North Carolina lawmakers want to consult with other states on how they’ve restructured their Medicaid systems to provide better and more cost-effective care.
The desire to look at alternative management structures comes as the top official over North Carolina’s Medicaid division continues to assert that the health insurance program for the poor and disabled is best housed exactly where it is today, in the Department of Health and Human Services.
“I firmly believe that the decision to remove Medicaid from the department would be a direct contrast to the path that we are on,” DHHS Secretary Aldona Wos on Wednesday told members of a newly formed subcommittee reviewing ways to reorganize DHHS for Medicaid improvements.
That Subcommittee on Medicaid Reform and Reorganization next month will welcome officials from four states – Tennessee, Ohio, Florida and Virginia – that have already reconfigured their health and human services departments for Medicaid’s sake.
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Ohio’s experience is of particular interest to the committee, as the state’s recent creation of an entirely separate Medicaid department mirrors the most dramatic change North Carolina lawmakers are exploring.
“What I want to do is look at the problems we have and see if the states with a stand-alone (Medicaid agency) have solutions to those problems, or do they have different problems,” said subcommittee member Rep. Marilyn Avila, a Republican from Wake County.
The point is to improve the controls or predictability over Medicaid costs, which Sen. Ralph Hise, a Spruce Pine Republican working on improvements, has said can be notoriously ambiguous in terms of what’s billed under the program. “It is insanely difficult to figure out what Medicaid is paying for,” he said. Enrollment has risen with the state’s population growth and economic changes.
Medicaid represents one of the biggest individual chunks of the state’s budget and takes up 75 percent of DHHS spending. North Carolina covered $3 billion of the $13 billion spent on the program last year, with the federal government paying the rest. It has experienced annual overruns, though Wos earlier this month said Medicaid’s ledger was $63 million to the positive at the end of the most recent fiscal year. She said Medicaid overruns are “the past.”
Lawmakers are weighing three options for changing Medicaid, along with allowing Wos to keep Medicaid under her purview and improve it with new accountability measures and collaboration.
The state could create an entirely new Department of Medicaid, severed from DHHS, a model that is in place in Alabama and Ohio. Or, the state could establish a Medical Program Authority to handle Medicaid, an option Oklahoma uses – similar to the stand-alone department idea but with a few different components, like a program authority board of members appointed by the governor and legislature.
Option three would portion DHHS into separate departments, one of Health (which would manage Medicaid) and the other of Human Services, similar to the setups in Oregon and Washington.
Rep. Nelson Dollar, another Wake County Republican on the subcommittee, said he wanted to know how establishing a new department would impact the state’s budget in terms of staffing. He presumed it would call for a new departmental human resources director and budget director in addition to a new secretary and other salaried seats.
“You’re going to have to have a certain duplication ... if you have two completely separate agencies,” Dollar said.
But North Carolina might want to avoid simply modeling its decision after another state’s success, said evaluators.
“I think in the end, whatever the General Assembly decides to do, it needs to be in the context of what’s best for North Carolina and what’s going to work for North Carolina,” said Carol Shaw, principal program evaluator for the legislature’s Program Evaluation Division.
Wos said pulling Medicaid away from DHHS would disrupt her approach, which she has described as serving the public body-mind-and-soul. She has argued for a holistic department, treating mental, physical and social health under one roof.
On Wednesday, she reiterated the efforts of DHHS to raise accountability and dismantle “silos” in the department that stifle communication.
“We are witnessing collaboration and progress,” she said. “And to turn around now before we get to the finish line and realize the full benefits of all this work would be a waste of taxpayer money and greatly disruptive to those that need our service.”
Benjamin Brown writes for the NCInsider.com, owned by The News & Observer.