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Skepticism Grows On Medicaid Overhaul Rollout For February

North Carolina legislative building
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Skepticism grew on Wednesday that a massive change in administering North Carolina Medicaid's program will start as scheduled early next year as a state budget stalemate continues and doctors and hospitals worry whether details are ready.

The shift to managed care benefits for 1.6 million of the state's 2.2 million Medicaid recipients is supposed to begin Feb. 1, but final funding and details are hung up in a legislative showdown between Republican legislators and Democratic Gov. Roy Cooper. One rollout date for covering patients in one-quarter of the state's counties — previously set for Nov. 1 — already has been pushed back to the statewide date.

Speaking to House members during a hearing, Department of Health and Human Services Secretary Mandy Cohen expressed optimism that the "right budget" could still be hammered out before mid-November, which she describes as the deadline to go online in February.

"I know that there is a package there that can work for everyone," Cohen told the House Health Committee.

But a key Republican lawmaker on health care matters said a budget agreement was unlikely and suggested the start be pushed to next summer.

"I would advocate for some realistic review of this schedule and even considering pushing this off until July 1," Rep. Donny Lambeth of Forsyth County, the committee's co-chairman, told Cohen. "I just don't see that that's a realistic timeline with where we are today. And I know you don't want to do that. I know there's consequences of delays."

Rep. Verla Insko of Orange County, the Democrats' leading expert on Medicaid, said pushing back the rollout also sounded reasonable.

A lot is riding on the move, which Cohen called the biggest change to North Carolina Medicaid since it began decades ago. Failure would reflect poorly on both Cooper and GOP legislators. The transition to managed care began with a 2015 law.

Medicaid is moving from a traditional fee-for-service model to one in which four private insurers and a physicians' partnership awarded contracts by the state will receive fixed monthly payments for every patient seen. Health officials say the changes should lead to improved health outcomes and more fiscal stability for Medicaid, which spends about $4 billion in state tax dollars annually. The federal government covers an additional $12 billion.

The shift is a monumental effort that includes enrolling Medicaid recipients, setting payment rates, building and testing information technology systems and preparing counties who enroll beneficiaries and providers who treat them.

"This is really years of work in the making," Cohen said. "This is big and this is hard."

So far about 70,000 enrollees have chosen one of the statewide or regional coverage plans, and about 40% of the medical providers who have seen a Medicaid patient over the past year have entered into service contracts, said Dave Richard, a deputy secretary who leads the Medicaid program.

The potential delay surfaced when the governor vetoed the overall two-year budget bill in June that contained the transition funds to complete "Medicaid transformation." He cited in part the lack of Medicaid enrollment for hundreds of thousands of additional adults through the 2010 federal health care law.

Republicans are largely opposed to this Medicaid expansion, but they also lack veto-proof majorities in both chambers. Their disinterest in negotiations involving expansion contributed to the four-month impasse. GOP legislators approved a stand-alone bill in August addressing only the managed-care matters, but Cooper vetoed that too, saying health care needed to be addressed "comprehensively."

Cohen said any agreement also needs to ensure that $42 million in administrative cuts to DHHS in the vetoed budget are restored and that the department isn't forced to move out of Raleigh. The budget law had directed DHHS move its headquarters to Granville County.

Even should an agreement be reached in the next three weeks, representatives of trade groups for the state's hospitals and physicians raised warning flags about whether colleagues will be prepared by February for the exponentially complicated process.

"We're trying to guard against any kind of failure," said Chip Baggett, senior vice president at the North Carolina Medical Society.

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