Legislative leaders and Gov. Pat McCrory gave a general outline Friday of how they plan on changing the state’s $13 billion Medicaid program, a program that affects 1.5 million North Carolinians and accounts for one of the state’s biggest expenditures.
House Speaker Thom Tillis, Senate leader Phil Berger and McCrory issued a joint press release Friday morning that says the Republican leaders will use the Senate budget plan to have the N.C. Department of Health and Human Services draw up a waiver proposal to ask the federal government for the Medicaid changes.
The Medicaid program uses a combination of federal and state funds to provide required health care for more than 1.5 million low-income of North Carolina’s disabled citizens, elderly residents and children.
The announcement of how the reform effort will progress came a month and a half  after McCrory and his Department of Health and Human Services Secretary Aldona Wos announced they wanted to open North Carolina’s Medicaid program up to potential privatization.
Today’s announcement is the first time the McCrory administration has outlined how the path to reform will take place.
Though still light on details, it says that the Senate budget plan (which will be released to the public Sunday night) will include a provision calling on DHHS officials to draw up a waiver that will then be submitted to the federal Medicaid program for approval. The Senate budget is also expected to include a controversial tax reform proposal that will cut income and business taxes, and create a need for $1 billion in cuts over the next three years.
The Medicaid waiver will be subject to legislative approval as well, before being sent off to the federal government.
“The federal government must allow North Carolina to come up with its own solution,” McCrory said in a written statement. “We have a unique opportunity in North Carolina to ensure patients and taxpayers achieve the common goal of provide the best possible patient care in a system that is financially sustainable.”
Cost overruns with the Medicaid program have been the subject of ire from McCrory and legislative leaders, with McCrory and Wos calling the $13 billion program “broken.” In the written statement, Berger said Medicaid’s cost “out-of-control” and Tillis referred to Medicaid as a “budgetary time bomb.”
A January audit from Democratic State Auditor Beth Wood’s office found the Medicaid program had forecasting models that continuously failed to predict what the state’s needs were, resulting in cost overruns that the legislature had to find money to fund. Wood’s audit also determined that North Carolina’s administrative costs were higher than other states, but the comparison did not take into account hidden administrative costs that many of those states pass off to contractors.
It’s not yet clear what the DHHS waiver will request, and what type of reform McCrory and Wos want.
North Carolina’s Medicaid costs grew at lowest rate in the nation  between 2007 and 2010, in large part because of efforts by Community Care of North Carolina to manage patients’ costs.
Among the few details released by Wos and McCrory in their early April announcement was a desire to for the state to look at contracting with three or four providers (public or private) that would be paid on a monthly, per-patient basis to provide health care, including mental health and dental coverage. The state currently pays Medicaid bills, but uses CCNC to manage the costs of most patients by paying for primary doctors to oversee patients’ care. CCNC also looks at patient use of health care to stem the high costs of frequent emergency room visits and intervene to get individuals the care they need before turning to emergency rooms.
McCrory and Wos’ Medicaid reform announcement in April didn’t bode well with doctor groups, who have been highly critical of the state turning to for-profit health system and fear the state will turn its back on Community Care of North Carolina.
The program, set up a non-profit developed by doctors and providers, has been lauded for its unique approach, and Wos said at a talk she gave in Durham to sell her reform plan last week that she is “100 percent committed” to CCNC, according to news reports .
Wos stepped into controversy at a similar talk last Friday in Reidsville where she falsely blamed  the block to Medicaid expansion on N.C. Insurance Commissioner Wayne Goodwin. Goodwin has called for a public apology, but Wos has not offered one.
Calls to DHHS for comment were not immediately returned.