- Associated Press - Thursday, July 24, 2014

RALEIGH, N.C. (AP) - North Carolina’s Senate approved a Medicaid plan Thursday that will partially privatize how the program is administered in the state.

The Senate voted 28-17 for the plan that would create a new state agency to oversee and manage Medicaid.

The bill would carve out Medicaid regions in the state where both private, for-profit companies, called Managed Care Organizations (MCOs) and hospital-led health plans would compete for contracts to serve patients. The state would give health plans a set amount of money based on the number of Medicaid patients in the regions.

The Senate plan is radically different than the House ide to reform Medicaid, which is backed by Gov. Pat McCrory’s administration. The House plan keeps Medicaid within the department and would limit managed care to smaller networks run by hospitals and doctors.

Senate Republicans say their plan will finally give the state some certainty on how much the program will cost each year, and do it quickly.

“In just the past four years, this General Assembly has had to fill shortfalls totaling nearly $2 billion. That’s money that could have been invested in other priorities,” said Sen. Louis Pate, R-Wayne.

The measure goes well beyond what the House and McCrory proposed by allowing private managed-care insurance companies to cover patients.

“It creates a new state agency without clear directions and … creates uncertainty in the delivery in Medicaid services for the most vulnerable in this state,” said Sen. Joel Ford, D-Mecklenburg.

The measure also would extract the state Medicaid office from the Department of Health and Human Services, which has been criticized frequently over the years for oversight of the $13 billion federal-state insurance program for 1.6 million North Carolina residents. A seven-member board, rather the DHHS secretary, would control the hiring of a Medicaid director and its management.

“We create a board in place that puts a clear wall of separation between those who are receiving payments from the system and those who are making the decision as to what those rates should be,” said Sen. Ralph Hise, R- Mitchell, a key budget writer on Medicaid issues.

Every Medicaid recipient is supposed to be subject to the Senate’s model by mid-2018. Only a majority of the recipients would be under “capitation” in the House plan by mid-2020.

Those timelines are too fast, said Sen. Floyd McKissick, D-Durham.

“Whenever this General Assembly tries to jumpstart efforts and does it extraordinarily quickly…that quite frequently we make mistakes,” he said.

Lawmakers voted down an amendment that would have added Medicaid recipients to the Medicaid board, and another one attempting to again expand Medicaid in the state. North Carolina is one of 20 other states that chose not to expand Medicaid

Several medical industry groups oppose the Senate plan, saying it would result in reduced care for Medicaid recipients.

“Today the Senate had a clear choice between the health of our state’s most vulnerable citizens and the health of Wall Street corporations, and they chose the corporations,” said Robert W. Seligson, CEO of the North Carolina Medical Society, in a statement Thursday.

The bill, if given final Senate approval would return to the House, which would likely reject the Senate plan. A conference committee would have to be formed to create a compromise.

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