NC Bill would make Medicaid Management Changes

The Department of Health and Human Services would no longer supervise day-to-day operations of North Carolina’s Medicaid program under a bill that received key support Thursday.

A General Assembly subcommittee endorsed a measure to shift the state Medicaid office from direct control of the department — run by Gov. Pat McCrory’s administration — to a new eight-member Health Benefits Authority.

The board would be housed within DHHS but act independently from the department and its secretary. The authority would receive an annual amount from the legislature to operate Medicaid, which provides health coverage for 1.8 million people, primarily poor children, older adults and people with disabilities.

House and Senate Republicans reached a stalemate last summer over Medicaid governance as well as how to shift more of Medicaid’s financial risk to private providers and medical entities. They are still at odds over how to change the traditional fee-for-service model, but Thursday’s recommendations represents a significant step forward.

“This is a good compromise,” said Sen. Ralph Hise, R-Mitchell, a health budget writer and subcommittee member. “I think we’ve worked out some of our divisions on this.”

Medicaid spends more than $13 billion in federal and state funds annually and has been marked until recently by large shortfalls, higher employee turnover and billing mishaps. McCrory’s administration has said the state Medicaid office had made marked fiscal improvements over the last year that would be thwarted by a governance change.

Medicaid director Dr. Robin Cummings said many directives to the Health Benefits Authority already are being done by his office, such as more rigorous Medicaid forecasting.

“The bottom line is we oppose the creation of this board because we just think it’s adding complexity to a situation that’s already very complex,” Cummings said.

Another subcommittee member said the panel would ensure Medicaid operations don’t head south.

“It does a better job of continuity and it improves accountability,” said Rep. Justin Burr, R-Stanly.

The proposal goes to the full Program Evaluation Oversight Committee next week, but only so it can offer a bill during the new session that begins in earnest Jan. 28. The idea would have to pass both chambers before it could go to McCrory’s desk for his signature.

The board would be comprised of health experts, most of whom would be paid similarly to what a hospital or insurance company pays its board members. It could increase or decrease Medicaid services to ensure the budget provided by legislators is met. The legislature could supersede the board’s decisions and would still set Medicaid eligibility rules.

Legislative leaders would get four appointments and McCrory three, plus his DHHS secretary, who would have no vote.

The legislation would create a cash reserve for the authority to help cover significant shortfalls.

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