- Associated Press - Wednesday, July 2, 2014

RALEIGH, N.C. (AP) - The North Carolina House gave bipartisan support Wednesday to a plan directing the state’s Medicaid program away from the traditional fee-for-service model for medical providers to one supporters say will contain costs and improve health outcomes.

The chamber voted unanimously to tell the Department of Health and Human Services to develop a method by which medical providers ultimately would get a set amount of money for each patient they treat. A majority of the Medicaid population, currently at 1.7 million residents, would be treated under the model by mid-2020, according to the measure.

Forming hospital and doctor networks would focus on keeping medical expenses in check and helping keep patients healthy - thus providing an incentive to save money and generate income.

“They will take on an increasing risk for the delivery of medical services and the cost of those medical services,” said Rep. Nelson Dollar, R-Wake, the bill’s primary sponsor, during the debate on the bill, approved 113-0. The idea is a spinoff of Gov. Pat McCrory administration, which has sought an overhaul after annual Medicaid shortfalls of $375 million to $600 million in recent years.

After the vote, McCrory praised it as a way to bring cost certainty to Medicaid and urged the Senate to follow suit.

“We commend the House for taking an important step toward historic Medicaid reform that will create a more predictable budget for taxpayers, reduces waste and rewards health care providers for delivering quality, cost-effective care to patients,” he said in a release.

Senate Republicans, which rejected McCrory’s plan outright in its state budget proposal approved this spring, don’t believe the updated plan goes far enough. Chamber leaders have said any overhaul must remove the state Medicaid office from DHHS, suggesting the department is too big or unreliable to operate properly a Medicaid program that spends $13 billion in state and federal funds annually.

The Senate prefers to “separate out the Medicaid funds and get a sense of what’s being spent on Medicaid without the intermingling of every other agency” within DHHS, said Sen. Ralph Hise, R-Mitchell, a budget-writer on health matters. This year’s session is entering its final days.

The House plan has support from major health players in the state, including the North Carolina Hospital Association and the N.C. Medical Society, a physicians’ group.

The society had raised concerns about a version of the bill late last month that would direct one of the state’s public managed-care entities to also receive a fixed per-patient amount to cover both physical and behavioral care. The pilot was turned into a study. The society gave the bill unqualified support at the House Appropriations Committee earlier Wednesday.

The measure also received backing from Democrats, although Rep. Verla Insko, D-Orange, cautioned lawmakers from allowing DHHS to create a full-risk program that would allow a managed-care company to come in and focus on profits, not patients. The bill requires DHHS to release a detailed plan by next March and require progress reports every six months for several years.



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