Medicaid: Don’t break the fix

by YES! Staff

Medicaid: Don’t break the fix

The inaugural meeting of the Medicaid Reform Advisory Committee in Raleigh last week shows promise for repairing the state’s expensive Medicaid system through a delicate intervention without sending the patient into cardiac arrest.

If Gov. Pat McCrory hoped to ram through a privatization plan to bring in a for-profit company to run the Medicaid system across the state, other forces appear to have sidelined his plans.

The first significant hurdle for McCrory’s reform drive was an analysis released last month by the NC General Assembly’s fiscal research division undermining claims by the governor and Department of Health and Human Services Secretary Aldona Wos that administrative costs for North Carolina’s Medicaid program are significantly higher than in other states.

And the CFO of the Division of Medical Assistance threw some cold water on the governor’s alarmist rhetoric about a “broken” system last week during the initial advisory committee meeting. NC Health News reports that CFO Rick Brennan told the panel that Medicaid growth in North Carolina has actually slowed since 2010, at the height of the recession — a trend that mirrors the national picture.


Instead of having private insurance’  companies compete for contracts, the McCrory administration is now considering breaking the state into regions in which a consortium of health providers, possibly including nonprofit hospital groups, would manage costs, the News & Record and other outlets reported.

Bob Atlas, the private consultant hired to advise the state on Medicaid reform, has repeatedly chanted the mantra of managed care. That could mean a number of things, from full privatization to nonprofits working with providers and patients to lower costs through preventive care or lifestyle coaching. Another reform idea is capitation — a model in which funds are allocated per patient rather than paid out every time a service is used. And Atlas suggested that the state should contract with some kind of outside entity to absorb part of the risk for cost overruns.

Beyond the questionable numbers bandied by the McCrory administration, the governor also faces potential resistance from his fellow Republicans in the NC House. Rep. Nelson Dollar (R-Wake), who was appointed by House Speaker Thom Tillis to serve on the reform advisory committee, is reportedly a fan of Community Care of North Carolina, or CCNC, which currently coordinates Medicaid services on the state’s behalf.

A report by the national consulting firm Milliman found that CCNC saved the state $984 million over a four-year period.

“We’ve been able to take the population and look at risk and try to do some predicting of who do we need to spend some more time with?” Dr. Allen Dobson, CEO of CCNC, explained in a video . “Who’s at risk of getting sicker, being in the hospital, that if we did something we’d prevent a readmission or an additional hospitalization?” Sounds a lot like managed care. Maybe North Carolina is the model for reform rather than the laggard. !

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