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Deep differences between lawmakers remain on how to revamp the $13 billion program.

By Hyun Namkoong

If the end of last year’s legislative session is any indicator, differing opinions on how to update and revise the state’s Medicaid program will continue to divide the House and Senate during this year’s long session.

Sharp differences between the House and Senate on how to reform Medicaid delayed the end of last year’s session, and committee meetings and subsequent events have underscored that differences persist.

Gov. Pat McCrory came into office in 2013 vowing to fix Medicaid, which covers health care for close to 1.8 million low-income children, their parents, seniors and people with disabilities. Medicaid had been subject to budget overruns and administrative problems for a number of years. Since then, lawmakers and state health officials have been debating how the program should evolve.

Rep. Nelson Dollar (R-Cary), who serves on the Joint Legislative Oversight Committee on Health and Human Services, said he believes that forming Medicaid accountable care organizations are the way to move into the future.

In an ACO, providers coordinate to manage care and are reimbursed based on the quality of care they provide. In a traditional fee-for-service form of reimbursement, providers are paid for the number of services they provide.

McCrory and Department of Health and Human Services Sec. Aldona Wos also have endorsed the use of ACOs to deliver services.

Dollar said he believes ACOs give the state the best opportunity to both set up incentives in the system to change how health care is paid for and provide a higher quality of care.

“We don’t believe bringing an insurance company in between a doctor and their patient is what is necessary to achieve the budget and quality-care goals we have for the Medicaid system,” Dollar said.

But during committee meetings this fall, Senate leaders endorsed opening the door to commercial managed care organizations. Sen. Ralph Hise (R-Spruce Pine) said the Senate’s position on Medicaid has been clear.

“We’ve passed legislation on reform that’s gone over to the House and wasn’t taken up in the last session,” Hise said in December. “You’ll see that our recommendations still fit for the most part with what was passed by the Senate [this summer].”

In order for any Medicaid plan to advance, both chambers will have to approve it. But last summer, Senate leaders declined to put ACOs to a vote in their chamber.

Multiple calls and requests to Senate leader Phil Berger’s office for comment were unanswered.

Finding the middle ground between the House and Senate will likely not be easy. Dollar said there are a number of things that unite the House and Senate, but that the difference lies in the methodologies of how to move the system to capitation.

According to DHHS spokesman Kevin Howell, DHHS supports the ACO model because it puts patients first by focusing on better health outcomes.

The House and Senate also differ on whether or not to move administration of the Medicaid program out of DHHS. Currently, the Division of Medical Assistance, which is within DHHS, manages Medicaid. But Senate leaders have expressed interest in creating a separate cabinet-level department to run the program.

McCrory and Wos have stated their opposition to such a move and argue that changes they have initiated in Medicaid are making the program more stable.

“The issues facing Medicaid are well-documented and longstanding,” wrote Howell in an email. “Over the past two years, DHHS has been on a path toward a sustainable department and we have built the foundation for a stronger Medicaid program. This is evidenced by the Medicaid budget ending the last fiscal year in the best shape it’s been in the past five years.”

Medicaid expansion

Last week, McCrory and a group of other members of the National Governors Association met with President Obama in Washington, D.C. to discuss ways to move forward with looming issues such as Medicaid, energy and infrastructure in the remaining two years of the Obama administration.

“I stressed to President Obama that as we continue to consider reforming Medicaid, we want a North Carolina plan, not a Washington plan,” McCrory said, according to a press release.

McCrory told reporters last week that he’s interested in a waiver for the state that would require employment or participation in a job-training program as a condition of Medicaid eligibility, but further details remain scarce.

Several other states have proposed similar plans for Medicaid expansion; none have yet received approval from federal officials to move forward.

The statements by McCrory come amid growing calls to expand the Medicaid program and the recent release of a study showing how the state would benefit economically from expanding the program.

Dollar said he would have to see what the plan would be for expanding Medicaid, but that he is focused on reforming the program first. He also said that it’s important for the General Assembly to wait for an upcoming Supreme Court decision before moving on Medicaid expansion.

The high court will hear the King v. Burwell case in March and is expected to release a decision on the case in late June. At the heart of King v. Burwell is the legality of tax credits for people who bought plans in the 34 states that declined to create their own health insurance exchange as allowed for under the Affordable Care Act.

Any ruling would not affect states that set up their own health insurance exchanges. But if the court rules those tax credits are invalid, it could seriously undermine the entire Affordable Care Act.

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Hyun Namkoong

Hyun graduated from the UNC-Chapel Hill Gillings Global School of Public Health in the health behavior department and she worked as the NC Health News intern from Jan-Aug 2014.

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