House proposal puts Medicaid cost overruns on healthcare providers

June 20 01:00 2014 by ushadmin

Lawmakers in Raleigh are now working out details in a reform plan for Medicaid. The governor and House Republicans want to move to a system where healthcare providers would be responsible for nearly all cost overruns in the future.

The way Medicaid works now is based on a “fee-per-service” system. A patient on Medicaid sees a doctor, the doctor treats the patient, the doctor bills Medicaid, Medicaid pays the doctor. Under the proposed reform, the doctor would be given a pool of money to treat the patient and provide him or her with the same, or better care. Once the set amount of money is used up, the doctor would pay for the patient’s care out of pocket.

Bob Seligson is CEO of the North Carolina Medical Society and supports the reforms.

“The move to a value based system is necessary to reform Medicaid in a sustainable way.” Seligson then adds, “The key to this new program is that it coordinates care and information and obviously improves the way and manner care is delivered.”

Charlotte Doctor Rhett Brown takes Medicaid patients. He is willing to take the risk of paying cost overruns because he believes putting doctors in charge of care means he will be able to do more preventive care saving huge amounts of money.

“The devil is going to be in the details of how this works out but we think that a provider-lead network can step up and meet this challenge,” Dr. Brown said.

Dr. Brown uses the example of someone with diabetes. Having a diabetic receive “deluxe-preventive care” in his office would cost hundreds of dollars. However, a diabetic needing to go to an emergency room by ambulance can cost Medicaid tens of thousands of dollars.

Medicaid cost overruns have left lawmakers scrambling to fill shortfalls over the years. Medicaid is a $13 billion program in North Carolina with 1 in 5 people receiving Medicaid assistance. The federal government pays two-thirds of the cost, and North Carolina picks up the rest. The Department of Health and Human Services will have to get federal approval before any reforms can take place.

House and Senate Democrats would like to see Medicaid expanded under the Affordable Care Act, but Republicans have said no.

The House and Senate must work together to get a budget they agree on before it can be sent to the governor’s desk to be signed into law. The budget should be finished by early July.