I am a primary care physician with over 20 years experience delivering care in the Army and to North Carolina’s Medicaid population, and currently run a pediatric clinic in Burlington. Governor McCrory’s administration has recently announced their plans to “reform” the state’s Medicaid program, with the primary change being a shift in delivery to “Accountable Care Organizations” (ACOs).
Unfortunately, there were no primary care physicians on the Medicaid Reform panel to explain the impact of the agreed-upon Medicaid Reform Proposal (MRP) on the care of patients. Few are aware that the reimbursement rates to Medicaid providers have not increased in North Carolina in over five years, and Medicaid already pays doctors significantly less than insurance plans for the same care. The rate is so low, that each time I meet someone from DHHS they profusely thank us for accepting Medicaid. My wife and I started our clinic to provide the best care for the underprivileged children in our area. We did not do it for the state, we did it for the children. The direct care of the Medicaid patients makes up only 18 percent of the total Medicaid budget. It is clear that the MRP focuses on the wrong area of Medicaid to decrease costs and harms the ones we are here to serve.
Readers would be interested to know that the language for the MRP comes directly from the Medicare Shared Savings/ACO program of the Affordable Care Act (Obamacare). It is not a North Carolina solution to our Medicaid problem, it is a federal one.
An Accountable Care Organization (ACO) discussion usually makes one’s eyes cross, but few understand what ACOs are. ACOs are artificial groups of practices, providers, and hospitals that are forced to join in a legal entity to deliver care to a population group. In short, ACOs are legally established entities complete with leadership, a board of directors, staffing, bank account, payroll, cash reserve fund, accountant, and tax returns. The costs of overhead and staffing the ACOs will only increase the cost to Medicaid without providing care to a single additional patient. The providers in the ACO care for their patients, and at year’s end, DHHS performs a complex calculation on the ACO’s patients to determine if the ACO spent too much or saved money per patient. Then, the ACO is graded on its quality performance. Finally, if the ACO saves money for the state, they receive a shared savings bonus. If they cost too much, they must pay a penalty.
On the surface, it sounds as if establishing ACOs helps to create proper incentives for providers to become more cost-efficient in delivering care. However, there are significant overhead and staffing costs involved to start an ACO that will overwhelm any potential savings and drive up the cost of care. The MRP allows ACOs to solicit financial help from non-providers to absorb the high cost of establishing the ACO and staffing it. This means health care management companies can step in to “support” the ACO, and will expect a financial return on their investment. In order to qualify for the shared savings bonus, the MRP mandates providers accomplish things that DHHS has failed to do, such as stopping Medicaid patients from overusing emergency departments, and makes the ACO financially responsible when they fail.
As a small business owner, I understand budgets and budget projections; otherwise, our clinic would have failed. It is impossible to analyze the MRP and believe there will be true cost savings. The up-front costs of setting up the ACO system statewide are tremendous, and no large scale cost/benefit studies exist. No private business would attempt such a plan given the faulty data that DHHS has provided over the past two years. DHHS missed their own Medicaid budget projection by $100 million dollars this year. NC Tracks, a new Medicaid billing system, was started so poorly that it nearly bankrupted most practices that accept Medicaid. In our county, Alamance, a 3,000 patient backlog waits to be enrolled in Medicaid. NC Fast, the new administrative enrollment system, was so badly implemented that North Carolina nearly lost $88 million federal dollars. In the past three months, our clinic’s Medicaid enrolled patient number was so inaccurate that we ‘lost’ 700 patients on our roster, but not in our clinic. Yet, this is the same enrollment number used to calculate the compensation or loss in the MRP.
In sum, the agency that cannot forecast its budget, enroll its patients, and accurately determine the number of its patients in each clinic will be responsible for calculating payment using flawed data. This is a recipe for failure. Further complicating a rollout of the MRP is the coincidental timing of the ICD-10 medical billing code rollout. Industry experts expect it to be a disaster.
Our clinic’s mission is to ensure the best outcomes in life for our patients. We strive to provide care to our patients in a cost effective manner. A review of our practice’s effectiveness has documented higher rates of preventative care, immunizations, and disease management than most other practices. Cost efficient practices have no incentive to join an ACO. We already do it cheaper and better. ACOs cannot save the state money if they are made up of cost efficient practices. Savings is based on forcing inefficient practices to become more cost efficient. That is why few outstanding practices and hospitals are interested in joining the ACOs across the country.
The MRP will be a takeover of the private practices in the state. Practices will be under the rule of another legal entity (ACO) which has no personal interest in the best outcomes of our patients. The ACOs’ true mission is compliance with government rules and profit. The MRP mandates that private practices join an ACO, and pay in money or in labor to run it. In return, the practice receives the ‘privilege’ of being enrolled to see Medicaid patients. If the practice refuses to submit itself to the control of the ACO program, the MRP advocates cutting rates to the provider. This is the equivalent of a pay to play scheme. It is clear that the ACO model from the Affordable Care Act could be renamed: Absolute Control Over providers. This is its unstated goal.
The MRP will most harm the population it is designed to serve – the children. Over 50 percent of childbirths in the United States are now covered by Medicaid. The MRP will force providers unwilling to submit their private practices to the control of the ACO to stop accepting Medicaid. This will have the outcome of separating our most vulnerable from their doctors. In order for ACOs to ensure they do not pay a penalty, they will be forced to limit care which will again harm those Medicaid was designed to serve. This has always been the drawback of Managed Care and is why so many horror stories exist.
Our legislature should understand that the MRP cannot provide budget stability. The start-up costs of ACOs will collapse the budget if the state contributes to the cost – which is likely. If the financial burden is placed solely on the practices, they will be forced to submit themselves to the control of a financial partner expecting a profit. Legislators should expect that in years 1-2 Medicaid costs will increase, in years 3-5 costs will decrease, and then costs will remain the same. However, the administrative costs of new personnel and third party administrator contracts will always continue to increase. North Carolinians should follow the money and see who profits from the MRP. Those pushing the hardest for a medical system takeover are usually the ones who profit from it.
What do I recommend doing? Contact your legislators and tell them to reject the MRP. Tell them to use information that already exists in Community Care North Carolina (CCNC) to identify outstanding providers that are delivering care better and cheaper. Solicit their methods to control Medicaid costs. If providers are costing too much, DHHS needs to work with them individually to decrease costs. Trust your Family Doctor, Internist, or Pediatrician. They are the experts who know how to fix our broken Medicaid system. The Affordable Care Act has given us health care that covers less people and is not affordable. North Carolina should continue to reject its provisions in the MRP. Otherwise, “if you like your doctor you can keep him” will have the same meaning for our Medicaid patients as it does for the rest of the country, and the most vulnerable among us will be harmed instead of helped.
David A. Stein, M.D.
Dr. Stein has been a Family Practice physician since 1992, and his experience includes 14 years in the Army health care system. Dr. Stein, along with his wife, runs the International Family Clinic (IFC), a private pediatric clinic in Burlington that serves nearly 6,000 children, of which 2,600 are enrolled in Medicaid.
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