Old differences remain in Medicaid reform

by Mark Binker, WRAL, December 2, 2014.

Lawmakers have not bridged the disagreements that forced the General Assembly to abandon efforts last summer to reform the North Carolina's $14 billion Medicaid health insurance system for the poor and disabled.

A key oversight subcommittee offered a report Tuesday that sketches the broad strokes of a reform effort, but it failed to garner backing from all key players. Much as they were a few months ago, the key fault lines have to to with how quickly the state should move to a new system and whether the state should foster a network of home-grown accountable care organizations or open the door to out-of-state managed care companies.

Medicaid reform is a front-and-center issue for lawmakers because the system is often viewed as a culprit that soaks up funding that could go to other budget priorities, such as education. While there is general agreement that a reform effort could stem the growth of the Medicaid budget, there are divisions on what exactly that reform should look like.

"I find myself unable to support the proposed conclusions and policy recommendations," Rep. Nelson Dollar, R-Wake, said at the end of Tuesday's meeting of the Medicaid Reform Subcommittee, which approved a report to the legislature's Health and Human Services oversight panel.

The key difference between Dollar and the subcommittee's chairmen, Sen. Ralph Hise, R-Mitchell, and Rep. Justin Burr, R-Stanly, has to do with who will be responsible for managing costs within the system.

Dollar favors a model that would allow North Carolina doctors and hospitals to build accountable care organizations that would profit from ensuring that their patients are healthier. Such a system would likely be built on top of North Carolina's current Medicaid program, which uses a company called Community Care of North Carolina to help manage patients. By and large, this is the version of Medicaid reform favored by Gov. Pat McCrory.

Senate leaders have favored a much more aggressive transformation that would move faster than envisioned by Dollar or the Governor's Office and make use of managed care companies, most from out-of-state. Although the report drafted by the subcommittee suggests making use of accountable care organizations, or ACOs, Hise made clear that bigger insurance players would likely have a role.

"We're clear on our direction," Hise said of the Senate leadership's perspective on Medicaid reform.

For anyone who has been watching this debate over the past two years, these positions are nothing new. Hise said there are more players taking an interest in the reform effort but agreed lawmakers might be picking up the reform discussion where they left it this summer, when disagreements were so deep that lawmakers scuttled plans for a late-year session to tackle reform.

In particular, senators are aiming for a Medicaid system that would require little management from the General Assembly. While the House plan moves toward health care providers and insurers assuming "full risk" for cost overruns, it does not move that way as quickly.

While the Senate's leadership is likely to be much the same as it has been the past two years, the House is in flux. Speaker Thom Tillis won his race for U.S. Senate, and Republicans have nominated Rep. Tim Moore, R-Cleveland, to take over the chamber's top spot. It's unclear how Moore will arrange his leadership team and whether Dollar will once again be the chamber's leader on Medicaid or whether someone like Burr, who is more sympathetic to the Senate's position, will take on that role.

"Medicaid is very complicated. There is no easy fix," said Robin Cummings, director of the state's Medicaid program.

Speaking to the committee, Cummings said that the timeline proposed by the subcommittee's report may be too quick for accountable care organizations to realistically take hold. He also pointed out that changes already underway have helped better predict the costs involved in Medicaid and begun to slow the growth of the system.

"You need to build on what you have in place," he said.

Hise said that he had talked to accountable care groups that believed they could take on the full risk burden in less than two years, and he pointed to figures that suggest, no matter what the state does under the current system, costs will continue to grow by 6.5 percent a year. Without a major change, he said, Medicaid would continue to take up funding from other programs, such as public schools.

The subcommittee did not tackle two of the other big questions in the Medicaid debate. Another committee has been looking at whether the Department of Health and Human Services should continue running Medicaid or whether it should be moved to a new independent authority board.

Neither committee appears to have considered whether the state should expand the Medicaid program to include more people as allowed by the federal Affordable Care Act. That option, which could bring more federal money to the state but could increase state costs in the future, is not popular with the committee's leaders.

"It would be impossible for us to expand Medicaid at this point," Hise said.

http://www.wral.com/old-differences-between-nc-lawmakers-over-medicaid-remain/14237530/