New Hampshire: We’re in.
North Carolina: We’re not.
The two states on Tuesday were the latest to announce their intentions on the Affordable Care Act’s health insurance exchanges. States have until Feb. 15 to tell HHS whether they’ll retain even some control over the exchanges, or let the Obama administration run the exchanges for them.
And while New Hampshire made clear that it wants to partner with the federal government to launch an insurance exchange, North Carolina backed out of a previous plan to do exactly that.
By Friday, we’ll know where half a dozen other states stand, too.
Background on Partnership Model
The Affordable Care Act didn’t originally spell out the partnership model; under the law, states faced a binary choice of running their own insurance exchanges or punting the responsibility to the government.
But HHS officials realized they needed to tweak the ACA’s approach, as more than 30 states — increasingly led by Republicans, who took over 11 statehouses in the 2010 election — announced they planned to opt out of the exchanges altogether. This would leave HHS officials with “an awesome task in establishing and operating exchanges in [so many] different states and coordinating those operations with state Medicaid programs and insurance departments,” before open enrollment begins in October 2013, Paul Starr writes in The American Prospect.
As a result, the agency in 2011 introduced the partnership model in hopes of shifting some of the responsibility for running exchanges back to the states.
Under the hybrid approach, the federal government takes on setting up the exchange’s website and other back-end responsibilities, while states keep functions such as approving health plans and setting up consumer assistance programs. HHS also hopes that the partnership model will be a path for states that weren’t ready to run their own exchanges to take them over eventually.
It’s not quite time to publish the obituary for by far the most extensive patient-centered medical home (PCMH) network in the country, Community Care of North Carolina (CCNC) but it’s certainly time to spellcheck it. The HMO-friendly GOP controls the statehouse, a blistering audit on Medicaid management has just been released (with plans for a CCNC-specific audit in the works), and the state’s most influential media outlet has ”vindicated” those who were excoriated for daring to question it, such as me, to name one random person who has frankly obsessed with it. (This might explain why I never get invited to parties.)
By way of background, the state’s Medicaid agency initiated what might loosely have been termed an enhanced-access model almost 15 years ago, and have subsequently expanded their experiment into a full-fledged patient-centered medical home, which currently covers many disabled members, the large majority of the non-disabled adults, and most of the children.
This wasn’t just any old medical home – it was the “poster child” for the PCMH movement, even making it onto NPR. Here is the influential and literate Disease Management Care Blog on the subject:
It’s impossible it seems to read anything about the Patient Centered Medical Home (PCMH) and not run into Community Care of North Carolina (CCNC) as the ‘The PCMH Saves Money’ poster child. No power point presentation on the topic is complete without its mention, no Meeting Agenda is full if it’s not there, if you’re going to testify on the PCMH’s benefits before Congress, you should bring it up , the Commonwealth Fund is working hard to replicate it and it’s even embedded in Medical Home Wikipedia.
Further, North Carolina and states that wanted to adopt this model were given an unprecedented 9-to-1 federal match, reflecting the Obama Administration’s admiration for its success.
The ongoing saga of savings estimates for the Community Care of North Carolina (CCNC) patient-centered medical home (PCMH) is finally over. The verdict: no savings. Because the scale and visibility of the CCNC experiment are unparalleled in the Medicaid sector today, it is important that the right policy and delivery system lessons be learned from this dispositive conclusion.
Lesson 1: Enhancements in access do not necessarily create cost reductions, at least in Medicaid.
CCNC is by all accounts an excellent program from the patient’s perspective. Indeed, if I were a Medicaid recipient, I would want to live in North Carolina. The leadership of CCNC is passionate about the program and constantly strives to improve it. However, as was amply observed by J.D. Kleinke on this very blog last week, Medicaid recipients have many lifestyle and economic issues that even the best-intentioned and best-incentivized doctors will never be able to systematically address.
Lesson 2: Perhaps it is time to create an ER co-pay for Medicaid recipients that has more than one digit to the left of the decimal point.
Even as ER co-pays for commercial insurers have soared in the last decade, Medicaid ER co-pays remain virtually non-existent. CCNC created excellent reasons to use primary care but was not permitted to re-price the ER to economically encourage use of primary care. Many Medicaid recipients overuse the ER in part because it is basically free. For the CCNC experiment to truly have a chance to reduce ER visits now that they have created a worthy substitute with their PCMH, it’s only fair to them (and to taxpayers) to reconfigure the financial incentives so that people use their worthy substitute … and then re-measure savings.
North Carolina Medicaid recently reported, for the third time, using a third consulting firm, the achievement of massive savings through its patient-centered medical home (PCMH) program, now called Community Care of North Carolina (CCNC). Among other things, CCNC pays the physicians more money in order to encourage and compensate behaviors and processes, including enhanced access to care and case management, to hopefully reduce the need for emergency and inpatient services. (A brief summary of this and past consulting reports appear in the current issue of Modern Health Care. http://www.modernhealthcare.com/article/20120218/MAGAZINE/302189938/1140)
However, the third time is not a charm. Notwithstanding these consultants’ reports — which paradoxically support my contrary conclusions by choosing to ignore the overwhelming data contradicting their own claims – the program is a total failure as far as reductions in cost and inpatient utilization are concerned.
Fact #1: According to the Medicaid and CHIP Payment and Access Commission (MACPAC) report to Congress http://www.macpac.gov/reports, North Carolina is by a significant margin the highest-cost state per capita in its region for adult and for child Medicaid spending. These are the two categories in which the PCMH has been in place the longest. In the “aged” category, in which PCMH had barely been started when the MACPAC data was compiled (and would not affect medical costs noticeably because the state is a “secondary payer” following Medicare, and most Medicaid “aged” spending is custodial anyway), North Carolina is the lowest cost state in the region.