met in any reform plan.
Hise said his position on reform comes from forecasts that show state Medicaid expenditures growing faster than state revenue.
“If we continue to allow that to happen, there’s going to be more and more pressure to eliminate populations, to cut services out and to reduce Medicaid in the state to make it more in line with the states that surround us,” he told reporters after the committee meeting.
Hise has also argued that commercial managed care companies should be allowed to be part of any Medicaid reform. And he has maintained that providers should eventually bear all the risk for patient care; in other words, providers would get a set payment and they’d have to meet quality guidelines while staying within that budget.
But Gov. Pat McCrory, Department of Health and Human Services Sec. Aldona Wos and members of the House have thrown their weight behind a plan presented this past spring that would incentivize providers to form accountable care organizations.
In an ACO, providers group together and are reimbursed based, in part, on the quality of the care provided to patients. ACOs bear some amount of financial accountability for that quality and how well patients do. The ACO absorbs any losses and also can retain savings it achieves.
Providers have slowly accepted that they’ll be bearing more and more of the financial risks of providing care, said Chip Baggett, who represents the North Carolina Medical Society at the legislature. To that end, the Medical Society has been preparing its members for a transition to accountable care.
“We’ve been working on an initiative called Toward Accountable Care, and it’s helping our doctors move from a fee-for-service system program to a value-driven system,” Baggett said.
“That has driven all of our conversations with the legislature in the changes that they’ve been asking to make so that the focus for our doctors is not on the cost of doing business, but is on the patient and the patient outcome.”
Baggett also maintained that when health care reform efforts focus solely on saving money, “They fail, over and over.”
Proponents of moving to an accountable care system say that organizing care this way could save the state enough money to satisfy the Senate.
But Hise said he believes there are other options.
“There’s a lot more people coming to the table,” Hise said. “There’s a lot of industry out – whether it’s those who are supporting the ACO model or those who are supporting the [managed care] model – that are having a lot of conversations with members about how they can provide services in the state.”