Downtown Raleigh, the capital of North Carolina.
Providers worry and insurers are happy about North Carolina’s move to Medicaid managed care. Physicians and hospitals assert that the change, assuming that the Feds approve it, will reduce services for poor people and unfairly reduce money for providers.
Republican Gov. Pat McCrory last month signed legislation to move the state’s $12.7 billion Medicaid program serving 1.9 million residents from fee-for-service payments made directly to providers to capped payments to managed-care insurers. But the Centers for Medicare & Medicaid Services must approve the change before it goes into effect.
The bill lets the state award three statewide managed-care contracts to insurance companies and authorizes up to 12 regional “provider-led” entities to sign agreements with the state to manage Medicaid populations.
The governor said :“Under the current system, we wait until people get sick to provide care and pay for tests—not outcomes. This new system will focus on keeping people healthy and delivering care where it makes the most sense for patients. We’re going to accomplish this reform by paying providers based on improving patients’ health—not how many services patients receive.”
Providers had backed changing the program, but rejected turning to private insurers as the main vehicle for cost control, reported Modern Healthcare. “We’re concerned about the draconian ways (plans) try to control things,” said Robert Seligson, chief executive of the North Carolina Medical Society, told the publication: “Instead of a value-based medicine approach, they focus on financial returns. Wall Street is what drives them.”
Modern Healthcare reports that as the crackdown on high hospital pricing continues (including sky-high hospital “facilities fees”), the Office of the Inspector General of the U.S. Department of Health and Human Services “is using a congressionally mandated report to repeat its call for Medicare to pay hospitals the same as it pays ambulatory surgery centers (ASC’s) for low-risk outpatient procedures. ”
The policy change could save taxpayers and Medicare patients $15 billion over five years, the OIG estimates, but would require legislation letting the Centers for Medicare & Medicaid Services cut the rates for low-risk surgeries “without having to increase other payment rates to make the policy change budget-neutral as required by law.”
“The CMS also said the idea ‘may raise circularity concerns’ because ASC rates are based on a conversion factor from the outpatient prospective payment system for hospitals. Lowering those outpatient rates, that is, could affect the surgical center rates and create a kind of downward spiral.
Lowering those outpatient rates, that is, could affect the surgical center rates and create a kind of downward spiral.”
The CMS said that the Inspector General’s report didn’t offer clinical criteria “to distinguish which patients could be treated in ASCs rather than hospital outpatient settings.”
Experts applauded the Centers for Medicare & Medicaid Services’ “Next Generation” Accountable Care Organization (ACO) plan, which asks participants to take on more financial risk in return for more potential reward. The aim is to move away from fee for service to capitation as payers push healthcare industry toward a value-based reimbursement system.
“It’s a real effort to move away from shared savings or limited risk models. On both counts it’s an important step,” said Mark McClellan, M.D., a former CMS administrator, told FierceHealthcare.
Larry Kocot, a visiting fellow in the economic-studies program at the Brookings Institution, agreed. “I do think CMS should be credited for thinking creatively to extend the model to meet the needs of providers no matter what stage they are at within the ACO program,” he told the news service.
Farzad Mostashari, M.D., former national coordinator for health- information technology, told Clinical Psychiatry News Digital Network that the new model will likely suggest how CMS will structure other ACO’s. “This is directionally, absolutely where the Medicare Shared Savings Program (MSSP) is headed.”
“We are hopeful the changes they proposed and the comments received that they will make the MSSP program more accessible and more friendly to a number of providers,” said Kocot, who also served as a senior administrator of CMS.
FierceHealthcare reported that Kocot said he’d like the CMS to establish a ”fourth track that would lead to full capitation. He recommends tracks that reflect a continuum of ACOs that may begin with little risk and end with the full capitation model.”