Under the Dome

NC Senate budget would shift Medicaid to outside agency

The Senate’s budget proposal lays out a dramatic shift in how the state handles Medicaid – setting up another debate with the House over the best way to pursue Medicaid reform.

The goal is to change Medicaid from the current fee-for-service plan – where doctors, hospitals and other medical professionals get paid for each office visit and procedure – into a program with funding that pays a group of providers or insurance companies a set amount for each person to then manage their care.

Senate leaders want Medicaid to be removed from the Department of Health and Human Services and overseen by a “Health Benefits Authority.”

The new agency would be run by an appointed board – with members appointed by Senate leader Phil Berger, House Speaker Tim Moore and Gov. Pat McCrory – who would hire a CEO and contract with private healthcare firms.

The Health Benefits Authority wouldn’t be subject to the state personnel law, so it wouldn’t face any limits on employee salaries. “We want the very best individuals to be chosen to run Medicaid,” said Sen. Tommy Tucker, a Union County Republican and a top health budget writer.

DHHS workers who currently handle Medicaid would lose their jobs, although they’d receive a 5 percent raise for agreeing to stay on through the end of the transition. “We need a very different skill set” under the new system, said Sen. Ralph Hise, a Spruce Pine Republican who’s also a health budget writer.

The Health Benefits Authority would contract with three healthcare providers who’d serve Medicaid patients statewide. Additionally, the authority would divide the state into six regions and offer contracts to two local providers within each region.

That’s designed to offer choices to Medicaid patients. “Beneficiaries could choose from up to five providers for Medicaid service,” Hise said.

The Medicaid changes aren’t the only aspect of the Senate’s health and human services budget that likely will draw debate.

The budget includes a plan to phase out the Certificate of Need program that regulates the placement of new healthcare facilities. That change is opposed by the N.C. Hospital Association, which says looser regulations would allow doctors to perform profitable procedures outside hospitals – making it harder for hospitals to provide charity care.

Dropping the Certificate of Need process is backed by Senate Rules Chairman Tom Apodaca, who argues that “if we opened it up and let providers compete, the consumers would come out better in the long run.”

Also on the chopping block: Durham’s Wright School, a residential campus serving students with disabilities. The Senate budget would close the school and save about $2.8 million a year.

“It serves a very limited geographical area of the state,” Hise said. “We’re struggling to find services across the rest of the state.”

Sen. Floyd McKissick, a Durham Democrat, said he opposes the closure. “Those children really do benefit from those programs,” he said. “What’s going to become of those kids?”