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A Potentially Disastrous Medicaid Move

Posted: 05/03/2016

By Dr. David Tayloe Jr., Raleigh News & Observer.  

The General Assembly voted in August to ask the federal government, via an 1115 Waiver Proposal, for permission to involve for-profit managed-care health insurance plans in the operation of our Medicaid program.

The General Assembly wants to implement capitated value-based payment protocols within Medicaid and to transfer the financial risk for Medicaid cost overruns from the state to the managed care plans.

The Department of Health and Human Services, in responding to the action of the General Assembly, published an 1115 Waiver Proposal on March 1 so that interested citizens could comment before the department submits the final waiver request to the federal government June 1.

Currently, providers of services for Medicaid patients in our state deal with one payer, the state, and one team of care coordinators. Providers are assigned to one of 14 physician-directed networks within Medicaid through Community Care of North Carolina. Over 90 percent of physicians participate in Medicaid. The federal government and other states view Community Care as the national model for state Medicaid programs. The program has won numerous national awards.

Under the Waiver Proposal, a practice like Goldsboro Pediatrics, which cares for 20,000 Medicaid patients in three Waiver Proposal regions, may have to deal with 15 payers and 15 care coordination systems. And the Waiver Proposal includes no statewide provider-led entity like Community Care of NC.

Physicians, who are paid only 77 percent of the Medicare rate when other states pay physicians the same for Medicare and Medicaid services, are not going to be able to afford the administrative costs of such a complex managed-care program. Providers will drop out of the Medicaid program. Medicaid patients will have major difficulty accessing the high quality health services they have come to expect under Community Care of North Carolina. Patients will be forced to go to expensive hospital emergency departments for primary care. During the 12 public hearings on the Waiver Proposal, no physician has expressed support for it.

Physicians authorize, through their signatures, prescriptions and orders – over 90 percent of the cost of the Medicaid program. If the physician community is in revolt over the Waiver Proposal, how likely is such a proposal to meet the goals of the General Assembly?

Our current program, Community Care of North Carolina, is a national model. Physicians worked closely with the late Barbara Matula, director of Medicaid, the late Jim Bernstein, director of Rural Health, and pediatrician and former Secretary of Health and Human Services David Bruton to develop Community Care during the early 1990s. It was designed to involve physicians in directly improving access to care, quality and cost-effectiveness of care at the community level. Over a recent five-year span, enrollment in Medicaid went up while costs remained flat.

If the General Assembly wants to move to capitated value-based payment in Medicaid, we could do that under Community Care of North Carolina without disrupting provider practices and patient care patterns.

The last time our state considered a legislative fix for Medicaid was in 1996, when a hospital consortium attempted to convert Medicaid into a for-profit managed-care system. Physicians bonded together to convince the General Assembly that the Community Care of NC program was a better option for our state, our patients and providers.

It is not too late for the General Assembly to rethink this potentially disastrous proposal. In the meantime, providers across North Carolina will attempt to persuade the federal government to turn down the Waiver Proposal as written.

Dave Taylor, M.D., of Goldsboro is a past president of the NC Pediatric Society and the American Academy of Pediatrics.

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