NC Medicaid Reform Explained in 2 Minutes

>>_damoiselle_pills-wtfBY SARA LANG

I’m no expert on health insurance. Each time I go to the doctor I struggle to understand the myriad rules governing co-pays, out-of-network visits, and deductibles. It just makes my head swim.

Naturally, the idea of changing the way that 1.8 million North Carolinians receive their health care is completely overwhelming to me. But that’s just what the General Assembly wants to do by reforming Medicaid. Despite having a nationally recognized system for managing Medicaid patients, legislators are now considering building an entirely new system from the ground-up.

North Carolina legislators are anxious to find ways to save money and improve budgeting for the $13 billion plan. And they’re not alone.

Constrained by requirements to balance their budgets, >>many states are changing the ways they pay doctors for Medicaid services and deliver care to patients.

There’s no consensus on any one way that works or saves money. But many agree that North Carolina’s Community Care is a leader nationwide in saving money and providing high quality patient care.

Last October, North Carolina legislators heard from Medicaid directors in Ohio, Florida, and Virginia. While the focus was on their various approaches to reform, >>there were some kind words for North Carolina’s current system, Community Care of North Carolina (CCNC) and its patient-centered medical home model.

Ohio plans to copy North Carolina’s current system and move 80% of its patients statewide into medical homes. Virginia’s director, Cindi Jones, said that if the state were building a system from scratch, “We probably would be similar to North Carolina.” That praise is not isolated. Last year >>Arkansas selected CCNC to create a “Community Care of Arkansas” run by physicians there.

Some members of the General Assembly remain unconvinced of Community Care’s value. The decision has come down to two options: (1) allowing CCNC to build accountable care organizations (ACOs), where doctors are paid based on the quality of care they provide; or (2) bringing in private insurance companies, also known as managed care organizations (MCOs), to replace CCNC.

>>The battle lines are drawn in this dispute, with the House of Representatives and Governor McCrory favoring option one, accountable care organizations, and the Senate advocating for option two, the more aggressive managed care organizations.

MCOs have been used in many states, with varying degrees of success. These companies generally guarantee a set amount of savings for the state, but there have been some horror stories.

>>Kentucky’s system has been riddled with problems since its conversion to managed care in 2011. Some patients, especially in rural areas, haven’t been able to get access to care. Providers have complained about slow or non-existent payment. Doctors and patients have seen care denied, and lawsuits have riddled the system. One MCO even pulled out of Kentucky amid massive losses.

What will North Carolina’s legislators do? Will they build on the success of a homegrown solution? Or will they take a gamble on insurance companies and their promised savings?

As the General Assembly gets to work, the future of Medicaid is still very unclear. Here’s hoping some folks in the Legislative Building know a lot more about health care and insurance than I do.

>>Sara LangSara Lang has worked in North Carolina politics at the state, federal and local levels for more than nearly 15 years. A communications consultant, she lives in Cary with her husband, two young children and pampered dog.


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  1. Representative Verla insko

    There is a third option Republicans are touting as a compromise. They will introduce the concept this session probably in a Senate bill; although a House Republican may also introduce it – most likely Rep. Justin Burr. It transfers the entire Division of Medical Assistance (DMA or Medicaid) to an independent board of directors housed within the NC Department of Health and Human Services. The Board would be appointed 1/3 each by the Governor, the Senate and the House. The first draft of the bill got some push back from the Joint Oversight Committee on Program Evaluation because the board members represented health care administrators and financial experts to the exclusion of patient advocates. The board would have the authority to set rates and eliminate optional services to stay within the set budget. They would also set their own annual salaries to be capped at no higher than the NC Secretary of State. NC House Democrats, along with most House Republicans, oppose this option and support building on the successful CCNC program we have and moving to an Accountable Care Organization approach that also involves a capitated Medicaid budget. This would meet the goal of having a predictable Medicaid budget without turning the system over to an organization that excludes both patients and providers.

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