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Read the Fine Print: Medicaid


This article is part of a series lifting the veil on the numerous and profound changes to vital North Carolina programs and services made in the lengthy and wonky special provisions of the budget. We’re starting with the special provisions in the House budget and will continue when the Senate releases its version of the budget.

Special provision in focus: Health & Human Services

This special provision and the policy changes included can be categorized as:

A. Job Killer

B. Program/service elimination by disguise

C. “We didn’t do it!”, i.e. avoid responsibility for eliminating services by making state agency staff do it

D. Just plain sticking it to all those [insert type] people

E. All of the above.

Cutting more than $400 million from health and human services is especially shortsighted since it chops $2 billion from local economies once you factor in federal matching dollars. As with education, the slicing and dicing of the health budget is hidden from public view. With K-12 funding, budget writers press the painful decisions onto school districts. In Medicaid, House leaders shovel the job of cutting services off to the Department of Health and Human Services. It is inevitable that pregnant women, children, and the disabled – the primary populations served by Medicaid – will see services slashed.

When discussing the Medicaid budget it is popular for legislators to say that the cuts are not cuts at all. Rather, the budget reductions are about finding savings and creating efficiencies. Who could quibble with efficiency? One of the primary vehicles for savings in the House budget is a nationally recognized project called Community Care of North Carolina, or CCNC. CCNC gives physicians who take Medicaid a bonus payment to participate in the program. Then the CCNC physician networks operate as teams to deliver great care and reduce unnecessary tests and procedures. This approach saves money.

The trouble is that during the last several budget cycles lawmakers have relied on CCNC to help Medicaid find savings. The original House budget required that CCNC wring another $80 million per year out of the system. Then, when the budget bigwigs needed to add $20 million more into other priorities, they simply commanded CCNC to save $90 million per year.

When Medicaid is unable to achieve these chimerical savings then things will get ugly. The House budget gives the Secretary of Health and Human Services authority to rachet down the amount paid to physicians and hospitals that see Medicaid patients. Access is already a problem in Medicaid. If the state suddenly starts paying doctors even less to treat the pregnant women and children who rely on Medicaid then the number of providers enrolled in the program will dwindle. And if the desired budget savings still aren’t reached, then the HHS Secretary can start hacking off optional services in Medicaid. What are optional services?

If your state is going to offer Medicaid then the program must pay for certain services. These are called mandatory services. Hospital stays, for example, are mandatory services. Then there are additional procedures and programs the state can pay for through Medicaid, but it’s not required. These are called optional services. Don’t be fooled by the name, optional does not mean superfluous. Organ transplants, ambulance services, prosthetic limbs, prescription drugs – these are all considered optional. And these are some of the very services budget writers say HHS can eliminate if Medicaid does not achieve miraculous savings.

These are matters of life and death. To help close a budget hole Arizona recently pared back its optional services by eliminating several types of organ transplants. Lawmakers pushed to restore the services after people died from this drastic budget decision. House leaders in North Carolina will say that such a thing wouldn’t happen here. But that is exactly what their budget makes possible. After several years of wrecking the couch cushions, state agencies have found most of the hidden change. Efficiencies will now come from cutting services and imposing more pain on the people of our state who are suffering the most.

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Read the Fine Print: Medicaid