Capitol Chronicle: NC Medical Society Sends Congress A “Protect Medicaid” Appeal

With cuts to Medicaid funding and coverage in the crosshairs on Capitol Hill, the NC Medical Society has issued an appeal to each of our US House and US Senate offices to protect the program which has 3.1 million enrollees in North Carolina.  Congress is seeking budgetary offsets for a proposed tax package and Medicaid has become a likely target as the debate ensues.

Below is the message issued to each of North Carolina’s congressional offices.

On behalf of the North Carolina Medical Society, our physician and physician assistant members, and the many Medicaid patients they serve, I am writing to express our deep concern over the looming cuts to Medicaid.  We urge members of the US House of Representatives and US Senate to preserve Medicaid as a foundational source of healthcare and security for the 3.1 million North Carolinians enrolled in the government-funded program.

In addition to our members and their patients, our state’s hospitals, community health centers, and long-term care facilities are also dependent on Medicaid for meeting the needs of the communities they serve.  Medicaid is the single most important source of financial support that keeps rural and safety net hospitals viable and assures nursing home bed availability for those with long-term care needs.  I’m sure you are aware of the hospitals that have closed in North Carolina’s rural communities due to financial instability and the access to care issues that have resulted.  There are others that are on the brink of closure and a reduction in federal Medicaid support could be disastrous for those facilities and the regions they serve.

Medicaid also ensures people with disabilities can access critical services and secure meaningful job opportunities. Additionally, Medicaid is a lifeline for those with mental health and substance use disorder needs.  It helps our working citizens stay healthy so they can maintain employment, feed their families and send their kids to school.

North Carolina’s Medicaid program has demonstrated its ability to effectively and efficiently fulfill its mission to the 1 in 4 North Carolinians that the program serves – 1.5 million of which are children.  It is a vital source for perinatal and maternal care with coverage of over 50% of our state’s births annually.  Medicaid allows mothers to deliver safely and children to have a healthy start to life; and as we continue to face a maternal mortality crisis, there is no doubt that cuts to Medicaid would exacerbate an already critical situation.

Over the past several months, our members have reached out to you and your staff through multiple communication channels, and many have traveled to Capitol Hill to share our urgent concerns.  We appreciate your and their receptiveness to the concerns we’ve presented and we want to again ask that you eliminate Medicaid as a source for offsetting the tax cut extensions that are under consideration.

In follow-up to our past communications and meetings and in consideration of the various possible targets to achieve Congress’ budgetary target, we want to reiterate several points of concern:

Work requirements

Implementing work requirements will place a financial burden on our state, especially at the county level.  Each county would take on the costly burden of verifying work status and the process of qualifying exemptions from the requirement.  Imposing work requirements on Medicaid recipients will not increase employment levels given that most working-age and able recipients are already employed. But it will create bureaucratic obstacles that will result in a loss of access to coverage and care.

Eligibility determination frequency

Making the redetermination of Medicaid eligibility more frequent will also result in an increased administrative workload and will drive up costs.  Administrative backlogs will occur along with delays in care.

Medicaid provider taxes

A significant portion of our state’s Medicaid funding is through provider taxes, which are paid by hospitals, nursing homes and intermediate care facilities. These payments generate more than $2.5 billion annually to help the state meet the non-federal share to fund the program.  According to NC DHHS, for every 1% reduction in the 6% cap on provider taxes, federal Medicaid funding received will be reduced by $1.15 billion.  Notable is that the providers who are paying the taxes agree that a reduction would be detrimental to meeting the care needs of our state’s Medicaid population.

Per capita caps on the expansion population

We recognize that a cap on per enrollee funding, regardless of the enrollment population, would reduce federal spending, but the resulting cost shift to the state could not be absorbed without significant, detrimental adjustments.  The options would be to reduce eligibility, reduce coverage and reduce provider payment rates.

Federal Medical Assistance Program (FMAP)

The NCMS was pleased to work with the NC General Assembly and the Governor in 2023 to get Medicaid expansion enacted for our state.  As a result of this bipartisan effort, our state has expanded coverage by 650,000 North Carolinians.  That has increased access to care and allowed for more preventive care and early intervention, and unnecessary trips to emergency departments have also been reduced.  Under Medicaid expansion, federal funding (FMAP) accounts for 90% of the program’s budget and the state covers the 10% balance.  The law which established Medicaid expansion in North Carolina, however, has a “trigger” provision whereby expansion in North Carolina will immediately terminate if the federal government modifies its share of the cost.  Should that occur, 650,000 North Carolinians would lose their coverage and among those that would be impacted are veterans and workers without employer-sponsored coverage.  Further, the incidence of medical debt is certain to rise as coverage declines or is eliminated.

Block grants

A block grant approach to funding Medicaid would provide a fixed amount of funding to states, which may not adjust adequately for rising healthcare costs or unexpected increases in care demand. This can lead to insufficient resources to meet the needs of Medicaid beneficiaries, especially the more vulnerable, including children, seniors, the disabled, and pregnant women.  Block grants do not account for the varying needs and the fluctuating costs associated with these populations and an underfunded block grant would result in states having to limit enrollment, reduce reimbursement for care and assume costs beyond their budgetary capacity.

If any of the Medicaid cuts and coverage modifications under consideration are implemented, North Carolinians will lose access to basic care and lifesaving services and the state will face budgetary deficits.  Medical practices, hospitals, nursing homes, and community health centers will also be forced to cut staff and scale back services. Some may not survive. In addition, services that allow seniors and those with disabilities to live independently at home will be cut or eliminated. Our state’s families and workers will be unable to afford essential care and get sicker. That loss in productivity will harm the economy as a result.  We therefore urge you to advocate for preserving Medicaid and not advance any proposals in the forthcoming budget reconciliation process that would reduce Medicaid funding and coverage.

I’d like to close on a couple of positive notes regarding Medicaid in North Carolina.

First, the NC Medical Society continues its joint venture with Centene Corporation and the NC Community Health Center Association, to improve the health status of Medicaid enrollees in our state. This ongoing work is being accomplished through Carolina Complete Health, the only Provider-Led Entity among the five Medicaid managed care plans in North Carolina, and the only plan of the five that is consistently top-ranked in metrics that NC Medicaid uses to measure health plan performance. One goal of that partnership is the broadest possible deployment of value-based models of care within Medicaid to simultaneously improve health status and experience of care for our enrollees, while reducing costs for the Medicaid program. This proactive and successful partnership exemplifies a value-oriented, team-based approach to meeting the health needs of North Carolinians.

Second is an accolade-worthy initiative of our North Carolina Medicaid program – the Healthy Opportunities Pilot Program.  This project, which launched in 2022 in three regions of the state, resulted in measurable savings and is a success upon which a statewide effort can be pursued.  In the program’s specified regions, health care savings were calculated to be $85 per person, per month.

It would be our hope that positive experiences and initiatives like these will serve as a solid foundation for our Medicaid program to continue to grow and improve, rather than being crippled by cuts and unable to meet its mission to meet the care needs of our state.

Thank you for your consideration and for your work on behalf of our state.

Cordially,

John J. Meier, IV, MD, MBA

President

North Carolina Medical Society