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Medicaid program designed for stability, not speed

During the recent legislative session, the NC Budget and Tax Center and others expressed doubts about the feasibility of enacting $359 million in Medicaid cuts in the first year of the biennium – concerns which were echoed in a letter sent by Gov. Perdue to legislative leaders prior to passage of the FY11-13 biennium budget. In a meeting of the Joint Legislative Oversight Committee for Health and Human Services yesterday, NC Department of Health and Human Services Secretary Lanier Cansler reported that there is a $100 million “hole” in the Medicaid budget attributable to various programmatic and administrative issues, of which the largest single piece is a $30 to $40 million shortfall due to delays in program change authorizations from the federal government.

In order to make changes to the Medicaid program in North Carolina – including changes to service delivery and access, such as the number of times patients can see their doctor in a given year – the NC Division of Medical Assistance (DMA) must request approval from the federal Centers for Medicare & Medicaid Services (CMS) which have broad oversight and control over each state program. What isn’t often stated in public debate and discussion about Medicaid is that gaining federal approval of changes within state programs is a slow process by design.

The Medicaid program was not designed to respond rapidly to changes in health care or the economy, or to prioritize cost-effectiveness over quality of care, even though Medicaid has proven to be better at controlling costs than private insurers in recent years. Instead, it was designed to be stable so that individuals who qualify for the program can access the care they need, and so that health care providers who serve them are compensated for their work even when their patients can’t afford to do so themselves.

The mandatory review process for changes to Medicaid is slow for a reason. North Carolina can’t possibly meet its own standards for providing quality care to low-income individuals and children by slashing Medicaid coverage left and right in order to meet arbitrary and unrealistic budget targets. Rapid changes to the program put program participants in the position to lose access to the health care and support they need in order to live productive, dignified lives. It may also have the undesirable effect of prompting health care providers to trim less profitable patients from their practices. This is the reality against which the Medical Care Advisory Committee has found itself uncomfortably positioned.

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