The end of the beginning

by Tom Campbell, Executive Producer and Moderator, NC SPIN, January 7, 2016.

After more than three years of debate and several false starts the legislature passed and Governor McCrory signed into law a Medicaid Reform law in 2015. Legislators, lobbyists, regulators, the house of medicine and most everyone was relieved to bring this complicated issue to fruition.

The final product was a hybrid managed care model that includes both for-profit Managed Care Organizations (MCOs) as well as Provider Led Entities (PLEs) of hospitals, doctor groups and providers. As Greg Griggs, Executive VP of the NC Academy of Family Physicians, recently said, this was not the end of Medicaid reform debates, merely the end of the beginning of reform.

There were many voices involved, each with their own agenda. Lawmakers wanted more budget predictability, shifting risks of budget overruns from the state to others. Doctors and hospitals saw value in shifting from a fee-per-service model to having more voice in the health outcomes of patients. Insurers saw an opportunity for profit.

We remember well that after Congress passed the Affordable Care Act (Obamacare) many months were needed to work through thousands of policies, procedures, regulations and decisions not contained in the enabling legislation, all necessary for implementation. Expect much of the same with North Carolina’s Medicaid Reform.

The first and perhaps most crucial step, comes this month as The Department of Health and Human Services submits an application to the federal Centers for Medicare and Medicaid Services for federal approval of the state’s reform plan. Dave Richards, head of our state’s Medicaid program, feels confident we will get that approval, but also cautions it will be a lengthy process, possibly not occurring in 2016.

While working with the feds for approval there are hundreds of moving parts that must be resolved, including operating guidelines, determining how patients can be informed and choose between those managed care entities and providing sufficient oversight to ensure the rules are being properly followed, patients are getting proper care, records are updated and payments made on a timely basis.

The state will be divided into six or seven regions and PLEs can form and apply to provide Medicaid services at a capitated or fixed price per patient per month within those regions. There also will be three slots for statewide MCOs, with insurance companies and perhaps even PLEs bidding to provide the requisite services, again at a capitated price. Presumably the three victors will be those offering the lowest per-patient per month amount.

You can be sure that many interested parties will be at the table attempting to shape these policies and regulations. The legislation also requires that DHHS report to lawmakers as to progress and it is a certainty they will want a voice in these evolving reforms.

While there will be much activity behind the scenes don’t expect dramatic announcements or changes this year; it is quite possible that the new model won’t be ready to implement in the 2018 time frame envisioned by the enabling legislation.

These are big changes to a $14 billion program. We all remember the missteps and problems in rolling out Obamacare and we urge all to exercise patience and wisdom, insisting on getting it right over getting it done fast. True Medicaid reform in North Carolina is just beginning.