News: CJ Exclusives

McCrory’s Medicaid Team Pitching Reforms to Skeptical Public

Greensboro forum part of statewide effort to sell managed-care alternatives

State Department of Health and Human Services Secretary Aldona Wos elicited raucous applause Thursday when she announced that by July 1 the state would, “with a little growing pain,” have only one Medicaid billing system instead of many.

But the physicians, health care organizations, academics, and interested citizens gathered at the town hall meeting in the Old Guilford County Courthouse were equally boisterous opposing Wos’ advocacy of proposed free-market reforms to Medicaid.

Wos, state Medicaid Director Carol Steckel, and other DHHS officials are holding public input sessions around the state to introduce Partnership for a Healthy North Carolina. It is the program the McCrory administration has proposed to replace the Medicaid program operated mostly by the nonprofit Community Care of North Carolina, which has ardent supporters and strong critics.

Thursday’s unfiltered give-and-take spawned a few tense moments when audience members criticized Gov. Pat McCrory’s decision not to expand Medicaid rolls under Obamacare, and criticized use of for-profit companies in government-sponsored medicine.

But Wos was cheered when she said her department is pushing NC TRACKS “over the finish line with every resource we have” for a July 1 launch date.

NC TRACKS is the Internet-based portal through which medical providers will enroll Medicaid participants and consolidate claims processing. The process currently is a confusing hodgepodge of multiple options.

Wos debated at length with Walter Salinger, a psychology professor emeritus and former Faculty Senate chairman at UNC-Greensboro. He objected, to applause, to having three or four private comprehensive care entities that would offer competing, statewide health plans from which Medicaid recipients would choose.

Salinger said after the meeting he is “concerned about people who can’t afford medical care. It’s a humanitarian crisis.”

He said during the meeting that for-profit insurance companies already have made a mess of the health care system and would take a 20 percent profit if they run Medicaid. He did not cite a source for his number.

Without identifying who might be considered as a comprehensive care entity, Wos said there are “some pretty big contenders who could possibly step up to the plate that most of you are working with now.”

She expressed no concern about “mistakes of the past” when private managed care companies operated in ways not always in the interest of a state or patient.

“Those are things that are controllable when you set up a new system from the start,” she said.

Steckel said the department is exploring other states that use full-risk managed care. North Carolina can benefit from their experience by learning what worked and what didn’t.

Among aspects being examined is medical loss ratio, Steckel said. That is a measurement instrument that determines what percentage of each dollar a health plan provider may keep for administrative, marketing, salary costs, and profit. The state negotiates that and other plan components in developing a contract.

Wos said whether it’s an insurance company or a hot dog stand, “It has to make a profit or it will not exist.” The discussion is not about compensating a for-profit for fixing a broken system, but about how much that profit should be, and how it would be generated, she said.

“You’re paying more taxes every single year because it’s not manageable,” she told Salinger. “Your right hand to the state government and the left hand to the federal government.” Medicaid costs about $13 billion a year in state and federal allocations, she said.

“If you’d like to volunteer to give me more money I’d be glad to take it. But the point is it’s not for free,” Wos said.

Partnership for a Healthy North Carolina is intended to add a greater measure of budget forecasting certainty. As it is, the state starts with “some kind of magic number based on some type of forecasting miracles” to develop an annual Medicaid budget, Wos said.

Last year, that resulted in a cost overrun between $420 million and $450 million, she said. State Rep. Harry Brown, R-Onslow, said in his constituent newsletter this week that Medicaid shortfalls are now projected at $500 million this year and $700 million next year.

Some audience members were concerned with how vague the reform framework is.

The department simply could have crafted a “new and improved version” and mandated it, Wos said. Instead, “We’re looking to you to bring to us your success stories and what you think is good and works,” and determining whether and how to fold that into the reshaped Medicaid system.

“We’re in a phase right now where we’re trying to get it right,” and that is the purpose of the statewide listening sessions, Wos said. Any changes still require state legislative and federal approval.

Wos said there would be more than one health plan provider because “we live in a right-to-work state, and [a] democracy, and we like choice.” And experience shows states that have only one provider “can be held hostage” when the provider comes back at the end of the year and demands more money to meet expenses.

The number of providers is being capped because medical providers say too many plans create more paperwork and patient populations aren’t sufficient for all plans to be profitable.

Dr. Henry Tripp, a Guilford County-based physician whose practice offers home visits for elders and other homebound people in multiple counties, said after the meeting that CCNC has not been the quintessential success its promoters claim.

“I do think it’s time to innovate. I think it’s time to look at what could be done better,” Tripp said. But the state also needs to safeguard a way to back out of a new system that does not work, he said, and privatization concerns “are very important.”

“CCNC, I think, is a good concept, and I think in some places it’s working very well. We’ve had some difficulties because we straddle different portions of that. It’s compartmentalized geographically. So about half of the patients we have we can’t access CCNC,” Tripp said. “We don’t get a lot of attention from CCNC … and I would like to see them participate more.”

Under the CCNC model now in operation, “One person could have four different case managers,” Steckel said. Behavioral, physical health, and dental services are segregated.

“Nobody is coordinating that whole person in a way that adds value to that whole person,” Steckel said.

The CCNC model does a good job at tracking how many procedures were performed and where, Wos said.

“What does that have anything to do with is the patient healthier?” she said. “We want to create a system where we’re actually trying to make people healthy.”

Under the comprehensive care entities, the money will follow the patient, rather than being allocated to a geographical area.

A “medical home” centered around a primary care physician “will be responsible for shepherding them to all their needs, whatever their needs are,” Wos said.

“We’re trying to create a system that’s efficient and stops wasting money” through repeat services for which doctors are paid each time, Wos said. “Not everyone needs to get one of everything all the time. You should be able to get what you need when you need it.”

One goal is to find incentives for patients to be accountable for their own health, whether it’s paying a phone bill for a month for patients keeping doctors appointments or offering rewards for weight loss.

Patient accountability is an issue Medicaid directors all over the U.S. struggle with, Steckel said. Some critics say Medicaid recipients should have higher co-pays and deductibles as a way to make them more accountable.

“That doesn’t work,” Steckel said.

Dan E. Way (@danway_carolina) is an associate editor of Carolina Journal.