Medicaid transformation bill clears legislature; governor is expected to approve

Medicaid transformation bill clears legislature; governor is expected to approve

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The Republican-controlled General Assembly sent to Democratic Gov. Roy Cooper a Medicaid transformation that he is expected to sign even though it lacks any form of Medicaid expansion.

The state House passed Senate Bill 808 by a 111-2 vote Thursday. The Senate approved by a 46-0 vote.

"Medicaid Transformation has been a goal for me since I arrived in the Senate," said Sen. Joyce Krawiec, R-Forsyth, and a primary co-sponsor of the bill.

"We have put so much effort into transforming Medicaid to help with budget certainty and better health outcomes. Our citizens served in the Medicaid system will have so many more opportunities to reserve better health care."

The House vote provides a veto-proof margin to allow for the transformation initiative that started in 2015 to begin on July 1, 2021.

The N.C. Department of Health and Human Services would have been required to make those payments if the initiative isn’t under way by July 1, 2021. The launch date is being delayed from Jan. 1, 2021, in the bill.

The penalty has been criticized by not only House and Senate Democrats, but also DHHS and N.C. Healthcare Association.

Dr, Mandy Cohen, the state’s health secretary, said during Cooper’s press conference Wednesday that “some of the concerns that we had in that bill had been taken out, which is good.”

“There are resources there for our department in order to continue our efforts to fight COVID-19. We’ll be looking at the final details before making our decision.”

Cooper has made one of his signature public-health initiatives urging the General Assembly to expand Medicaid coverage to between 450,000 and 650,000 North Carolinians.

The previous Medicaid transformation startup funding effort, contained in House Bill 555, was vetoed Aug. 30 by Cooper in large part because the bill did not contain any Medicaid expansion language.

Rep. Donny Lambeth, R-Forsyth, and a leading healthcare expert in the legislature, expressed confidence Thursday that Cooper plans to sign the bill.

“We were able to work in good faith with the governor’s staff and worked out all issues to both our satisfactions. All parties worked to resolve the date and penalty portion and we are satisfied.

“The positive part is all involved want to move forward with transformation,” Lambeth said. “This is a major step to move the state forward again.”

The NCHA approves of the changes, “but remains unsupportive of the new timeline for transformation given all the variables of the current situation,” said Cynthia Charles, the association’s vice president of communications and public relations.

The bill was amended to raise from $25 million to $125 million the amount of federal CARES Act funding toward “periodic testing for surveillance and occupational safety, and the hiring of temporary staff to augment contact tracing functions performed by local health departments.”

Another amendment provides $20 million to the N.C. Division of Childhood Development and Early Education toward “various childhood initiatives” in response to the COVID-19 pandemic.

State Rep. Josh Dobson, R-McDowell, said Monday that the inclusion of the monthly penalties if a delay occurred was to make sure that “we have to have a way to make sure that this goes forward. There’s been a commitment (for Medicaid transformation) by this General Assembly since 2015.”

However, on Wednesday, Dobson said that “with the requested additions and requested deletions from the Department of Health and Human Services, the bill received positive comments from both Democrats and Republicans and unanimous support in Rules.”

“I’m as confident as I can be that the bill will become law.”

The proposed monthly payment of $4 million would have gone to the four participating statewide prepaid health plan, PHP, selected to provide certain insurance services — Centene (operating as WellCare of N.C.), AmeriHealth Caritas N.C., Blue Cross and Blue Shield of North Carolina and UnitedHealth Group.

A prorated amount of $4 million would be provided monthly to any regional PHP, or up to $2 million.

State Sen. Ralph Hise, R-McDowell, said during the Senate floor debate that the PHPs “are losing in excess of $5 million a month” for the employees they brought online who are attempting to register individuals to select their plans.

The payment is designed “to compensate” the PHPs for revenue they were projected to earn.

Medicaid currently serves 2.22 million North Carolinians, or 21% of the state’s population. That number is projected to increase to 2.28 million by mid-2021 and 2.39 million in mid-2023.

About 1.6 million are scheduled to be enrolled in the new managed-care system under a federal waiver approved by the U.S. Centers of Medicare and Medicaid Services in October 2018.

Currently, providers are paid on a fee-for-service model administered by the DHHS.

By contrast, the proposed PHPs would pay health-care providers a set, or capitated, amount per month for each patient’s costs. The DHHS would reimburse the plans.

rcraver@wsjournal.com

336-727-7376

@rcraverWSJ

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