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NC Medicaid road map approved by House committee

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Department of Health and Human Services Department of Health and Human Services
RALEIGH, N.C. -

House Republicans pressed ahead on Thursday with a plan to overhaul Medicaid spending in North Carolina that has received the backing of Gov. Pat McCrory's administration and at least one key medical group. But they'll still have to convince senators the plan is worth backing in the General Assembly session's final weeks.

The House Health and Human Services Committee approved a plan that would replace the current model to pay for services through Medicaid, the federal-state health insurance program serving 1.7 million mostly poor children, older adults and people with disabilities.

Doctors and hospitals now receive Medicaid reimbursements for each treatment or procedure.

The House plan envisions that by mid-2020 a majority of Medicaid patients would be served by medical providers who receive a fixed amount of money for each patient they treat as a way to control Medicaid costs. Their profit or loss is based on how well they care for the patient and keep the person healthy.

Hospitals and physicians would assemble health plan networks covering as many as 14 regions of the state and could partner with insurance companies to administer them, said Rep. Nelson Dollar, R-Wake, a primary sponsor of the bill.

Legislators have struggled with Medicaid shortfalls in the hundreds of millions of dollars in recent years, prompting lawmakers and McCrory to seek an overhaul. Medicaid spends more than $13 billion annually, of which about $4 billion is state money.

"We are looking to move away from fee-for-service to provide greater predictability to slow the rate of cost growth," Dollar told the committee, adding "we know this transition will take time to make sure we do it right."

No one on the committee voted against the plan, which is a spinoff of the "accountable care organization" proposal offered in March by the Department of Health and Human Services and received strong backing from the North Carolina Medical Society and N.C. Hospital Association. The groups liked the McCrory agency plan because it wouldn't permit managed-care companies or entities from taking over.

Health and Human Services Secretary Dr. Aldona Wos praised the House bill at the committee.

But Senate Republicans, who would have to agree to any overhaul, rejected McCrory's plan in its budget proposal three weeks ago and wants to embark on its own multiyear solution that included removing the Medicaid office out from under DHHS. Senate leader Phil Berger, R-Rockingham, said the House idea is an improvement but doesn't go far enough and takes six years to mature and find significant savings.

There are "some elements within it that look to be positive," Berger told reporters, but "they want to leave it up to DHHS to implement the reform."

The hospital association is on board with the House plan, group vice president Cody Hand said, in part because there's a slow rollout and it is drawn up so hospitals can keep receiving $1 billion in supplemental Medicaid payments annually.

"This bill sets a glide path for physicians and other providers to systematically transition to a new system of care delivery, and gives us time to make something like that work," said Chip Baggett, a lobbyist for the N.C. Medical Society, representing physicians.

But Baggett and representatives for patients with developmental disabilities or who serve that population said they didn't like an experimental provision in the bill. It would direct one of the state's public managed-care entities serving people with disabilities to receive a fixed per-patient amount to cover both physical and behavioral care.

The Senate may favor the experiment because it wants a plan with more whole-person treatment.

"I'm certainly hopeful the Senate will help move forward with (the House) reform," Dollar said.

Copyright 2014 The Associated Press. All rights reserved.

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