The N.C. House preliminary approved the latest Republican attempt to launch the state’s Medicaid transformation initiative Wednesday after he removal of a contentious segment of a related N.C. Senate bill.
The House voted 115-3 on its version of Senate Bill 808. The bill is likely to receive its third reading today, Thursday in Raleigh.
Earlier Wednesday, the House Rules and Operations Committee took out the potential for $18 million in monthly penalty payments to prepaid health plans.
The Senate approved its version of SB808 by a 43-5 vote June 17.
The N.C. Department of Health and Human Services would have been required to make those payments if the initiative isn’t under way by July 1, 2021. The launch date is being delayed from Jan. 1, 2021, in the bill.
The bill also was amended to raise from $25 million to $100 million the amount of federal CARES Act funding toward “periodic testing for surveillance and occupational safety, and the hiring of temporary staff to augment contact tracing functions performed by local health departments.”
Another amendment provides $20 million to the N.C. Division of Childhood Development and Early Education toward “various childhood initiatives” in response to the COVID-19 pandemic.
State Rep. Donny Lambeth, R-Forsyth, and a leading health-care expert in the legislature, said the bill represents “the driving of a stake ... to set a date” for starting the initiative.
The potential penalty payments in the Senate version of the legislation proved to be an obstacle for several House Democrats and faced the threat of a potential veto by Democratic Gov. Roy Cooper.
State Rep. Josh Dobson, R-McDowell, said Monday that the inclusion of penalties if a delay occurred was to make sure that “we have to have a way to make sure that this goes forward. There’s been a commitment (for Medicaid transformation) by this General Assembly since 2015.”
However, on Wednesday, Dobson told the rules committee the changes represent negotiations with DHHS officials.
“With the requested additions and requested deletions from the Department of Health and Human Services, the bill received positive comments from both Democrats and Republicans and unanimous support in Rules,” Dobson said.
“I’m as confident as I can be that the bill will become law,” although he acknowledged he doesn’t know how Cooper will respond to the current version of the legislation.
When asked if he believes the Senate will approve the significant changes, Dobson said, “Assuming no (more) changes, I am optimistic the Senate will agree as we have worked closely with the Senate throughout this process.”
The previous Medicaid transformation startup funding effort, contained in HB555, was vetoed Aug. 30 by Cooper, in large part because the bill did not contain any Medicaid expansion language that would provide health coverage for potentially 450,000 to 650,000 more North Carolinians. Likewise, SB808 lacks Medicaid expansion language.
Lambeth expressed his confidence that Cooper would sign the bill
SB808 would need at least 72 votes in the House to become veto proof, requiring the support of at least seven House Democrats at full attendance.
The proposed monthly payment of $4 million would go to the four participating statewide prepaid health plan, PHP, selected to provide certain insurance services — Centene (operating as WellCare of N.C.), AmeriHealth Caritas N.C., Blue Cross and Blue Shield of North Carolina and UnitedHealth Group.
A prorated amount of $4 million would be provided monthly to any regional PHP, or up to $2 million.
Dobson acknowledged Monday that while he “fully expects” the DHHS “will be able to go live” on July 1, 2021, “I think everyone knows the department has serious concerns with the penalty.”
DHHS officials could not be immediately reached for comment on the House’s changes to SB808
The DHHS said in a statement prior to the amendment changes to SB808 that “managed care is a massive shift for our hospitals, clinics, providers and our more than 2 million beneficiaries.”
“With the department and every part of our health care system responding to a global pandemic, establishing an unmovable date and imposing taxpayer-funded penalties is not appropriate during a pandemic,” the agency said.
State Sen. Ralph Hise, R-McDowell, said during the Senate floor debate that the PHPs “are losing in excess of $5 million a month” for the employees they brought online who are attempting to register individuals to select their plans.
The payment is designed “to compensate” the PHPs for revenue they were projected to earn.
Medicaid currently serves 2.22 million North Carolinians, or 21% of the state’s population. That number is projected to increase to 2.28 million by mid-2021 and 2.39 million in mid-2023.
About 1.6 million are scheduled to be enrolled in the new managed-care system under a federal waiver approved by the U.S. Centers of Medicare and Medicaid Services in October 2018.
Currently, providers are paid on a fee-for-service model administered by the DHHS.
By contrast, the proposed PHPs would pay health-care providers a set, or capitated, amount per month for each patient’s costs. The DHHS would reimburse the plans.