NC Senate votes for Medicaid overhaul

by Lynn Bonner, News and Observer, July 24, 2014.

A major Medicaid overhaul that largely disregards the wishes of health care providers, the state House and Gov. Pat McCrory won overwhelming support in the state Senate on Thursday in a 28-17 vote.

The overhaul would introduce to the state commercial managed care for Medicaid patients, a move that doctors and hospitals are fighting. But after several years of overruns, legislators crave “budget predictability” for Medicaid. After a final, confirming vote of the Senate, the bill will move to the House, where members will agree to or reject it. Here’s a look at what was approved and what others want.

What the Senate bill would do:

Insurance companies would compete with managed care networks run by doctors, hospitals or other health care providers for Medicaid enrollees.

The managed care groups will be given a set sum of money for each patient enrolled in their plans. By 2018, the provider-led plans would lose money if their health care costs are higher than their allotted budgets.

The bill would also remove Medicaid from the control of the state Department of Health and Human Services and have a paid board of directors run the health insurance program, which now costs about $13 billion a year and covers 1.7 million low-income children, select parents, the elderly and disabled. The Medicaid director would work for the board.

Democrats’ amendments:

One adopted; to avoid conflicts of interest on the new board that would run Medicaid.

Two rejected; one to expand Medicaid and the other to put two Medicaid recipients on the governing board.

How the Senate bill differs from the House proposal:

The House has agreed to a system of regional managed care networks but wants to have only provider-led groups running them, barring commercial Medicaid managed care.

Rep. Nelson Dollar, a Cary Republican and sponsor of the House Medicaid overhaul proposal, said this week that he was not satisfied with the Senate vision because it has insurance companies managing Medicaid.

What the governor wants:

Though he is supporting the House proposal, which would have provider-led groups fully responsible for Medicaid overruns by 2020, McCrory initially favored a plan that would have providers form Accountable Care Organizations. Providers would have been paid as they are now, receiving a fee for each service.

ACOs keep part of the money if patient care costs less than predicted and lose some of the money if care costs more. To share in the medical savings, ACOs must also show patients are getting good care.

On Monday, McCrory was talking about Medicaid with doctors, nurses and administrators at Moses Cone Hospital in Greensboro. Moses Cone and area doctors run an ACO called Triad HealthCare Network that covers more than 7,000 people on Medicare.

Dr. Tom Wall, the network’s executive medicaid director, said those at the meeting told McCrory they wanted provider-led health care.

A provider-driven system “to manage Medicaid patients would be the most successful plan for North Carolina and our community,” Wall said.

Commercial Medicaid Managed Care opponents:

The N.C. Hospital Association and the N.C. Medical Society oppose the move to commercial managed care for Medicaid.

“Today the Senate had a clear choice between the health of our state’s most vulnerable citizens and the health of Wall Street corporations, and they chose the corporations,” N.C. Medical Society CEO Robert W. Seligson said in a statement Thursday. “Despite strong alternative proposals from the North Carolina House, Governor McCrory and the health care community on the best way to improve patient care and quality and provide budget predictability, senators voted against this consensus.”

http://www.newsobserver.com/2014/07/24/4027609/senate-votes-for-medicaid-overhaul.html?sp=/99/102/