Yesterday, the highly anticipated Medicaid Modernization Act or Medicaid reform bill was described as transformative, innovative and the dawning of a new day by members of the House Health Committee. During the morning meeting, Representatives Dollar and Lambeth explained that the aims of Medicaid reform are to produce long-term cost savings, budget predictability, as well as increased patient satisfaction and quality of care through building upon North Carolina’s current medical home model. House bill 372 will implement an accountable care organization (ACO) model by establishing provider led entities (PLEs) with a full-risk capitation payment method (providers will receive a risk adjusted payment per patient). This is a move away from the “traditional” fee-for-service payment model. Further, transitioning to ACOs and a capitation payment method is supported by CMS for Medicare as it promotes coordinated care and de-incentivizes providers from ordering numerous medicals tests and procedures that increase Medicaid costs. What is more, early results from Oregon, Colorado and Minnesota are showing cost savings for Medicaid ACOs. The Medicaid reform bill is positive in that it will build upon North Carolina’s current system and rely on the expertise and knowledge of Community Care of North Carolina. However, this bill has received some early criticism for being too similar to previous Medicaid reform bills, including carve outs for local management entities/ managed care organizations which handle dual eligible patients, and lacking clarity concerning how patients that do not select a PLE will be auto-assigned.
Despite the above mentioned factors that may draw skepticism from the Senate, we cannot say that the reform bill is a major movement forward as it does not include Medicaid expansion. The reform bill outlines that the new PLE model with full-risk capitation will cut spending growth by a minimum of two percentage points as compared to non-Medicaid expansion states. When referencing the success of states with ACO Medicaid models during the committee meeting – Colorado, Minnesota, New Jersey, Oregon, Massachusetts, and Vermont – representatives failed to say that these are states that also expanded Medicaid. In other words, North Carolina can expand and reform at the same time too. As the committee brought up issues of the economic feasibility of Medicaid reform, our policy makers are ignoring that Medicaid expansion will bring nearly $2 billion in federal funding per year to our state. More importantly, by expanding coverage, our legislators will move the conversation from business to people. There are 500,000 North Carolinians that lack access to affordable health care and 1,000 unnecessary deaths annually by refusing to extend health coverage to people in the coverage gap. Expanding Medicaid is transformative and innovative as it allows for reform while improving health care access and quality for all.