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North Carolina Senator Phil Berger
The state’s lobbying group for health-care systems and hospitals has called out state political leaders for being willing to let Medicaid expansion “die because you are looking for a deal.”
Steve Lawler, president and chief executive of the N.C. Healthcare Association (NCHA), sent his letter Friday to Democratic Gov. Roy Cooper, Senate leader Phil Berger, R-Rockingham, and House speaker Tim Moore, R-Cleveland.
The association is running this weekend a full-page ad — an “Open Letter to North Carolinians” — in the Winston-Salem Journal, as well as newspapers in Asheville, Charlotte, Durham, Fayetteville, Greensboro, Greenville, Raleigh and Wilmington.
The association’s goal is to urge the political leaders to reach a compromise by the end of the year on the two Medicaid expansion bills that cleared one chamber during June, but has not been addressed in the other.
Such Medicaid expansion legislation could benefit between 450,000 and 650,000 North Carolinians.
Both Berger and Moore have cited a preference to attempt a compromise in the 2023 session, which will have a different legislative composition that could be more or less inclined to support the House or Senate Medicaid expansion bills.
Senate Bill 408, which includes Medicaid expansion, was approved by a 102-6 vote in the House on June 28 after the House made major changes to provide what Moore considers as a more streamlined expansion initiative. The Senate has not acted on that amended bill.
The Senate passed a bipartisan, multi-layered health-care bill in the revamped House Bill 149 by a 44-1 vote on June 2. The House has not acted on that amended bill.
In exchange for expanding Medicaid, HB149 contains several long-sought Senate Republican health-care reforms, foremost weakening the state’s certificate-of-need laws.
The bill also would permit nurse practitioners, certified nurse midwives and other providers the ability to work independently from doctors.
Berger said when he introduced the revamped HB149 that “if there’s a person in the state of North Carolina that has spoken out against Medicaid expansion more than I have, I’d like to meet that person. We need coverage in North Carolina for the working poor.”
The NCHA, as well as the N.C Medical Society and the Old North State Medical Society, prefer the version of SB408 in large part because it has a much lower financial and regulatory impact on health-care systems and hospitals.
Lawler said the NCHA “hopes to see the General Assembly accomplish Medicaid expansion and adopt the much-needed Healthcare Access and Stabilization Program this year.”
“They are both important to the state, and should not require a trade or a change in policy that would likely have negative downstream impact on hospitals that are crucial to the state’s safety net.”
Lawler stressed in his letter that NCHA members “are not elected to office, and therefore we are not the ones standing in the way of passing legislation. That burden, and opportunity, lies with your branches of government.”
“Both options are essential as we continue to grow and prosper as a state. Both options are too important to let die because you are looking for a deal.”
In the ad, the NCHA said “we are not politicians. But, we are advocates and champions for Medicaid expansion.
“Tell your legislator in Raleigh to stop playing politics with Medicaid expansion and to pass Senate Bill 408.”
After vetoing the state budgets for 2019-20 and 2020-21 — in large part because they did not include Medicaid expansion legislation — Cooper cited the progress made on the Medicaid expansion bills when signing the 2022-23 state budget bill.
“While it does not include Medicaid expansion, the leadership in both the House and Senate now support it and both chambers have passed it,” Cooper said on July 11.
“Negotiations are occurring now, and we are closer than ever to agreement on Medicaid expansion, therefore a veto of this budget would be counterproductive.”
Moore has signaled since the Senate passage of the revamped HB149 that there is little expectation the chamber will take up the bill this year.
The key elements of SB408 are helping preserve rural hospitals and directing DHHS to develop a Medicaid Modernization and Savings Plan with a Dec. 15 deadline for filing a report with a joint oversight legislative committee.
“We need to know exactly what we’re getting” from Medicaid expansion, particularly in terms of expanding access to health-care providers “in a manner that is cost-effective,” Moore said, “This way, we have certainty ... and the final say.”
If the legislative oversight committee approves the plan in December, Moore had pledged that SB408 would receive an up-and-down vote soon after.
“We believe this bill will help address some really critical needs while being fiscally responsible to taxpayers and without incentivizing a person not to get a job,” Moore said, citing a potential work requirement for eligible enrollees.
HB149 contains a controversial work requirement pushed by House GOP leadership in 2020-21 that has been stalled in several federal courts in terms of its constitutionality.
Meanwhile, Berger said in a statement following the introduction of the revamped SB408 that “the House has gone from ‘No,’ to ‘Let’s study it again.’ It is past time for action.”
Berger said Friday that the NCHA “is lobbying against the Senate’s bill because it includes necessary reforms to increase competition and drive down costs for patients — cutting into the massive profits hospitals make.”
“The bill the NCHA is advocating for doesn’t expand Medicaid; it only further lines the pockets of the hospitals.
“I remain committed to passing the Senate’s expansion bill so we can improve access to health care for all North Carolinians.”
Hospital cooperation was cited last week by Cooper spokesman Ford Porter in comments to AP when he said “it’s positive that both chambers now support expansion, and right now hospitals hold the key to getting this done.”
Lawler said that “Medicaid expansion should not come with strings attached that would jeopardize the future for hospitals, our state’s health-care safety net.”
“Hospitals should not be a political trading card to satisfy an ideological position, or a deal made with a powerful lobby group. We must be held harmless from unnecessary trades.”
Some House Republican leaders, including Rep. Donny Lambeth, R-Forsyth, have said they prefer that a joint oversight legislative committee complete its work this fall and make recommendations in December before voting on HB149.
The committee held several meetings before the start of the 2022 session as part of a 2021 state budget compromise reached between Cooper and Republican legislative leaders.
“The Access committee did great work, but that committee did not finish its work or make a recommendation to the General Assembly. That committee needs to finish its work,” Lambeth said.
Medicaid covers 2.71 million North Carolinians, which increased by nearly 27% or 588,611, since the beginning of the pandemic, according to the state Department of Health and Human Services.
Those who might be eligible under the expanded program are between the ages of 18 and 64 and earn too much to qualify for Medicaid coverage, but not enough to purchase coverage on the private insurance marketplace.
A sizable portion of enrollees during the pandemic likely would qualify for expansion coverage.
North Carolina is one of just 12 states, most in the Southeast, that have not expanded their Medicaid programs.
Many states with Republican leaderships have accepted Medicaid expansion, including Indiana when former vice president Mike Pence was governor.
The NCHA letter and ad campaign was prompted in part by the legislation changes made by Senate Republican leadership in HB149.
Those officials inserted several Republican-sponsored health-care reform elements into the bill, foremost on certificate-of-need laws that have drawn objections from the state’s not-for-profit health-care systems.
Those certificates are required from state health regulators before providers can build new health care centers or add certain equipment. The goal of the CON process is limiting unnecessary duplication of services in a community.
HB149 would change how the state handles requests for new medical services and equipment.
Not-for-profit hospitals worry that change would allow large for-profit groups to offer only more lucrative services, leaving not-for-profit systems to treat the sickest patients, likely without health insurance, who come into emergency departments.
Sens. Joyce Krawiec, R-Forsyth, and Ralph Hise, R-McDowell, have said that easing CON laws to allow competition from for-profit groups for ambulatory surgical centers and equipment could serve to lower the cost to patients of many elective and outpatient procedures, such as knee replacement and colonoscopy.
The quid-pro-quo nature of HB149 reflects the reality that few, if any, of the Senate Republican health-care reform elements could advance to a House vote in a standalone bill.
The NCHA defends CON laws by saying “hospitals do not operate in a traditional free-market environment” that CON opponents want to establish in North Carolina.
The NCHA has warned in that scenario, health-care costs would go up for most patients since there would be a greater likelihood of hospitals absorbing more bad debt — patients choosing not to make payments who can afford them — and increased demand for charitable care write-offs.
“Modifying the current CON law would hurt the stability of rural hospitals by carving out elective and outpatient procedures, which are the lifeblood of community hospitals, while allowing niche medical organizations without such federal regulation to cater to commercially insured patients.”
Lawler said the NCHA opposes the language in HB149 that “is asking hospitals to fundamentally change a business model that helps subsidize mission-essential health-care services in communities across the state.”
The state’s major health-care systems and hospitals have agreed to pay — through an estimated annual $758 million assessment — North Carolina’s 10% share of administrative expenses from Medicaid expansion. The federal government pays the other 90%.
“Hospitals have supported Medicaid expansion since the first opportunity arose over a decade ago,” Lawler wrote.
“For these 10-plus years, (hospitals) promised to help with the details if the General Assembly and the governor reached an agreement.
“Not once have they said no to expansion, even when told that they would be responsible for fully funding the non-federal share of expansion.”
A pivotal turning point for both Berger and Moore on their Medicaid expansion stances is enabling North Carolina to gain access to about $1.5 billion in federal Medicaid expansion funding over a two-year period.
That would free up DHHS to re-direct General Fund dollars to other priorities; $1 billion would be used to address substance abuse and mental health.
The proposed work requirement for new Medicaid recipients has received grudging support from some Democratic legislators.
The federal relief law would provide North Carolina $1.5 billion over two years to treat traditional Medicaid patients if it accepts expansion and, most important, agrees to not put stipulations on enrollees.
The federal Centers for Disease Control and Prevention under the Biden administration has denied Medicaid expansion waivers from several states, such as Arkansas, Georgia, Michigan, New Hampshire and Texas, that would have required new enrollee to pay a monthly premium and/or meet a work requirement.
Legislative fiscal research analysis staff have told legislators they did not believe North Carolina would be eligible for the relief money if HB149 contains the work requirement provision.
Berger said May 25 the plan is to pass HB149 with the work requirement included, “and then we’ll deal with whether or not we can convince the Biden administration or the courts that this is the right thing to do.”
Berger said that, while the work requirement is being litigated, unemployed enrollees would remain eligible and not be denied.
Lambeth cited the work requirement language “does need some work before the House would take it up.”
“The work requirement is not likely to be approved by CMS. That is what they have signaled to us.
“So, we should shift to an optional jobs-training program, which many states are now using in lieu of a work requirement.”
On Friday, Lambeth said that NCHA “is well intended” with the ad campaign.
“They are documenting here what they have been saying for sometime. I know they probably feel good in putting something in writing and documents their position on Medicaid, but I don’t believe it helps or hurts.
“These are obviously difficult and far reaching policy issues, many àre interrelated and take time to work through.”
The recent Berger comments calling out NCHA opposition to HB149 has placed hospitals “in a defensive posture,” said John Dinan, a political science professor at Wake Forest University who is a national expert on state legislatures.
“They have been portrayed by some officials as a key obstacle to Medicaid expansion, on account of their opposition to a number of non-Medicaid policy changes that are currently included in the Senate’s main Medicaid expansion bill,” Dinan said.
“Senate leaders have maintained (those reforms) are essential if Medicaid expansion is to pass.
“So, this letter and ad campaign can be seen as hospitals’ effort to mount a response ... by stressing their support for a clean Medicaid expansion bill” in SB408.
Mitch Kokai, senior policy analyst with conservative think tank John Locke Foundation, said that “it’s important to understand the context of this letter and ad.”
“Cooper suggested, as have legislative leaders, that hospitals have put up the largest roadblock to expansion in recent weeks because they are unwilling to give up state regulations that have protected them from competition.”
“Now, the hospitals are offering full-throated support for the House’s Medicaid plan, which would kick a decision about expansion down the road to a later date.
“More important for the hospitals, the House plan would do nothing to threaten hospitals’ chokehold on the certificate-of-need process.”
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North Carolina Senator Phil Berger
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