As NC seeks to privatize Medicaid, nonprofit touts cost savings

Source: John Murawski, The News & Observer, September 2, 2016

As federal authorities weigh the North Carolina legislature’s request to privatize Medicaid services here, a Raleigh-based nonprofit that manages 1.6 million Medicaid patients for the state said it continues delivering financial savings and improved health outcomes for patients. The nonprofit organization, Community Care of North Carolina, or CCNC, published its 2015 performance measures in the summer issue of N.C. Medical Journal, the first time that CCNC has publicized its performance in such a fashion. The Journal’s editors requested the submission for a special July/August issue dedicated to the subject of value-based care, an emerging health care trend that seeks to measure quality as it relates to the cost of providing care. … In the medical journal article, CCNC said that in 2015 the state’s Medicaid results are beating expectations. CCNC said total costs were 5 percent below an established benchmark, emergency room visits were 7 percent below, inpatient hospital admissions were 26 percent below, and hospital readmissions were 51 percent below. … Among the 1.6 million patients CCNC manages, the average cost per patient per month last year was $543. That amount has fallen every year since 2010, when the average monthly cost per patient was $597. … The state pays $3.6 billion toward Medicaid for state residents and is a huge chunk of the state’s $22 billion budget. The federal government pays the majority of North Carolina’s $15 billion Medicaid program. That money largely pays for doctors, medicine, hospitals and other related costs. Of the CCNC-managed patients, 53,875 were admitted to hospitals last year. That year there were 3,262 hospital readmissions within 30 days of the original admission, but more than 6,600 readmissions had been expected based on the 2012 performance benchmarks. …

Related:

State proposes privatizing Medicaid
Source: Kent McDonald, Daily Tarheel, March 9, 2016

State officials announced a multi-year draft of a plan to reform North Carolina’s Medicaid program last week, effectively moving it toward privatization. The plan has been in the works since reform legislation was approved in September by the N.C. General Assembly. The N.C. Department of Health and Human Services has helped coordinate and create the draft for the new program, which features a patient-centered approach. …

Providers fret, insurers hail N.C. move to Medicaid managed care
Source: Virgil Dickson, Modern Healthcare, October 6, 2015

North Carolina hospitals and doctors say the state’s push to institute Medicaid managed care will reduce services for the poor and shortchange providers despite the legislation giving them the opportunity to bid on the contracts. Late last month, Republican Gov. Pat McCrory signed legislation enabling changes that will move the state’s $12.7 billion Medicaid program serving 1.9 million residents from fee-for-service payments made directly to providers to capped payments to managed care insurers. … Providers, on the other hand, wanted the state to build on the success of a medical home initiative already in place for some Medicaid beneficiaries. The Community Care of North Carolina initiative organized 14 provider-based community networks, which still use fee-for-service but are paid a monthly per-member fee to coordinate patient care. The model appears to have saved the state money, according to a report from North Carolina’s Office of the State Auditor released in August. Community Care of North Carolina saved the state $312 a year for every non-elderly Medicaid patient from 2003 to 2012, which equates to more than $400 million a year.

Lawmakers ignore their own Medicaid expert
Source: Chris Fitzsimon, The Courier-Tribune, September 28, 2015

Rep. Nelson Dollar, a prominent member of the House Republican leadership and its top budget writer, not only opposed the plan that he correctly said would be putting stockholders ahead of N.C. citizens, he challenged the misleading claims about the current Medicaid system made by the ideologues and special interests who are intent on privatizing it. Dollar pointed out that for all the bluster about the current system being broken and out of control — two characterizations repeated incessantly by the privatizers — Medicaid claims costs have fallen in the last five years even as the program now serves 200,000 more people. Dollar said North Carolina ranks 42nd in the nation in the cost per full-time Medicaid enrollee and the cost per patient has declined in the last four years. …

Local legislators defend Medicaid privatization
Source: Adam Lawson, Lincoln Times-News, September 28, 2015

General Assembly legislators leapt over perhaps the session’s final big hurdle last week, approving Medicaid privatization while delaying many of its changes. The hopes are that the change from per-visit payments to up-front per-patient payments will provide the state a clearer idea of what the program costs and discourage doctors from seeing patients more times than necessary in an effort to get as much money possible from the state. … About 1.8 million North Carolinians use Medicaid, according to legislative estimates. In 2014, the Affordable Care Act created an opportunity for states to provide eligibility to the program for individuals under 65 years old with incomes up to 133 percent of the federal poverty level. … Though the legislation had most Republicans’ support, Cary Rep. Nelson Dollar voiced opposition to the plan. Dollar told reporters that to say Medicaid costs are out of control is a false statement and that it is a mistake to invite commercial HMOs into the state.

Privatizing Medicaid would mean more mess, more deaths
Source: Leslie Boyd, Citizen-Times, September 25, 2015

The plan, House Bill 372, calls for three big companies to establish five to eight regional networks in the state. Each company will be paid a set amount per patient. Whether that amount will be even close to what it costs to care for people is not addressed, but the state will wash its hands of cost overruns and private companies will decide how care is rationed.  No matter how much or how little is allocated for Medicaid, paying for profits will have to come out of that allocation, and that means it will be diverted from patient care. The bill before the House now directs 88 percent of the money each company receives to be spent on patient care. It’s a simple pie chart: 100 percent of the money goes out, 12 percent is set aside for private insurers. That’s 12 percent that isn’t going for patient care.

Legislators Approve Medicaid Privatization Plan
Source: Jorge Valencia, WUNC, September 23, 2015

The North Carolina House and Senate approved on Tuesday afternoon a long-awaited plan to overhaul the state’s Medicaid system. The proposal could affect more than 1.5 million people who receive health care through the publicly-funded program, but it could take years for it to be fully implemented. … North Carolina spends almost a fifth of its budget on Medicaid annually, roughly $3.7 billion, and lawmakers have been arguing for years that the cost is rapidly growing. They say the point of writing a check to a private company for each patient is so that taxpayers don’t have to shoulder overruns, and so that lawmakers can more accurately estimate the cost of Medicaid every year. … For-profit insurance companies would be required to spend at least 88 percent of funds on patient care, but Dollar says it should be non-profits doing that job. He was one few Republicans who voted against the bill. The vote came down largely along party lines, with 65 voting favor and 40 against in the House and 33 voting in favor and 15 against in the Senate.

State Leaders Weigh In On Medicaid Privatization
Source: Dennis Biviano, Time Warner Cable News, September 18, 2015

The North Carolina Medical Society has long been opposed to managed healthcare. Vice President and CEO Robert Seligson says lawmakers’ new plan on Medicaid misses the mark in some areas, and doesn’t do enough to protect providers and patient care alike. … Medicaid insures almost two million poor, elderly or disabled residents across the state. Under House Bill 372, three insurers would be contracted to manage plans in North Carolina. Rather than pay for each hospital visit or procedure as the program currently does, the new Medicaid plan gives companies a fee for patient enroll. … The bill is expected to be voted on next week. Experts say that changes are expected to take several years, but the state must submit its changes to the federal government by the beginning of June. Under the new plan, companies would be required to spend at least 88 percent of its payment on medical care. Nearly 18 percent of our state’s population uses Medicaid.

North Carolina to privatize Medicaid
Source: Lynn Bonner, The Charlotte Observer, September 17, 2015

Under House bill 372, three insurers would be given contracts to offer statewide Medicaid managed care plans. The state would have up to 10 contracts with “provider-led entities,” or groups of doctors and hospitals, that would enroll patients in regional managed care networks. … Administrative changes will come over time. In about four to five years – a year after the per-patient contracts begin – the state will eliminate the state Medicaid office. A new division within the state Department of Health and Human Services –called the Division of Health Benefits – will administer the Medicaid program. Beginning in 2021, the legislature will confirm the person the governor appoints to run the new division. Directors will serve four-year terms. Employees within the new division will be exempt from the State Personnel Act, meaning they will work “at will” and without the protections of state personnel law. The state pays for about 400 jobs in the Medicaid office.

State Health Secretary Argues Against Privatizing Medicaid
Source: Neal Charnoff, WFDD, September 25, 2014

North Carolina’s health secretary pushed back Wednesday against a state Senate proposal to privatize Medicaid through the creation of a regional Department of Medical Benefits. Dr. Aldona Wos pleaded her case before a legislative subcommittee whose mission is exploring a Medicaid overhaul. Changes to Medicaid could include removing the program from the N.C. Department of Health and Human Services and creating the new initiative….

Wos argues against Medicaid privatization
Source: Richard Craver Winston-Salem Journal, September 24, 2014

…The N.C. House, Gov. Pat McCrory and Wos have opposed the privatization proposal for months. They prefer massaging the existing system with more risk-reward responsibility to providers as part of fleshing out an Accountable Care Organization initiative….

North Carolina Medicaid overhaul veers away from privatization
Source: Emery P. Dalesio, Associated Press, February 26, 2014

Gov. Pat McCrory’s health agency on Wednesday proposed holding down rising Medicaid costs by adapting and expanding current networks of physicians or hospitals into agreements allowing them to keep a portion of savings they generate while meeting treatment goals but sharing the losses if patient costs are too high. The plan backs away from initial proposals last year to stop annual multimillion-dollar Medicaid cost overruns by paying a handful of statewide managed-care providers fixed amounts to deliver medical, mental and dental care to about 1.7 million poor and disabled people….