N.C. House v Senate Medicaid proposal

I am not opposed to managed care in Medicaid. In fact, in January 2014, I proposed an approach to both expand insurance coverage and reform Medicaid by using private insurance to cover newly eligible persons via Sec 1331 (Basic Health Plan) of the ACA that would have insurance companies and integrated delivery systems compete for the newly eligible beneificiaries. Down the road, the state could opt to place a large proportion of Medicaid beneficiaires into private insurance.

The move toward capitation throughout the health care system and for payers to insist on improved or at least steady quality per cost is inevitable and generally a necessary and good thing. My problem with the Senate Medicaid proposal is that it is too much, too fast. A few points on the two plans (both of which are quite incomplete because they don’t address expanding insurance coverage, and don’t address other things that I did, like the patient safety/medical malpractice situation and scope of practice laws):

  • While unclear exactly what “most of the beneficiaries” means in the House plan, around 75% of Medicaid beneficiaries are children and adults (mostly their parents). I think 75% fits the definition of ‘most.’ I think you could be fairly aggressive in moving towards full capitation for the benefits these beneficiaries typically need (primary care and secondary or hospital services). If Commuity Care North Carolina (CCNC) were required to hold capitation for this type of care for these beneficiaries in 2 years lets say, this would be a big lift. As established as they are, they don’t hold most of the benefit package under capitation, but only a small part of it, and they simply refer to secondary care which is then paid on a fee for service basis. I prefer leveraging the existing provider systems in the state, and especially the fact that our state has so many renown teching hospitals each with growing systems. However, you could also set up a CCNC “homegrown” approach v an insurance based approach and see what beneficiaries pick. The details are important, but this alone would be quite bold in the timeframes being discussed.
  • The most unworkable part of the Senate plan is adding the other 25% of the Medicaid beneficiaires to the mix, and saying their full benefit package will also be bid out for full capitation. I am sympathetic to the rejoinder “but those 25% are where all the money is going” because it is true. However, they are expensive because they have both acute care needs (doctor and hospital) as well as Long Term Care needs. With the expense comes complication, and typically, extreme vulnerability.
  • The dual eligibles are the epicenter of the cost issue in health care (this tag has about 50 posts written over the past 5 years on the topic). I have proposed quite a radical solution for the duals which is to federalize their cost (and make Medicare responsible for all of their care). In a sense then, I am agreeing that someone has to be in charge of their care to get a handle on not only cost, but appropriateness and quality. It would take time, and we need to proceed cautiously.
  • The idea that State government can write a per member per month check and be done with responsibility for Medicaid is a fiction. If (when) something goes bad, the stink bomb will drop squarely in the lap of the General Assembly and Governor, regardless of party. This is simply a fact. We will never be done with health reform, and state government in dollar terms is mostly health care plus educating kids, putting others in prison, and building roads.
  • I don’t have a problem with moving Medicaid into its own agency, and can see up and downsides. The proposal for the corporate board to govern the newly created entity as I understand it is nearly a parody (see p 6-7, sec 143B-1405). The idea that you would not have docs and hospitals represented (anyone who worked for an organization that had billed Medicaid in the preceding year is explicitly banned (see page 7, bottom fourth), and that in a state known for academic medical centers, they would be explicitly excluded from a governance board (as this language does) is laughable.
  • One option would be to call the bluff of the Senate plan and say OK, bid it out and see who applies. My guess is that no one would bid for the full benefit package for all beneficiaries (they need two plans for each county in the state, including one provider run per their specs in the bill). However, I don’t think we can afford to move ahead with something that is too grand to be workable. When you add the 2 or 4 year time frame, we are essentially inviting Lewis Carroll over for breakfast.

I am all for big bold changes, I simply think they need to start in the least disabled group of Medicaid beneficiaries, and move more slowly toward the dual eligibles and long term disabled. Bayou Care has been identified as a leader in Medicaid managed care by a commenter. Their site says that “most” beneficiaries are enrolled in managed care. I am not sure if their “most” is the same as the 75% equals most definition offered above. However, they have not implemented managed Long Term Care. When you look at their managed care of Long Term Services and Supports section, you find out that they say they have been talking about managed LTC for a decade, and that they put out a Request for Information on models and options in December 2012, provided a concept paper in August of 2013, issued concept briefs in February of 2014, and their earliest expected implementation data to enroll Medicaid beneficiaries into managed care for LTC to be July 2015. That is longer than the 2 year time frame proposed by the N.C. Senate bill to roll out managed care for all beneficiaries, for the full benefit package.

That is what I mean when I say the plan is overly grand.

About Don Taylor
Professor of Public Policy at Duke University (with appointments in Business, Nursing, Community and Family Medicine, and the Duke Clinical Research Institute). I am one of the founding faculty of the Margolis Center for Health Policy, and currently serve as Chair of Duke's University Priorities Committee (UPC). My research focuses on improving care for persons who are dying, and I am co-PI of a CMMI award in Community Based Palliative Care. I teach both undergrads and grad students at Duke. On twitter @donaldhtaylorjr

One Response to N.C. House v Senate Medicaid proposal

  1. Pingback: End of the session Medicaid stuff | freeforall

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