Hospital association unveils Medicaid proposal

| May 18, 2015

medicaidby Richard Craver, Winston-Salem Journal, May 17, 2015.

The N.C. Hospital Association is wading into the debate about state Medicaid reform, predictably encouraging a provider-led format to address the risk involved in the $14 billion program.

At the request of legislative leaders, the advocacy group Thursday offered recommendations and submitted a draft bill. The proposed legislation likely would require being inserted into an existing bill, potentially the state budget, to move forward this session.

The Medicaid program covers about 1.9 million North Carolinians. It has had a nearly $2 billion financing gap since the start of the 2009-10 fiscal year.

Two House and two Senate Medicaid reform bills have failed so far to gain a ground-swelling of support.

The association’s proposal would attempt to “modernize and stabilize” the program through a “whole person” strategy of coordinating physical, behavioral, dental, pharmacy and long-term health services.

North Carolina legislators should aim for a hybrid strategy — blending affordable care organizations with private providers — in their next attempt at Medicaid reform, a Wake Forest University…

Provider-led entities (PLE), such as health-care systems, hospitals and physician groups, would take the risk of Medicaid enrollees’ use of services through a capitated, or fixed-fee per individual, payment format. The current system is based primarily on a fee-for-service format.

The PLEs would have the ability to provide services regionally and statewide.

“These entities would have a vested financial interest in delivering efficient care for Medicaid enrollees,” the association said in its proposal.

“Unlike insurance companies rooted in a financial model of managing care, provider-led entities would put higher quality care first, which not only lowers costs, but produces better health outcomes.”

Although the association said PLEs “should provide, at a minimum, the same benefits package currently provided by (the state’s) Medicaid program, benefit design should incentivize enrollees’ personal responsibility for their health.”

Medicaid reform arguably is the biggest sticking point between state Republican leaders and Gov. Pat McCrory. The governor declared from day one of his term that the program is broken, though some health-care advocates dispute that assessment.

Senate leaders tout privatization, including hiring out-of-state, for-profit insurers operating as managed care organizations (MCOs), as the best way to fix it.

Meanwhile, House leaders, health Secretary Dr. Aldona Wos and McCrory prefer the accountable care organization (ACO) model with existing in-state providers and health-care systems leading the way.

The association’s proposal would require integrating care with physical, behavioral-health and long-term service providers. That includes behavioral health MCOs, such as CenterPoint Human Services and Partners Behavioral Health Management which serve the Triad and Northwest N.C.

Capitated payments for physical health would begin within three years of PLEs getting federal Centers of Medicare and Medicaid Services approval. It would start within five years for behavioral health, long-term ser, pharmacy and dental.

Beneficiaries would be allowed to choose a PLE each plan year, or be assigned. Individual providers can choose to serve any PLE.

The association recommends that any PLE have a governing board with physicians providing clinical services representing the majority of the board. It also recommends aligning incentives with performance and a strong commitment to standard public reporting of cost, quality and patient satisfaction performance metrics.

The providers could work with corporate partners to help make the capitated format work, as long as the providers maintain majority ownership and control.

“Novant Health understands the state’s need for budget certainty and participated in presenting a provider-led solution to Medicaid reform in North Carolina,” the health-care system said in a statement Friday.

“We believe providers are best positioned to succeed in managing this population. We are on the front lines of delivering care every day and can draw from our coordinated care approaches to deliver quality care and lower healthcare costs.

“Novant supports a provider-led solution for Medicaid reform and is prepared to accept the financial risk associated with this proposal.”

A bill introduced by Rep. Donny Lambeth, R-Forsyth, embraces the hybrid strategy, but has limited details. Lambeth plans to expand on his reform strategy after the House state budget proposal is submitted.

“The (NCHA) proposal that was reviewed by our Medicaid reform work team was well done and in line with the provider-lead transformation that I have been advocating since I arrived in the General Assembly,” Lambeth said.

“A provider solution will place the full obligation and responsibility on providers from all aspects of the care givers to improve quality of care with an emphasis on access, while increasing the priorities on wellness and preventive care.”

Sen. Joyce Krawiec, R-Forsyth, said she plans to meet this week with doctors and health care experts this week to receive their input on this proposal and others.

“We all have the same objective: delivering high-quality health care to citizens served by Medicaid at a reasonable cost to the taxpayers,” Krawiec said.

“I believe progress is being made, and that we will reach a resolution to the health-care challenges we face and make

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