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NC Medicaid advisory panel takes public comment

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RALEIGH, N.C. -

Influential players in North Carolina's medical community lined up Wednesday behind a proposal that largely retains the current Medicaid payment method but shifts slightly the risk for cost overruns to providers.

The North Carolina Medical Society and North Carolina Hospital Association joined other advocates for medical professionals and consumers at a public hearing opposing a more dramatic overhaul through managed care pushed earlier by Gov. Pat McCrory's administration. They backed another cost-saving method gaining popularity for Medicare patient treatment.

"We cannot support Medicaid reform that puts Medicaid patients into corporate managed-care plans," hospital association Executive Vice President Hugh Tilson told an advisory panel that will make Medicaid recommendations to the Department of Health and Human Services.

Support for putting Medicaid management in the hands of managed-care companies or entities was muted. DHHS will unveil its own plan in mid-March, but its original managed-care proposal has received generally negative reviews. The General Assembly will have the biggest say on what happens when it reconvenes in May.

The legislature and McCrory are trying to bring more certainty to Medicaid spending after repeated annual shortfalls that siphons away funds for education and other priorities. Medicaid is the federal-state health insurance program for the poor and disabled and serves 1.7 million people in North Carolina, costing $13 billion annually, of which $3.5 billion is paid by the state. Lawmakers aren't in agreement on a solution.

"There is no doubt that reforming our Medicaid system is vital to the long term sustainability of Medicaid itself and the long-term health of our state and the people of the state," DHHS Secretary Dr. Aldona Wos said at the hearing.

The department's original proposal envisioned a few managed-care entities provide services statewide. Medicaid would pay each organization a set price on each patient the network treated. State Medicaid spending would become more stable, according to supporters, with managed care companies eating cost overruns. A department consultant unveiled last month an alternative plan to divide the state into several regions where the state would enter into similar agreements.

Mark Trail, a consultant representing Medicaid managed-care provider WellPoint Inc., presented data to the panel showing North Carolina could save about $150 million annually by moving to a managed-care model. Trail is Georgia's former Medicaid director and WellPoint is one of three managed-care entities that offers Medicaid coverage in Georgia.

Georgia's managed-care contracts contained specific performance measures for the entities, leading to improved access to patient care, Trail said, which "have had a profound influence on service delivery in our state."

Other speakers criticized the managed-care concept, saying it would lead to more bureaucracy and managed-care providers keeping profits.

"It has been our experience that managed care ultimately always fails because it's a model that puts an administrator between the patient and the doctor," said Dr. Rosemary Fernandez Stein, who with her husband operates a physician practice in Alamance County that sees Medicaid patients.

Several speakers endorsed using what's called "accountable care organizations," comprised of small physician or hospital networks paid through the current fee-for-service system, in which they're reimbursed by Medicaid for each procedure they perform. But if the organization meets savings and treatment goals, it gets to keep a portion of the monetary savings it generated. If patient costs exceed standards, it must share losses with the state.

"Simply stated — no savings, no incentive," said Dr. Devdutta Sangvai of Durham, president of the N.C. Medical Society.

More than 20 accountable care organizations already operate in North Carolina. The federal health care overhaul law included language to accelerate their use for Medicare.

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