RALEIGH, N.C. — The Senate's idea of Medicaid reform in North Carolina cleared a hurdle Thursday in the chamber despite redoubled opposition from several medical organizations and Gov. Pat McCrory's administration, which prefer a House plan.
A Senate committee recommended a measure that would shift Medicaid to a managed-care model in which hospital and doctor networks and private insurance companies receive only a fixed amount for each patient. The House only envisions networks led by medical providers covering regions of the state.
The Senate also wants to create a new state department led by a seven-member board that would oversee Medicaid. Senate Republicans say the House plan it approved earlier this month wouldn't save the state money quickly enough and keeps Medicaid under an unwieldy Department of Health and Human Services that's failed to keep Medicaid costs in check.
Physician and hospital groups don't want managed-care companies to enter North Carolina's Medicaid market, saying the outside companies will offer health care with diminishing quality and siphon Medicaid dollars away.
"The proposal is a significant blow to physicians who own small businesses, providing care across our state," said Gregory Griggs, representing the North Carolina Academy of Family Physicians.
Sen. Ralph Hise, R-Mitchell, an author of the Senate plan, said the bill requires at least one provider-led plan in each section of the state.
"Provider-led plans have the opportunity now to compete in the state of North Carolina and show us in this development how they provide better care for better costs, and have a priority in doing so," Hise told the Senate Rules Committee.
Jeff Myers, CEO of the Medicaid Health Plans of America, said the switch to Medicaid managed-care programs have led to "a noticeable increase in quality metrics for the poorest and the sickest" in other states.
The bill passed after a second day of hearings. The full Senate could vote on the plan next week as this year's session winds down.
The Senate plan also ramps-up the new model in mid-2016, well before the House's goal of paying for a majority of Medicaid recipients by the new method in mid-2020. DHHS lobbyist Adam Sholar told senators the proposed seven-member board could lead to lawsuits because four members would be controlled by legislative leaders.
The legsialtive control over an executive branch agency "is certainly ripe to a challenge in the future that could hamper the operation of the program and those that are served in the state," Sholar said.
Hise also defended the makeup of the proposed board for having no specific positions for medical providers who participate in the Medicaid program, saying it's designed to prevent conflicts of interest regarding setting payment rates.
The Senate plan also would demand integrated mental health and medical treatment of Medicaid recipients. They are currently separate, with government-paid mental health services being offered through public managed-care entities.
Mary Hooper with the North Carolina Council of Community Programs, representing the mental health managed-care organizations, asked senators to not destabilize a mental health program that is working. The organizations "are not causing cost overruns and they are fiscally responsible," Hooper said.