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North Carolina’s health secretary is trying to get out of independent Medicaid expansion talks by appealing directly to Republican leaders and health care executives.
Letter from Cody Kinsley, dated September 3; Focused primarily on one component of the expansion — additional federal Medicaid funding — it convinced Senate Leader Phil Berger, R-Rockingham, and House Speaker Tim Moore, R-Cleveland, to end years of general opposition.
Kinsley said North Carolina — one of 12 non-expansion states — could receive up to $8 billion in federal funds for Medicaid expansion.
The main turning point for North Carolina is a $1.5 billion federal epidemic relief bill within two years of accepting an expansion of traditional Medicaid patients and, more importantly, agreeing not to impose rules on enrollees.
That general fund will direct the N.C. dollars to other priorities. The Department of Health and Human Services exempts. $1 billion will be used to address substance abuse and mental health.
Kinsley cited the need to pass some Medicaid expansion by Sept. 30, or risk losing a major portion of federal funds.
“Given the enormous pressure on our health care system – especially in relation to mental health – it is urgent to pass legislation to expand Medicaid and establish the Health Care Access and Stabilization Program (HASP) so North Carolina can benefit from additional federal” funding, Kinsley wrote.
According to the NC Healthcare Association, HASP “allows North Carolina hospitals and health systems the opportunity to receive up to $1.8 billion in federal dollars to improve access to care for Medicaid patients.”
“The Health Care Access and Stabilization Program will cost the state nothing and provide up to $60 million to the NC General Fund as long as the program is approved by CMS.”
“Failure to act in September will have serious health and financial consequences,” Kinsley warned.
Berger and Moore said they have time to reach an agreement on Medicaid expansion in their bills this year.
It may also take trying to reach a compromise in the 2023 session, with a different legislative composition more or less inclined to support the House or Senate Medicaid expansion bills.
Three main reasons
Kinsley made three main points in the letter.
“It will take at least three months after expansion and after HASP is signed into law before anyone has coverage or financial benefits flow to North Carolina,” Kinsley said.
“Once in place, North Carolina will spend more than $500 million a month at no cost to North Carolina taxpayers. Passing legislation in September may be our last chance to live on this calendar.”
The second issue is that North Carolina risks losing a $187.5 million “signing bonus” over eight quarters if the extension is effective through Dec. 31. The state’s general fund would get an additional $562.5 million in that scenario.
The third part is a warning that if the expansion isn’t passed by the Legislature by December — which appears to be the preference of Moore and other Republican House leaders — the expansion’s benefits and programs won’t begin until April.
Several analyzes have cited between 450,000 and 650,000 North Carolinians as likely to benefit from the Medicaid expansion.
Medicaid now covers 2.71 million North Carolinians, an increase of 27%, or 588,611, since the outbreak began.
Eligible under the expanded program are those ages 18 to 64 who earn too much to qualify for Medicaid coverage, but not enough to purchase coverage through the private insurance marketplace.
A large portion of enrollees may be eligible for expansion coverage in the event of an outbreak.
If the Medicaid expansion doesn’t happen until April, “thousands of North Carolinians will lose their health coverage because their temporary Medicaid eligibility will expire at the end of the federal public health emergency before they are covered under the expansion,” Kinsley said.
“This will cost rural hospitals and other safety net providers a lot of revenue. Plus, the state’s general fund will only receive one of the bonus payments.”
Kinsley emphasized that DHHS “is poised to ensure a smooth and efficient implementation built on the General Assembly’s managed care platform.”
“But there is still some work we can do until the legislation is passed. Additional work, such as updating the eligibility technology system, communicating with Medicaid beneficiaries and training county social service workers, requires certainty.”
Timeline content
Both Berger and Moore appear content to allow Medicaid expansion negotiations to progress next year.
The NC Hospital Association’s goal is to urge political leaders to reach an agreement on Senate Bill 408 and House Bill 149 by the end of the year.
Both bills were subject to a gut-and-replace strategy. That happens when one chamber passes the amended bill by inserting the language of the earlier bill into the bill and sending it back to the first chamber for approval.
In these cases, the House has submitted the Medicaid expansion legislative choices to SB408, and the Senate to HB149.
Although both amended bills cleared one chamber in June, those changes were rejected in the original House, which sent HB149 and SB408 to subcommittees for negotiation.
Highlights of SB408 include saving rural hospitals and setting a Dec. 15 deadline for DHHS to submit a report to the Joint Oversight Legislative Committee to develop a Medicaid modernization and savings plan.
“We need to know exactly what we’re getting in terms of cost-effectiveness,” Moore said, in terms of Medicaid expansion, especially expanding access to health care providers. That way, we’re sure… and the last word.
If the Legislature’s oversight committee approves the plan in December, Moore promises that SB408 will soon receive an up-and-down vote.
Meanwhile, HB149 — to expand Medicaid — contains many of Senate Republicans’ long-sought health care reforms, most notably weakening the state’s certificate-of-need laws that appear to be a major roadblock in the House.
The bill also allows nurse practitioners, certified nurse midwives and other providers to work independently of doctors.
“The Senate has already passed Medicaid expansion and HASP,” Berger’s office said in a statement Friday.
“While Sen. Berger was not actively involved in the negotiations, it is our understanding that discussions about Medicaid expansion, packaged with other health care reforms, will reduce the actual cost of care.”
Lambeth view
Rep. Donnie Lambeth, R-Forsyth, a leading authority on health care issues, said the possibility of losing some federal funding for expansion is “worrisome.”
“But my point is that the feds really want North Carolina in the expansion column, and we have to negotiate that as a condition of expansion,” he said. “I believe CMS North Carolina NC needs a new federal program more than it needs. Time will tell.”
“He’s done a great job of providing some critical information as lawmakers evaluate Medicaid expansion,” Lambeth Kinsley said.
“He is focused on maximizing his impact for citizens like me in North Carolina who need help with health care and affordable coverage.”
However, Lambeth emphasized that the two councils are “way out of the agreement”.
“The House and Senate would prefer a clean Medicaid expansion bill and policy statement without more complicated policy issues like the CON amendment,” Lambeth said.
“So I don’t think these significant differences can be reconciled this month or this year. It’s probably going to be a long-term issue.”
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