NC lawmakers debate Medicaid privatization

RALEIGH (WTVD) -- The budget remains a point of contention with several critics across the state, including Medicaid customers.

One lawmaker who sponsored the Medicaid overhaul bill now says he won't support it.

When Representative Nelson Dollar, R-Wake, put forth House Bill 372 in March, he had big plans for a homegrown transformation of Medicaid. Now, that's all changed.

"It's not really a North Carolina solution," Dollar said.

He and his colleagues on Jones Street agree - North Carolina needs greater budget stability and to lower the long-term cost of healthcare. But, he aimed to put Medicaid directly in the hands of doctors, nurses, therapists, and hospitals.

"We could have done that with the people who are currently providing care for almost two million citizens, rather than bringing in outside companies who answer to their stockholders," Dollar said.

He's talking about private insurance companies that will now join regional networks of "provider-led entities," thanks to the Senate's revision of the bill. Provider-led entities are groups of physicians and hospitals that will hold contracts with the state to manage Medicaid.

Rather than the state paying unpredictable fees per hospital visit and procedure, it will cap its spending. The state will pay the companies a set amount per month, per patient, holding the companies liable to cover the rest.

"It's not a perfect bill but I think it's a reasonable bill that allows for the private sector to come in and provide services in terms of Medicaid delivery for people here in North Carolina," said Sen. Floyd McKissick, D-Durham. "And likewise allows hospitals to come together and establish groups that will provide these same services."

McKissick signed the final version of the bill and will vote for it next week.

"I for one want to make certain that we continue to provide a high level of service as we have today," McKissick said.

McKissick said the bill ensures companies can't pocket any more than 12 percent of the money, the rest must go to medical care.

However, Dollar said that's actually one of the bill's downfalls. Right now the state's system only pays providers 6-8 percent.

"This means that a larger share of Medicaid's money will actually go into the administration of the program as opposed to going to actual services for individuals," Dollar explained.

Dollar said once lawmakers pass the Medicaid Transformation bill, the state will need to enter lengthy negotiations with the federal government over the plan's structure.

The North Carolina Medical Society, which represents 12,000 physicians and physician assistants in the state, has opposed commercial insurers controlling Medicaid.

Bob Seligson, CEO, tells Eyewitness News in order to make reform achieve the goals that the legislature wants, i.e. sustainability and accountability, it has to be equally successful at providing quality care. That's something he said will be at risk when private managed care organizations, whose ultimate goal is to make a profit, take over.

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