Medicaid reform is our top priority this session, and dialogue continues at the General Assembly on what would constitute the most sensible approach to reform. The NCMS steadfastly supports accountable care organizations (ACOs) as the foundation of any change. Some legislators still insist that importing managed care corporations is the best option for the state and show a strong reluctance to maintaining “risk” of budget over-runs in the Medicaid program, favoring capitation instead of any shared savings approach. As the debate continues, the NCMS has outlined several guiding principles to help shape meaningful and sustainable change around the ACO approach. For instance:
- While cost reduction is an important goal, the primary goal must be improved quality of care for each Medicaid patient.
- ACOs are modeled on integrated care delivery. They empower physicians to work in teams with other providers to care for individual patients. This allows doctors, and all members of the team, to function at their fullest capacity for the good of their patients. ACOs incentivize everyone to work together.
- Since doctors have the clinical expertise to know what makes sense for their patients, physicians need to be included in the operational governance structure as well as the clinical governance structure. Legislators, government administrators and corporate bureaucrats do not know what makes sense clinically. We want to ensure physicians have a prominent place in improving Medicaid since they know what’s reasonable and how to achieve it clinically.
- Much discussion has revolved around whether—and how—to segment the state into regions to better track and administer a Medicaid program. Our position is that carving out exclusive regions in which certain providers would care for certain Medicaid recipients is counter to the idea of homegrown competition. We say, allow Medicaid ACOs to emerge in the same way Medicare has promoted ACOs nationwide.
- Finally, the linchpin to this whole scenario is data. To be successful, claims data and clinical data need to be side-by-side to make meaningful comparisons. Luckily, the tool to do this already exists in the NC Health Information Exchange (NC HIE). The legislature needs to continue to support the NC HIE.
We ask for your support to keep you, the physician, in the driver’s seat of care delivery in Medicaid by supporting shared savings and ACO reform models as an alternative. We also ask for your feedback. Please send your thoughts to NCMS Solution Center Specialist Belinda McKoy.
Projected State Budget Shortfall This Fiscal Year: $271m
Top state economists told lawmakers on Feb. 12 that they expect North Carolina will face a $271 million budget shortfall this fiscal year, which ends June 30. That represents a modest 1.3 percent deficit that state reserves and/or spending cuts can handle fairly readily. But its cause—lagging personal income tax payments (5.8 percent below budget projections) resulting from sluggish wage growth across North Carolina—is a signal that the state’s economic recovery is not yet as robust as anticipated, the economists told legislators.
However, with the state’s unemployment rate dropping now steadily, wages should start climbing during the next fiscal year, said the economists from the legislature’s Fiscal Research Division and Gov. McCrory’s Office of State Budget and Management. The state’s fiscal situation will be clearer by early May, after April’s final surge of state income tax payments have been recorded, they noted. For now, the disappointing state revenue receipts could make legislators less likely to consider much additional program funding, further significant tax cuts, or new or expanded economic-development tax incentives as they begin their discussions on adjusting the state’s $21 billion budget.
Meanwhile, the state’s revenue trends are positive, predicted to finish at a modest 2.9 percent growth rate for the current fiscal year—just not the 4 percent legislators expected when they adopted the budget last summer. And the budget picture includes some bright spots:
- Sales tax receipts are 2.3 percent ahead of expectations.
- Business taxes, including corporate income and franchise taxes, are up 5.7 percent.
Governor’s State of the State Address
Governor Pat McCrory delivered his State of the State Speech to the General Assembly on February 4. The Governor did speak about a “partnership with doctors” and making North Carolina “an excellent place for doctors to practice medicine.” Watch the 4-minute segment of his address, which focuses on health care.