Health & Family

July 4, 2014

NC legislators battle over plans to trim Medicaid spending

Health care providers don’t want commercial managed care, which they say will lead to poor outcomes.

When Gov. Pat McCrory and his health and human services team first announced their planned Medicaid overhaul last year, they described the beginnings of a sweeping managed-care plan. But after months of resistance from doctors, hospitals and the rest of the state’s health care industry, the administration decided to go in another direction.

Hugh Tilson, executive vice president at the N.C Hospital Association, said the group told state administrators it was absolutely opposed to managed care for Medicaid. Managed-care companies would take a percentage off the top for administration, profit and marketing, he said.

“That’s money that’s not available to pay for care for people that really need it,” Tilson said.

Health care providers in the state have embraced arrangements called Accountable Care Organizations, which would reward doctors and hospitals in the provider-run networks for meeting patient health goals while saving money. The organizations would pay the price if they missed targets.

But the decision doesn’t rest with them, or with McCrory. Legislators get the final call, and they’ve been pushing different plans.

By 2020, a House proposal would make the providers responsible for all Medicaid overruns for care of the patients they enroll. It would gradually put much more responsibility on providers for controlling costs, and it’s a change that the McCrory administration now supports. Hospitals and doctors are going along with it too, but they’re nervous.

The House specifies such networks would be “provider-led” and be based on the Community Care of North Carolina networks now operating statewide. Details of the House plan are sketchy, and the proposal leaves it up to the state Department of Health and Human Services to fill in the details.

Senate leaders have made it clear that the networks should oversee all types of care, including physical, mental, dental, and long-term care. And Senate leaders say it’s important to have a new entity separate from DHHS set up the new system, which could include private managed-care companies.

North Carolina doctors dread the idea of commercial managed care taking over Medicaid.

Dr. William Dennis, president of the N.C. Academy of Family Physicians, worries that doctors will no longer see Medicaid patients if insurance companies reduce payments to providers.

“The Academy of Family Physicians and me personally just don’t think that’s the way to go,” he said. To make a profit, he said, companies cut services, require doctors to get permission for more services “and make it generally more difficult to take care of Medicaid patients.”

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