Proposed changes in North Carolina’s Medicaid system are intended to improve patient health and would allow the state to penalize companies whose treatment falls short of goals, state officials said Tuesday.
Legislators were given an overview of the plan to open the state’s $13 billion Medicaid business to insurance companies and “provider-led entities” – hospitals, doctor groups or other health care providers who would offer health care plans to Medicaid patients.
The federal government, which pays most of the state’s Medicaid costs, must approve the plan. The legislature required the state Department of Health and Human Services to submit a proposal to the federal government by June 1.
Any change is years away. Patients probably wouldn’t see a switch for at least three years.
Under the proposal, most of the state’s 1.9 million Medicaid beneficiaries would have a choice of at least four health plans. A Medicaid law the legislature passed last year calls for three plans to be offered statewide and for provider-led entities to offer regional plans. The DHHS proposal divides the state into six regions.
A motivation for the changes is to make state Medicaid spending more predictable. The state would no longer pay providers for each hospitalization, doctor visit or medical treatment; instead, providers would get a set sum for each patient. The state is calling the proposed system “pre-paid health plans.”
With the change from fee-for-service comes the chance for more flexibility, state officials said — to pay for items that can improve health but are not considered medical devices. An oft-cited example is using Medicaid funds to buy an air conditioner for a patient with a chronic illness exacerbated by heat and humidity.
“The goal is to create a system where people are healthier,” said Dave Richard, state Medicaid director.
The proposal does not include expanding Medicaid to more low-income adults under the Affordable Care Act. Legislative Republicans oppose Medicaid expansion.
“We’re not here because we’re trying to foster more dependence on government,” said state Rep. Bert Jones, a Rockingham Republican.
But Rep. Verla Insko, a Chapel Hill Democrat, said the state should look at how much it costs to care for people without insurance.
“I do think at some point we need to examine the options and benefits and pros and cons,” she said.
DHHS is hosting a dozen public information sessions across the state. Dates have not been finalized, but a Raleigh session probably would be at the end of this month.
DHHS Secretary Rick Brajer said he’s spoken with the state’s major hospital systems about offering provider plans and has met with UnitedHealthcare and Blue Cross and Blue Shield of North Carolina; had a group meeting with a dozen health plans; and plans to meet with Aetna.
Last year, 11 hospitals systems said they were forming a limited liability corporation to see whether they could offer a statewide Medicaid plan.