Proposal calls for moving Medicaid to independent board

The legislation, which will be heard next week by the Program Evaluation Committee and could then be introduced when the General Assembly reconvenes in two weeks, proposes creating a Health Benefits Authority to manage Medicaid, the health insurance program for the poor and disabled. The authority would be housed in DHHS but would be headed by an independent eight-member board.

The authority board would include DHHS Secretary Aldona Wos and seven experts appointed by Gov. Pat McCrory and legislative leaders, and they would be paid up to $125,000 each. If the General Assembly approved the plan, the shift would occur Oct. 1.

State lawmakers would give the authority a set amount of money each year to manage the Medicaid program. Sen. Ralph Hise, R-Mitchell, said the move would increase accountability and make the state budget more predictable.

"This actually changes the budget of Medicaid from being this entitlement that we just have to fill to an amount like everything else in state government, where we set a spend for Medicaid and are assured that an agency and department will stay within their spending," Hise said.

The board would be required to keep Medicaid costs within that budget. If necessary, the board would have the power to reduce the rates doctors and hospitals are paid by Medicaid or to cut the services the program provides. That's what happened in Virginia when that state went to a similar authority system.

"When the appropriated budget doesn't control for all growth or all operations, every state agency, including education and others, have to make cuts to come within that budget," Hise said, noting that Medicaid should be held to the same standard.

Rep. Verla Insko, D-Orange, pointed out that the board would actually be less accountable to people who rely on the program because the members are not elected officials, and much of what they would do would be conducted behind closed doors.

"You pay a big price when you cut Medicaid – people actually die," Insko said. "When we have an economic downturn, it's reasonable to expect that we'll have a big increase in Medicaid. But if we're trying to hold the budget level, then that would mean we would be cutting services or somehow saving money (by) reducing rates."

Medicaid Director Dr. Robin Cummings said he has real concerns that adding an oversight board would slow down changes DHHS is already making to streamline the program and cut its costs.

"It's very, very important that we get this right," Cummings told lawmakers. "We need a North Carolina solution."

Still, he said he supported ideas contained within the legislation, such as bringing more continuity to the management of Medicaid and creating a reserve account to absorb cost overruns.