State Republican legislative leaders have announced their intent to push forward with a high-profile Medicaid initiative that stalled during the 2019-20 state budget veto dispute.

However, analysts and legislators don’t expect Senate Bill 808 to survive a veto by Democratic Gov. Roy Cooper.

“It is very doubtful that Medicaid transformation will be dealt with during this session,” said Sen. Paul Lowe, D-Forsyth. “It would be a long shot.”

The three Senate budget leaders said Tuesday that SB808 is one of their 19 bill priorities for the short session. The majority of those bills are focused on education issues.

“The intent in filing the bills now, before legislators have a clear revenue picture, is to signal to the press and the public as early as possible this session’s top funding priorities in the face of a multi-billion dollar revenue shortfall,” according to Sens. Harry Brown of Jones, Kathy Harrington of Gaston and Brent Jackson of Johnston.

The governor’s office could not be immediately reached for comment on SB808.

Cooper’s vetoes of the Republican-sponsored state budget and mini-budget legislation House Bill 555 came in large part because neither addressed expanding Medicaid to potentially 450,000 to 650,000 North Carolinians, a priority for Cooper.

According to the office of Senate leader Phil Berger, R-Rockingham, the $218 million in startup funds contained in the two vetoed bills would go toward patient enrollment-broker contracts, provider credentialing, data analytics and other program-design components.

“State law requires the transition of North Carolina’s Medicaid program to managed care,” said Mitch Kokai, senior policy analyst with Libertarian think tank John Locke Foundation.

“Lawmakers are obligated to try to get the transformation funded. This doesn’t mean that (the governor) and his Democratic allies will meet the obligation.

“It’s entirely possible that this issue will remain unresolved until North Carolina has a new governor or new legislative leaders,” Kokai said.

Rollout delayed

Implementation was halted indefinitely Nov. 19. The initiative was supposed to begin Feb. 1 in the Triad and Triangle and then statewide on June 1

SB808 would require the initiative to begin Jan. 1, 2021, allowing for enrollment on a regional basis at the start.

Dr. Mandy Cohen, the state’s health secretary, told a joint legislative oversight committee on Health and Human Services on March 10 that she could not say how long it could take to roll out the transition if/once the $218 million is provided.

At that time, Cohen would not rule out a late 2020 implementation when asked if the rollout would be delayed until 2021.

But Cohen and state Medicaid director Dave Richard have cautioned that “the longer the suspension lasts, the more work we will have to do to get us back to where we were in mid-November.”

DHHS said in a statement Wednesday that Cohen and DHHS “have been committed to Medicaid transformation, receiving national recognition for the innovative approach North Carolina was taking.”

“That said, in the best of times, transforming Medicaid to managed care was an enormous undertaking — the most significant in Medicaid’s 50-year history — for everyone involved.”

Citing the COVID-19 pandemic development since the March 10 update, DHHS said that “with the Department and every part of our health care system responding to a global pandemic, this timeline (of Jan. 1, 2021) is unreasonable.”

Rep. Donny Lambeth, R-Forsyth, said he expects the transformation initiative to remain “on hold by the governor and (Cohen) due to their efforts now focused on COVID.”

“The secretary cancelled all the contract employees working on transformation and would need to restart the full process.

“So, even if there were agreements to move forward, it would take close to a year to roll it out again,” Lambeth said. “A lot of time has been wasted and a restart is slow to get back on track

Insurers await word

Medicaid currently serves 2.22 million North Carolinians, or 21% of the state’s population.

That number is projected to increase to 2.28 million by mid-2021 and 2.39 million in mid-2023.

About 1.6 million are scheduled to be enrolled in the new managed-care system under a federal waiver approved in October 2018.

Managed care is a system under which people agree to see only certain doctors or go to certain hospitals, as in a health maintenance organization, or HMO, or a preferred provider organization, or PPO, health-insurance plan.

The proposed PHP — at the heart of the Republican-sponsored initiative — would pay health care providers a set amount per month for each patient’s costs. DHHS will reimburse the plans.

With the delay, the current fee-for-service model administered by DHHS remains in place.

DHHS has been preparing for a start-from-scratch redo, particularly if required by the Centers for Medicare and Medicaid Services to restart open enrollment period whenever it may begin.

Insurers have said they remain committed to the initiative.

However, one insurer — Centene — cautioned analysts Feb. 4 that the rollout delay could cost it at least $500 million in fiscal 2020 revenue. It is operating as WellCare of N.C.

The other approved insurers are AmeriHealth Caritas N.C., Blue Cross Blue Shield of N.C., and UnitedHealth Group.

Insurers chosen to provide prepaid health plans (PHP) had hired staffing for the rollout, only to let many of those employees go from lack of funding and work.

Richard acknowledged the readiness of the PHPs “will degrade” as staff leaves, insurers revisit their plans, and eligibility and enrollment data “get stale.”

Blue Cross said it is continuing to work with the state.

“We are working with the state to implement the best possible program and remain ready to serve North Carolina’s Medicaid population,” Austin Vevurka, a spokesman for Blue Cross, said Wednesday.

rcraver@wsjournal.com

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