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Odds passing quickly Medicaid changes, supporting expansion long at NC legislature in 2015

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RALEIGH, North Carolina — North Carolina lawmakers initially seemed eager last summer to hammer out quickly a solution to stop recurring Medicaid shortfalls by shifting the risks of cost overruns to managed-care organizations or provider networks.

Later, Gov. Pat McCrory's administration and House Speaker Thom Tillis hinted it was time to look at possibly expanding Medicaid to more of the working poor through President Barack Obama's health care law.

But heading into the new General Assembly session in January, swift passage of either now seems unlikely.

Stubborn differences between House and Senate Republicans over the vehicle to contain Medicaid costs resurfaced last week in a legislative study subcommittee, whose final recommendations offered no detailed pathway forward and received "no" votes from two key House members.

And legislative leaders remain highly skeptical of Medicaid expansion almost two years after the legislature and McCrory rejected federal funds that would pay to cover hundreds of thousands of uninsured people. North Carolina Medicaid serves about 1.8 million residents and spends $13 billion in federal and state funds annually. Some believe it's still too sickly for such a job.

"I think it would be impossible for us to expand Medicaid at this point," said Sen. Ralph Hise, R-Mitchell, a leader on a Department of Health and Human Services oversight panel. "It is feasibly impossible for us to even implement it."

Sen. Phil Berger, R-Rockingham, expected to lead the chamber for another two years, remains opposed to expansion. Meanwhile Tillis, who suggested during his successful U.S. Senate campaign to revisit expansion, is leaving for Washington.

His expected successor, Rep. Tim Moore, R-Cleveland, says he's unconvinced expansion makes sense. The federal law for now pays all the costs of the newly insured and at least 90 percent into the future.

"You then increase more people subject to an entitlement program with money from the federal government that could dry up tomorrow," Moore said in an interview last week. "So that's a pretty big gamble that I don't think the state should take."

The House and Senate passed competing legislation in June and July to shift Medicaid from a traditional fee-for-service model reimbursing providers for procedures performed to one that gives a flat monthly rate for each patient seen.

House GOP leaders wanted a phased-in approach with in-state hospital and doctor networks taking on patients. The Senate legislation wanted to go faster and invite out-of-state managed-care companies to participate, which the McCrory administration and state physician and hospital groups dislike.

There was no compromise reached. A proposal to return to Raleigh in November for a special session to work out a deal fizzled.

"There's not agreement on which direction to go, and there are, in all candor, strong arguments on both sides," Moore said.

Two joint House-Senate subcommittees on Medicaid are meeting this fall.

One panel focusing on Medicaid costs in its final report acknowledged rising costs in Medicaid and only mentioned reform goals. Another subcommittee on Medicaid governance agreed in principle the Medicaid office should be moved from the Division of Medicaid Assistance and overseen by a board, but details have yet to come.

McCrory, a Republican, said last week he'd be speaking with House and Senate leaders about Medicaid reforms as well as "other options regarding waivers from the federal government." That's a reference to potential expansion, although the governor hasn't said what he'll propose, if anything.

The conservative-leaning Americans for Prosperity urged supporters last Friday by email to tell McCrory to reject expansion. Some lawmakers say expansion should be left until after Congress attempts to change the health care law and the U.S. Supreme Court rules in a related case next summer.

Adam Linker with the North Carolina Health Access Coalition urged the legislature to pass a Medicaid overhaul and insurance expansion simultaneously, saying it would give struggling small hospitals more revenue. He pointed to plans from other governors in which federal dollars are used to enroll low-income residents in private health care programs.

Otherwise, "it just seems like the same old division between the House and the Senate," Linker said. "They really need a different plan that can bring them together."

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