Article in today's Winston-Salem Journal
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mary ellen workman
Mary Ellen
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Susan Childs
Conor Brockett
The Senate released its budget last night. I haven’t read it all yet but here’s what I’ve gleaned so far:
· it DOES NOT implement Medicaid managed care.
· It DOES require DHHS to report details about how exactly it proposes to transition to managed care. The General Assembly clearly reserves the power to make the ultimate decision.
· It DOES include a shared savings plan that includes a 4% withhold on all payments to all providers and physicians, except primary care.
· It DOES NOT otherwise change physician payment rates.
· It DOES NOT include any specific tax reform proposals.
Senate Budget
Senate leaders on Sunday night released a $20.58 billion proposed budget for the 2013-14 fiscal year that they characterized as fiscally responsible while continuing to "streamline state government." The plan's revenue availability statement anticipates a $217 million tax cut, but the budget bill included no tax reform provisions. It did contain a Finance Section which read, "This section is reserved." The proposal showed no across-the-board pay increases for state workers, but does call for putting $10.2 million toward teacher merit pay in the budget's second year and would spend $1 million on state employee compensation study. It would significantly reduce the cuts to the University of North Carolina system called for under Gov. Pat McCrory's proposed budget, while moving major funding away from the state's pre-K program in favor of adding slots for subsidized day care. "This budget stands in sharp contrast to the failed attempts of previous leaders to tax, spend and borrow their way to prosperity," Senate leader Phil Berger, R-Rockingham, said in a written statement.
Overall spending in the plan would rise 2.3 percent over the current year's budget. While education spending would drop slightly, the state's Medicaid budget would continue to climb. A big part of the increase would come as part of a $434 million Medicaid "rebase," a reconfiguring of the costs of next year's budget based on unanticipated increases in cost in the current year. The budget bill includes a provision encouraging the McCrory administration to develop a reform plan for Medicaid, which the Senate leader's accompanying news release characterized as "a runaway federal entitlement program that is diverting funds away from priorities like education, transportation and our judicial system." The bill would cut the state Pre-K program by $12.4 million, leaving $52.6 million remaining for the program, diverting $9.8 million to expand enrollment for subsidized child care.
Other details of the plan include: a $24.4 million increase in the J-DIG business recruiting incentives, bringing total funding for the program to $51.8 million; elimination of the N.C. Center for the Advancement of Teaching; eliminates a flexibility cut for public schools while altering funding adjustments based on changing student head counts; changes Medicaid reimbursement rates for hospitals by creating regionalized payments designed to curb disparities in hospital billing; creates a new Rural Economic Development Division with the Department of Commerce; and consolidates water-related grant programs into a new Division of Water Infrastructure. Senate leaders planned a news conference for 10:30 a.m. Monday to discuss the budget proposal. Budget subcommittees planned to beginning meeting at 4 p.m. to take up portions of the proposal.(Scott Mooneyham, THE INSIDER, 5/20/13).
DHHS
North Carolina's top political leaders said Friday the state Senate will soon direct state agencies to begin crafting a proposal to tame the costs of Medicaid and improve patient care. The Senate budget, which is expected to be made public next week, will include an order for the state Department of Health and Human Services to prepare a Medicaid reform proposal by March 2014. The proposal will incorporate ideas from Republican Gov. Pat McCrory to give greater control to outside groups to manage the subsidized health program serving 1.5 million of the state's poor, disabled and elderly residents. McCrory has suggested choosing up to four outside organizations that would create medical provider networks and receive monthly payments from the state based on the number of patients served. The private companies or nonprofits managing care would cover expenses that go beyond the set allocations, which officials say will give them an incentive to improve patient health and give the state more cost certainty in a program that continually exceeds its budget.
Administration officials say the goal is providing comprehensive care while cutting down on unnecessary procedures and bureaucratic complexity. The Medicaid program spends about $13 billion annually, of which $3.1 billion this year comes from the state. The role of the public-private agency Community Care of North Carolina that currently manages doctor networks would be diminished, but the nationally recognized group could bid for a contract in the overhauled system. Critics say opening the door to profit-driven companies could shortchange patients. Doctors and some legislators fear out-of-state corporations would limit access to care and cut services to bolster profits. McCrory's plan will need approval of the legislature and the federal government. His administration hopes to begin implementing the overhauled system in July 2015. The Medicaid program is expected to need another $248 million to stay solvent this year and another $434 million during the new fiscal year starting July 1 to meet current needs.
Both Senate leader Phil Berger and House Speaker Thom Tillis, R-Mecklenburg, support Medicaid changes. Berger said yearly overruns are crowding out other programs. "Medicaid's out-of-control costs are undermining our ability to fund core constitutional obligations like education, transportation and our judicial system," he said.(Chris Kardish, THE ASSOCIATED PRESS, 5/17/13).