House rejects Senate budget, passes Medicaid overhaul

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RALEIGH – In a relatively short floor session, The N.C. House unanimously rejected the Senate’s version of the state budget and passed its Medicaid reform bill 105-6. The two votes set the stage for intense negotiations that will likely last deep into summer.

Senators included their take on a Medicaid overhaul in their budget along with other policy measures. The House ran Medicaid Modernization (House Bill 372) through as a stand-alone bill. Both chambers agreed that the system is in desperate need of change. It currently accounts for more than 17 percent of the state budget.

“Medicaid consumes the lion’s share of our state budget. For the past few years it’s been the budget Pac-Man, eating up dollars that are sorely needed in other areas,” said Rep. Bert Jones (R-Caswell) on the floor of the House. “This bill we pass won’t be the final plan, nor will the Senate plan be the final plan. But regardless of what we do here in the General Assembly, the doctors and the patients will have to buy into if its going to work.”

Provider groups and insurance companies have a seat at the table in working out the details. Both the House and the Senate plans eliminate the system’s current pay-for-service model and instead pay providers a per-patient rate. Supporters say it incentivizes preventive care and healthy outcomes.

Management is where the chambers have differing opinions.The House creates a capitated, provider-led system while the Senate takes Medicaid out of the state Department of  Health and Human Services and puts an appointed board in charge.

“Management of the patient care will be the responsibility of the primary care provider,” Rep. Donny Lambeth (R-Forsyth) said of the House plan.

Rep. Nelson Dollar (R-Wake) has been working on Medicaid reform for years. He says North Carolina is uniquely positioned to be a national leader in designing an efficient and effective Medicaid system.

“States are challenged to operate a federal entitlement program, and that really is a challenge,” said Dollar. “This plan improves long-term outcomes, that’s critical. We can build on the outstanding foundation that we have in this state and the strengths we have in dental, skilled nursing, hospice, to name a few.  We have a award-winning system that is enviable among other states.”

In the House, Republicans and most Democrats agreed that the passage of the bill is a first step toward overdue reform, giving negotiators somewhere to start.

“Despite my concerns, I plan to vote for this bill because it will go to the Senate and a lot of heads will be put together and we will work in committee, look at all options and evaluate all ideas and present the best plan we can put forward for the healthcare of the most vulnerable people of North Carolina,” said Deputy Majority Leader Marilyn Avila (R-Wake).

More than 1.8 million North Carolinians are on Medicaid. The federal government pays about two-thirds of the cost and the state pays the remaining one-third.