It will cost the state $9.7 million, at most, to help make overdue payments to 2,500 health care providers who have treated poor, elderly people on Medicaid.
The Medicaid office can cover the payments without asking the legislature for more money, DHHS said in a statement. The impact on future budgets is still being determined, the agency said.
The state underpaid providers for treating people who use both Medicaid, the government insurance for poor people, and Medicare, the federal health insurance for the elderly, from July 2013 until this March.
Legislators have been waiting since last week to find out what’s owed and how making proper payments will change future budgets.
The state spends about $3.5 billion a year on Medicaid, the state and federal health insurance program for the poor, elderly and disabled.
Sen. Ralph Hise, a Senate health budget writer, said DHHS told him that the corrected figures will not have an impact on the budget legislators are working on. Although the state was underpaying some providers, others were getting too much money, Hise said DHHS told him. The overpayments will offset the cost of the underpayments.
DHHS had not given Hise specific numbers for the next budget year, though.
“I cannot verify without a number,” he said.
Legislators have been frustrated with the lack of specifics. Senators wanted a figure to use in the state budget proposal they’re writing.
Lawmakers are turning their attention to changing how the Medicaid program operates, and some of the displeasure over the provider payment questions is beginning to seep into other issues.
The House is moving on its plan for “Medicaid reform,” which would change how the state and federal governments pay for patient care.
Rep. Gary Pendleton, a Raleigh Republican, was skeptical that DHHS would be able to implement the plan as the bill describes.
“I have no confidence in DHHS,” he said.
The House Health Committee on Wednesday debated and approved House Bill 372, which would finance care on a per-person basis, rather than paying for each hospital visit and medical procedure as the program does now.
Hospitals, doctors, and other medical providers would organize themselves into entities that would use the money to manage Medicaid patient care. Those organizations would be able to hire commercial insurance companies for side jobs, but doctors running the organizations would be in charge.
The state has a health care system called Community Care of North Carolina that assigns many Medicaid patients to primary care practices as their “medical home.” The House plan would allow for CCNC to be preserved in some form. The regional government-managed care organizations for mental health, which are also funded largely by Medicaid money, would also be preserved.
“North Carolina can seize the unique opportunity we have to build on our strengths and improve health care for all of our citizens,” said Rep. Nelson Dollar, a Cary Republican and a bill sponsor.
The bill, which DHHS supports, would put the House in direct conflict with Senate Republican leaders, who want commercial insurance companies to be able to compete with the organizations led by doctors.
Dollar said that limiting managed care to in-state entities will reduce administrative costs and channel more money to direct services.
“We don’t want an HMO between the doctor and the patient,” he said.
A bill similar to H.B. 372 passed the House unanimously last year, but this year the proposal is picking up Republican opponents who want to give commercial insurance companies a chance to set up their own Medicaid managed care operations in the state.
“This is sort of taking a step back from where I thought we were headed in this state,” said Rep. Justin Burr, an Albemarle Republican. “There is room for everyone to come to the table,” he said. “Competition is a good thing.”
Ken Lewis, executive director of the N.C. Association of Health Plans, said the state should create a “level playing field” that allows insurance companies to set up their own Medicaid networks.
“The legislature should not pick winners and losers as this legislation appears to do,” he said.
The bill now moves to the Appropriations Committee.