The Senate on Monday night gave preliminary approval to House Bill 372, the Medicaid Transformation Act, by a 38-10 vote after a dispute over rules and decorum and a testy debate over whether this legislation would make expansion of Medicaid under the Affordable Care Act more likely.
The measure voted on Monday, substituting for a version passed by the House, is on today’s Senate calendar for final passage.
The bill would create a new Cabinet-level Department of Medicaid to oversee the program state-federal health insurance program for the poor, disabled, and elderly. It would allow large insurance companies to create managed care organizations that would compete with doctors and hospitals for Medicaid patients.
After Monday’s vote, a third and final reading was called for, at which time Sen. Terry Van Duyn, D-Buncombe, rose to object. Sen. Tom Apodaca, R-Henderson, chairman of the Senate Rules Committee, said Van Duyn had waited too long to ask for the delay. But after a request from Sen. Dan Blue, D-Wake, to extend a courtesy to Van Duyn so that she would have time to “prepare an amendment or whatever else she had in mind,” Apodaca relented, setting up today’s likely final vote.
During the final minutes of debate on the bill, Sens. Gladys Robinson, D-Guilford; Joel Ford, D-Mecklenburg; and Floyd McKissick, D-Durham, all made spirited comments about the need for Medicaid expansion and questioning when that might occur. Sen. Ralph Hise, R-Mitchell, made no commitment to any timetable for Medicaid expansion, suggesting that policymakers in Washington will have the final say over the details of Obamacare.
Earlier in the day, after the bill had been debated in the Senate Appropriations Committee, Senate Majority Leader Harry Brown, R-Onslow, said Hise and Sens. Louis Pate, R-Wayne, and Tommy Tucker, R-Union, “have been working with their House counterparts for many, many months to come up with something they can live with. I think we’re pretty close to that, and hopefully we can move forward.”
“Yes, I am optimistic we are close on an agreement, and with a few decisions made we can resolve those open issues,” said Rep. Donny Lambeth, R-Forsyth, chairman of the House Appropriations Committee and one of the principal negotiators on the Medicaid issue.
“We are attempting to reach middle ground that makes sense for the providers and patients,” Lambeth said. Both chambers have made concessions, he said, and, like Gov. Pat McCrory, are committed to Medicaid reform.
Medicaid remains “a dinosaur plan,” Lambeth said. “If we do this correctly it will take some time to implement, but the benefits to the patients, state, and providers of care is significant, and will be a model for the rest of the nation to copy.”
Lambeth said at least two issues between the House and Senate must be resolved: Removing Medicaid from the state Department of Health and Human Services and shifting it to a new agency; and establishing a hybrid of managed care companies and provider-led entities that would operate regional and statewide Medicaid networks.
While Lambeth said the House continues to prefer physician-led networks, Brown signaled some optimism the House would go along with the Senate’s preference of allowing commercial insurance companies to create networks to compete with providers.
The Senate and House both want a capitated system in which providers receive a flat monthly fee to cover all physical, mental, and long-term care services for most Medicaid patients. Currently, Medicaid pays for every patient visit and does not limit the number of visits.
It would be a risk-adjusted plan, meaning that providers would get more money for sicker patients with greater needs.
Hise said competition between managed care organizations and provider networks would drive taxpayer costs down, and push quality up. There would be three statewide plans, and five to eight regional plans.
The new Department of Medicaid would be exempt from the State Personnel Act. Hise said that would provide greater flexibility to hire the best employees, pay them competitive market wages, and include the ability to hold them accountable for performance.
The Senate also dropped its original proposal for a Health Benefits Authority governed by an independent board of directors. Instead, a Cabinet secretary appointed by the governor and confirmed by the General Assembly would manage the new department. Other Cabinet secretaries are appointed without legislative confirmation.
“There’s still some questions over having legislative confirmation on a Cabinet secretary that I think they have some issues with,” Hise said of the Governor’s Office.
The compromise plan also moves closer to the House position by extending the period mental health service organizations known as LME/MCOs would be funded as the transition takes place to single Medicaid entities providing “whole person” care, including both physical and mental health.
The compromise bill includes $5 million in recurring state funds, which would be matched by federal dollars, to start up and operate the new department, Hise said. There is $8 million included to create a new health information exchange to allow all providers in the state to share patient records.
The bill would end the state’s contract with Community Care of North Carolina, which now administers Medicaid. But in a concession, the Senate would delay the termination from Jan. 1 to May 1. The $10.8 million saved would be used to continue funding to county health departments, and raise payment rates for primary care and OB-GYN doctors.
Dan E. Way (@danway_carolina) is an associate editor of Carolina Journal.