A plan to transform Medicaid in North Carolina could shift into neutral or be halted as soon as Tuesday — a ripple effect from the state budget dispute.
Medicaid serves 2.1 million North Carolinians. Of that total, 1.6 million will be enrolled in managed care under a federal waiver approved in October.
Managed care is a system under which people agree to see only certain doctors or go to certain hospitals, as in an HMO or PPO health-insurance plan.
The Senate is scheduled Monday night to address a bill that would delay the roll-out until at least March 1 from a planned Nov. 1 debut in the Triad and Triangle — and Feb. 1 for the rest of the state.
Enrollment began Monday for Medicaid recipients and runs through Sept. 13.
However, the latest version of Senate Bill 212 contains an insertion from the House that requires the delay if the state budget has not become law by midnight Monday.
“Our Medicaid reform plan will stop and be unable to move forward on our timeline, risking major improvements in care to Medicaid patients who need medical care,” said Rep. Donny Lambeth, R-Forsyth, and a key House budget writer.
Democratic Gov. Roy Cooper vetoed the Republican budget compromise June 28, in large part because it did not contain a form of Medicaid expansion for a potential 450,000 to 650,000 North Carolinians.
A vote on overriding Cooper’s veto could take place during the House floor session Monday night. House GOP leadership has not attempted the override since placing the item on the floor agenda July 8 in a waiting game with House Democrats.
“The bill was written in a way to encourage a veto override vote by Monday, but I’m not sure that it increases the likelihood of that override happening,” said Mitch Kokai, senior policy analyst for Libertarian think tank John Locke Foundation.
“I don’t see any fence-sitting Democrats being swayed to support the override because it will lead to a quicker roll-out of the Medicaid changes.”
Prepaid health plans
Prepaid health plan insurer contracts are at the heart of a Medicaid transformation that will represent a $6 billion expense annually for three years, followed by two one-year options, so the total contract could be worth $30 billion.
Prepaid health plans represent a major overhaul in how the state pays for Medicaid patients’ care. Currently, health providers are paid under a fee-for-service system.
The plans, by contrast, will pay providers a set amount per month for each patient’s costs. The N.C. Department of Health and Human Services will reimburse the plans.
All health plans are required to have the same Medicaid services, such as office visits, blood tests and X-rays. Health plans also have added services, such as gym memberships and programs to have a healthy pregnancy. Health plans work with different doctors and health care professionals. Each plan has its own network of qualified doctors and health care professionals.
If a recipient does not choose a plan by Sept. 30, one would be chosen for them. In most instances, recipients will be able to be seen by the same providers they have now.
“Our vision for Medicaid managed care is to improve health and well-being through an innovative, whole-person centered and well-coordinated system of care that addresses both medical and non-medical drivers of health,” DHHS Secretary Mandy Cohen said in a statement.
The roll-out is dependent upon $218 million in start-up funding in the 2019-20 state budget. According to the office of Senate leader Phil Berger, R-Rockingham, that money would go toward patient enrollment-broker contracts, provider credentialing, data analytics and other program-design components.
A stopgap appropriations bill cleared the House Thursday that did not contain funding for the roll-out. That bill allows for state funding of initiatives significantly or heavily dependent on federal funding to proceed.
“The stopgap bill was very limited and we made the decision not to include transformation,” Lambeth said. “We did not want to hold up the stopgap bill.”
Sen. Joyce Krawiec, R-Forsyth, said legislators are working on some funding sources. “There are a few options that we hope we can work through,” she said, thought she did not describe them.
“I am in the process of assessing the consequences of postponing Medicaid transformation. Some of the vendors are concerned with the costs of delay; it will be substantial.
“DHHS officials have told me they are not in favor of delay and the roll-out should continue as planned,” Krawiec said.
DHHS said Thursday that “our current mandate is to move forward with implementing managed care, and we are on track for a go-live date of Nov. 1.”
Status-quo budget means less pressure
It appears House GOP leadership needs at least seven Democrats to support the veto override for it to pass.
By contrast, Senate GOP leadership needs just one Democrat to agree to a veto override. The Senate must wait for the House to act before it can.
If both veto overrides are successful, the budget bill becomes law retroactive to July 1.
Unlike federal budget fights that often lead to government shutdowns, the vast majority of state government — estimated at 90% — operates on a status-quo basis via recurring funding at 2018-19 levels, according to the governor’s office.
Senate GOP leadership introduced a bill Wednesday calling for a July 22 adjournment of the current session with an exception of a limited Aug. 27 session for unspecified reasons.
Cooper said Wednesday in a letter to Berger and House speaker Tim Moore, R-Cleveland, that “in recent days, it has become clear that you do not have the votes to override my veto of the budget. I don’t believe you are likely to secure those votes.”
Moore told reporters after the July 8 session that “we want everybody to have time to think about where they are on this vote. We’re going to wait until the time is right.”
Berger has accused Cooper of holding the state budget hostage to Medicaid expansion.
“We hope that the leaders and the governor can finally have a productive conversation about a budget compromise, free from the governor’s ultimatum that no budget can move forward without Medicaid expansion,” said Berger’s office.
“As we’ve said, we do not think a $24 billion budget should be held up over a single policy disagreement.”
Meanwhile, Medicaid expansion legislation in House Bill 655 contains language that would not allow it to take effect until a budget bill is signed into law by Cooper.
There is slim confidence among analysts that even if HB655 is passed by the House that the Senate will vote on it because of Berger’s opposition to any form of expansion.
“The fact that North Carolina simply continues its previous budget when a new one is not in place means that there is less likelihood of such pressure than would be the case in a state where the government is not allowed to spend at all without a budget,” said Zagros Madjd-Sadjadi, an economics professor at Winston-Salem State University.