Oversight Committee on Medicaid and NC Health Choice Update

The Joint Legislative Oversight Committee on Medicaid and NC Health Choice met on April 10, 2018.

Remarks from Dept. of Health and Human Services Secretary

Medicare Cost Sharing Payments

Sec. Mandy Cohen informed the committee that for most dual eligible beneficiaries, Medicare pays the majority of a claim, while Medicaid pays the portion that would be enrollee cost sharing.  She added that 2002 stage legislation created some changes in those calculations. However, DHHS has now created  a “percentage table” that will be used to simplify the cost sharing payment process. This new table will allow Medicaid payments to be calculated based on Medicare claims.

OIG Audit on Cost Sharing Payments

Sec. Cohen discussed that a 2017 OIG audit concluded that any claim not based on the full Medicare claim was paid incorrectly. Because of this, the OIG found an overpayment of $41 million. DHHS disagrees with the findings and believes the methodology was appropriate. CMS is currently reviewing the finding. If a demand letter is issued, DHHS will appeal.

Overview of Medicaid Dashboards

Steve Owen and Mark Collins from the NCGA Fiscal Research Division provided an overview of Medicaid enrollment. Non-Family Planning Enrollment in April 2018 was 4,577 lower than June 2017. They noted that the move to NCFAST has had operational impacts on trends and may still be having an effect. They added that there had been an increase in Medicaid spending of $10 million due to use rates.

Medicaid and NC Health Choice Enrollment

Dave Richard and Michael Becketts from DHHS, stated that Medicaid enrollment has tracked in line with DMA’s expectations to date. They added that March 2018 enrollment is 3.6% higher than last year.

Medicaid and NC Health Choice Financial Update

Dave Richard and Roger Barnes from DHHS, stated that Medicaid expenditures were 2.5% favorable to the authorized budget. They provided a distribution chart to compare FY 2017 to FY 2018.

1115 Waiver Update and Work Plan for Medicaid Transformation

Dave Richard and Jay Ludlam from DHHS, provided the committee with a timeline of Medicaid transformation. He gave a brief overview of each of the following policy paper topics: supplemental payments, network adequacy, benefits and coverage, care management, and quality. He noted that additional policy papers will be forthcoming. The Department is in continuous conversations with CMS and is making progress to move forward.

Efficacy of the Program for All-Inclusive Care for the Elderly (PACE) Study

Dave Richard from DHHS, explained that PACE is a capitated managed care program for frail, elderly adults who are enrolled in Medicaid, Medicare, or dually enrolled, or able to pay privately. PACE assumes all financial risk for the costs of services. He reccommended that the NCGA study the expansion of the Long Term Care Ombudsman program to assist PACE participants.

Audit Plans for County DSS for Medicaid Eligibility Compliance and Accuracy Standards

Dave Richard and Michael Becketts from DHHS, provided the committee with proposed accuracy standards which included the following

They noted that current legislation that describes a annual audit of all 100 counties would cost $11.2 million. They proposed an alternative plan that would rotate the county audits over a 3 year cycle with a vendor contract option ($1.6 million), or a permanent DHHS staff option ($2.3 million).

Committee Report

Jennifer Hillman from the NCGA Legislative Analysis Division presented the committee report.


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