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N.C. Senate Lawmakers Unveil Details Of Medicaid Plan

North Carolina legislative building
Dave DeWitt
N.C. General Assembly

Lawmakers in the North Carolina Senate have proposed a plan that sheds more light on how they’d like to manage the state's Medicaid program. But it differs significantly from plans put forward by the House and by Governor Pat McCrory. The Senate’s proposal would allow hospital and doctor-led health plans to see Medicaid patients as well as managed care plans run by insurance companies.

It’s no surprise that lawmakers in the state Senate want to bring in managed care organizations to take care of Medicaid patients. They believe using such groups to treat the state’s low-income population will help decrease the Medicaid budget shortfalls that have bedeviled the state for years. But as Senator Ralph Hise explained this morning, the Senate’s proposal would require participating organizations to be up and running by 2018.

"I think you will find that our plan is a compressed schedule to what has been previously proposed, however it’s not inconsistent with what’s happened in other states. At this point you basically have a four year time window at which you expect the provider led plans to be fully capitated," said Hise.

The phrase “fully capitated” means that the managed care plans would then be assuming the full costs of treating Medicaid patients. Under such a scenario, the state would give those managed care groups the money to treat people, but then those organizations would figure out on their own how to manage the costs. The Senate proposal would also move the state Medicaid office to an entirely new department with a corporate-like board to oversee it, says Senator Hise.

"The model we looked to establish was corporate boards. We looked at boards like Blue Cross Blue Shield and the private sector and what compensation set. The ultimate concept is we are setting the initial compensation of the board, the board will set its compensation as it does in models all over the US."

This plan is pretty different from those put forth by Governor Pat McCrory and the state House. House lawmakers have proposed having provider-led networks with more limited risk treat Medicaid patients, which is closer to what Governor Pat McCrory and Secretary of Health and Human Services Aldona Wos want. McCrory and Wos have been working with doctor and hospital organizations for more than a year to essentially expand a home-grown, nationally recognized model for Medicaid delivery called Community Care of North Carolina. But Senate lawmakers say they’d like to follow another Southern state’s lead instead. This morning, Democratic Senator Floyd McKissick asked Senator Hise about that.

"I’ve heard you reference Florida a number of times. Is it the state in operation today the system that’s most closely analogous to what you’re proposing?"

Hise said it was.

"We have evidence that goes back to hospital-led plans being proposed in 2006. They have some history with it. We’ve had some conversations with Florida about what worked and what didn’t and I think we’re using that. But yes, Florida would be the most similar."

Nearly 350,000 Medicaid recipients in Florida have participated in experimental managed care programs since 2005. Half a million more joined the managed care model earlier this month. Many health care policy experts view the change with skepticism. So does Gregory Griggs, the Executive Vice President of the North Carolina Academy of Family Physicians.

"Florida’s not fully up and running. Florida’s losing people taking Medicaid, not gaining people, and it’s not statewide down there at this point. There may be pockets where things could work on that timeline, but not statewide," said Griggs.

Griggs says only half of doctors in Florida are taking Medicaid patients. North Carolina has a rate of almost 90%. Governor Pat McCrory has been very clear that he does not want North Carolina to pursue any kind of managed care model. Hospital and physicians’ organizations across the state don’t want that either. They say such models aren’t shown to produce the best care for patients, and that too much money ends up going into the pockets of the insurance companies that run the organizations. Griggs says the state Senate isn’t listening to what health care practicioners want:

"It ignored 16 months of hard work that we’ve all done to develop a plan that works for taxpayers, works for our most vulnerable citizens, and works for health care providers. This goes back to where we were 16 months ago and ignores that."

State Senators will return to a committee meeting tomorrow to discuss the proposal further.

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