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The House budget includes a requirement that the position of Medicaid Director be subject to confirmation by the North Carolina General Assembly. Here’s some of the language:

4         APPOINTMENT AND CONFIRMATION OF MEDICAID DIRECTOR
5         SECTION 12H.36.(a) Effective July 1, 2014, and applying to Directors of the
6         Division of Medical Services appointed on or after that date, G.S. 108A-54 is amended by
7         adding a new subsection to read:
8         “§ 108A-54. Authorization of Medical Assistance Program; administration.
9         …
10       (e) The Medicaid Program shall be managed by the Director of the Division of Medical
11       Assistance (Medicaid Director), who shall be recommended by the Secretary of Health and
12       Human Services and appointed by the Governor, subject to confirmation by the General
13       Assembly by joint resolution. [...]

This provision should raise many questions and concerns. The legislature does not have appointment authority over any other position that is so central to carrying out the policy agenda of the Governor. If, for example, the legislature is bent on limiting access to Medicaid while the Governor wants to streamline enrollment, then the conflict will likely shut down any ability to get a Medicaid Director in place.

And while there is a clear process to appoint a Director if the Governor does not forward a nomination, the budget does not spell out what happens if the legislature refuses every nominee from the Governor. What would most likely occur is that the Governor would have to wait until the legislature is out of session and then appoint a temporary Medicaid Director.

If all of this sounds familiar it’s because this is how the process works in Washington, DC, where politics clouds every decision and ties up the basic functions of government. Instead of fostering bi-partisanship and stability, Congress has caused major disruptions in the running of Medicare and Medicaid by refusing to approve presidential nominees.

The same is likely to happen in Raleigh.

The Governor, who is elected statewide, should be able to appoint his or her preferred Medicaid Director to carry out the policies that he or she was elected to enact. If this confirmation requirement survives negotiations between the House and the Senate then leadership elected in select pockets of the state will have veto power over how the Governor runs one of the most important agencies of the executive branch.

Since assuming office Gov. McCrory has throttled the theme that Medicaid is broken and must be reformed. He began by offering a radical proposal of dismantling our current system and selling it off to private insurance plans. He has since backed away from that idea and now wants a more modest expansion of what currently works in Medicaid.

The House, in a bipartisan bill filed this session, clearly agrees with the Governor’s new approach. The legislation, spearheaded by Rep. Nelson Dollar, would build Accountable Care Organizations (or ACOs)  in Medicaid. These provider led ACOs would move us toward greater integration of care and away from fee-for-service medicine. Medicare is using the ACO model as are many private insurers. In fact, Medicaid is one of the only payers in the state not moving to this method of organizing care.

In its budget, the Senate flatly rejects this approach. That chamber wants Medicaid to move to full capitation. In other words, legislators want to provide a set budget to Medicaid. The insinuation is that the Senate prefers the Governor’s original plan to pay private insurers to care (or not care, as the case may be) for our most vulnerable citizens.

The Senate also engages in some fantasy by pulling Medicaid into a freestanding department that will engage the nation’s best health care minds in this ambitious reform effort. At least that’s how Sen. Louis Pate described the proposed process. The trouble, of course, is that the nation’s best health care minds consider North Carolina’s Medicaid program to be an important model and they aren’t interested in helping to dismember it. The nation’s best health care minds also aren’t interested in coming to our state and spending time tearing apart care for low-income people as the legislature reduces services, limits eligibility, and slashes the budget. We are, in short, engaged in the opposite of innovation.

Rep. Dollar is a smart chap and likely realizes that his ACO bill isn’t going anywhere as a piece of legislation. That means he will need to stick the proposal into the House budget to give it a fighting chance. Hence, the showdown mentioned in the title of this post.

Certainly the House is moving in a better direction. But it’s a good time to reflect that Virginia is having its own budget battle over Medicaid right now. Except instead of fighting over how to fiddle with (or blow up) a program that is working, Virginia’s leaders are having a serious discussion about using federal funds to expand Medicaid coverage to 400,000 people. If that happens it means that our tax dollars will help boost Virginia’s economy, bolster its rural hospitals, and support its citizens.

That will certainly be charitable of us, but not wise.

Last October Gov. McCrory caused a stir, and raised some eyebrows, when he said that the state may be forced to expand Medicaid due to a “new” regulation.

The policy to which he was referring is called presumptive eligibility. Presumptive eligibility allows states to give permission to hospitals and other providers to temporarily enroll certain people in Medicaid. North Carolina, for example, allows presumptive eligibility for pregnant women. That means if a hospital does an initial check and it looks like a pregnant woman is likely to qualify for Medicaid then the hospital can temporarily enroll her and get paid for the services it provides. Meanwhile, an application for full Medicaid can be processed without a disruption in care.

This policy is critical for ensuring that patients get care and providers get paid.

In states with efficient systems that can process Medicaid eligibility in real time, this temporary measure is not as important. In states where parents are having to ration medicine for their children due to a backlog in processing Medicaid applications, presumptive eligibility is a critical tool.

Health reform gave hospitals more latitude to presumptively enroll patients, even if the state has not granted the hospital permission to participate in the program. Other providers, notably Community Health Centers, however, are still not able to use presumptive eligibility to enroll children in Medicaid. The Community Health Centers are still limited to enrolling pregnant women.

Ultimately, the state needs to fix its computer system. In the meantime, we need to get care to children. We could start by granting Community Health Centers, and possibly other providers, the ability to temporarily enroll likely eligible kids in Medicaid while DHHS clears its application bottle neck.

And until the state expands Medicaid to all low-income people we will need every splint and bandage we can find to patch our broken system.

 

 

Throughout his first campaign ad for the U.S. Senate race against Kay Hagan, Thom Tillis wears an Autism Speaks lapel pin. Autism Speaks is an important science and advocacy organization that is active nationally and in North Carolina.

One of the organization’s top legislative priorities is enacting a law that requires insurance companies to cover treatments for Autism Spectrum Disorders. In 2013 the autism community passed such a bill through the House with 105 votes in favor of the requirement and 7 against.

This will likely set up a showdown with the National Federation of Independent Business. Last month the NFIB asked the Joint Study Committee on the Affordable Care Act to pass legislation prohibiting the introduction of new insurance mandates in North Carolina for some period of time. The committee, acting with great haste, agreed to discuss this NFIB bill at a May 13 meeting. Coverage for Autism Spectrum Disorder is the only proposed insurance mandate eligible for consideration this year.

It would be jarring if Speaker Tillis touted his ties to the autism community in a campaign ad only to undermine the central policy push of Autism Speaks in his chamber. We will soon find out whether or not his commitment is bigger than a pin.

Politicians and members of the press are keenly interested in premium rates for Affordable Care Act Marketplace plans next year. Lawmakers want to use insurance prices as a cudgel on the campaign trail and the media knows that talk of premium spikes will attract attention.

That’s why reporters were interested in the announced enrollment statistics for Blue Cross and Blue Shield of North Carolina on Friday. The resulting coverage noted that BCBSNC enrollees were older and sicker than the company expected. In the race to make political hay out of these numbers there are a few points to keep in mind.

First, approximately 91 percent of ACA plan enrollees in the state receive a subsidy to purchase coverage. For this population premiums are capped as a percent of income. If, for example, you earn 150 percent of the federal poverty level then you will need to pay 4 percent of your household income for an ACA plan regardless of how premiums behave. Unless your income changes, you will pay the same rate next year.

Second, an older risk pool is not a major driver of premiums. Insurance companies certainly need younger and healthier enrollees to balance out payments for customers who use a lot of medical services. Still, as Kaiser Family Foundation has pointed out, even if insurers miss the mark substantially, this less healthy risk pool will only have a 1 or 2 percent impact on premiums. The primary drivers of premiums continue to be underlying medical costs and negotiated payment rates to providers.

Third, insurance companies have an interest in talking up their bad risk and steep medical costs. Insurance companies are, after all, companies. They want to set rates as high as the market will allow yet they also have to justify premium hikes to regulators. So, if they begin preparing the public for large premium increases the companies can then blame older and sicker enrollees for the requested boost in rates. Insurers also use the poor risk pool when negotiating with hospitals to explain cuts in payments for certain services. This is not to impute ill will to the insurance companies. It’s just how the game is played.

The risk pool mix, premium increases, and changing medical costs are all critical policy issues. We must restrain the rise in health care costs because, in the end, we all pay for our unnecessarily overpriced system. But when you hear that ACA Marketplace premiums will increase next year keep this context in mind.