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House | June 18, 2015 | Committee Room | Appropriations

Full MP3 Audio File

Everyone will take, every one will take their seat I think we've enough present I call the meeting as the house appropriation to order, and wanted it before we started this morning before to just have a moment of silence for the incident that happened in, and the lives lost and trust if you would just take a minute and bow your heads. Thank you. Understand that one of those killed is a peer in another state Sir, thank you, and if you can remember them today that will rely be a help for them that the only request they made is that, we remember them, and pray for them today. now I will introduce our sergeant of arms we have Colton Adam, Young bay, Walren Walkins, David Liten, Bill Morris, Mather Garison, Charles Goodwin and David [xx]. We have some pages with us today if you stay, so the, when I your names so that we can recognize who you are, [xx] she is from Halifax County and Micheal Ray she is her Representative, Megan Dier, he's from Johnston County and speaker Morris her sponsor, Mathew Linner is that correct from Mecklenburg Representative Lire [xx] sponsor thank you. Wiel Miller from Wake County Representative Avalovich, she is in finance, she will be with us in just a moment Nataly Monson, she is from Orange county and Representative Meyers her sponsor. Thank so much, I want you to pay attention today, this is a very controversial issue in the general [xx] not necessarily in the house, the house is pretty agreeable on this, we have a PCS today, PCS for house bill 372, we have a motion to have the PCS for house bill 372 before us, all those in favor will say I, I! Those oppose no and the the bill house bill 372 is before us, medicaid modernization and we have two sponsors today that will be Chairman [xx] and Chairman [xx], we have Representative Brown and  Representative John. Representative Doyle you have the floor. Thank you Madam Chair, members of the committee. We got my self Representative Lambeth and I want to make sure to particularly give a shout out I suppose, to Representative Lambert, because he has been working with providers from all over the state, a variety of groups, he's and everybody that has tried to meet with him and is going to be meeting with more people, as we move forward in this process, and it is a process with respect to reform of our medicaid program, and he has also worked with a number of senators and others that are concerned we will continue to reach out, one of our other prime sponsors, of cause is Representative Jones he's in finance this morning, and our 4th prime sponsor is Representative Dan Brown and we very much appreciate his expertise and assistance in putting up this bill together to. What we thought we would do is try to do a very quick slideshare thing that I put together just to lay a little bit of the groundwork on medicaid for those of you who don't know it, and believe me this is just very service oriented, medicate this like onions, they just keep growing every time you peel off some layers,  think you understand something you find out something else that you didn't

know, and that you thought you knew, maybe it's different. So it's a challenge for everybody and not just for North Carolina but, I'm trying to run through this as quick as I can and what we want to do is to go over just the basics sections of the bill and respond to any questions a number of put available[sp?] to you that Chair may want to recognize as time allows for them to speak their support for this, and we'll make sure we're all gone before the chair gabbles us out so house bill seven, 372 medicate basics. Medicaid is an entitlement program, it is administered by the federal government, and the state government to provide services for low income come a lot of these are moms, children as you'll see in just a moment. Currently we have approximately about 1.8 million Medicaid recipients those are full time and partial recipients [xx] state we're roughly the 10th largest state and union so that sort of matches up. The federal government matches Medicaid, those matches vary from state the state and in within the state it varies. We're at roughly 65% to our or about 2/3 for most of our services administrative matches usually about 50% although some things are matched 90% it really varies and the total program costs federal reinstate is roughly 14 billion dollars of which about 3.7 billion or so is the states portion of that. This is just a breakdown of who is being served roughly in this numbers shift, but roughly 60% of our children, about 1/4 are age blind and disabled and good deal of their services are provided through LMEMCO's we'll talk about that more in a minute, pregnant women and [xx] temporary assistance to needy families if you want to know what TANF is, okay. This is one and some of you may have seen this I don't know why this green shade is on here, we couldn't quite figure that out but anyway, that's where we're at. But this is one that you may have seen before you roughly have 1/3 of the recipients that make up 2/3 of the cost, and those are the age, blind and disabled. Those are the most needy populations some are older but not necessarily all of them. You got intellectually and developmentally disabled in this group, mental health services and a range of other things that are chronic and persistent, mental health issues and the like. So you can see what's the population group of this that drives the majority of the cost. There are basically four ways to control cost in Medicaid, it's not quite as simple as this graph, but who you cover, their eligibility where at one point eight million in probably in terms of types of individuals that we cover eligibility-wise would probably in about the mid-range of what the various states do. You can determine at least some of the optional services what you cover we're going to show you a list in just a moment. They're are some services that are mandatory there are some that are optional for children, there are a lot of optional services that are not actually optional for children basically mandatory. We also have some control over how much you pay for those services, but the rates are, but those require federal approval when you change the rate either increase rate of decrease the rate, the federal government, since it's paying roughly two-thirds and utilization, we have programs I've mentioned particularly they help us with utilization one is our LMEMCOs they cover about 70% 7% of medicaid population in behavior of health, and this is mental health, ID and DD intellectual and development disabilities and substance abuse. But that spend is closer to around 25% of the medicaid spanned in that

population and that's sorts of tracks what what we dicussed previously.communicare of North Carolina, covers about 60% of the medicate population and they enforce about, have some influence on about 55% of the medicates spend about half, just some of the current delivery payment system as I mentioned before, we've the Elemy MCO's that we stood up in state with legislation that this general some of the past 2011, to stabilize the spend and better deliver services. We currently have nine entities, there is some addition consolidation is going on in there, round that we are working on rather a number of issues, the pace program which is not terribly large right now but may expand over time paces a capitated progam, melony and MCO's capitated program, public capitation paces a captitated program as well and this is to assist individuals who would otherwise qualify for skilled nursing level care, it keeps them out of that as a community alternative. FIFA service which a good deal currently of our services are paid fever service and of course this is what everyone is pretty much agreed that we want to move on away from fever service there will always be some services that will be safer services by the nature of the ailment that some particular individual has but for the most part obviously it's been a National move for a while to try and move away from FiFA service. We do have our primary Medical home Family Care Medical Home which is the bases for what we're doing, and we want to continue to keep that as basis of what we're doing, somebody to coordinate your care is like some code name my care which I certainly need, and this is done through a small monthly fee. two providers, and one of the big beneficiaries is unlike some stage, North Carolina has a high rate of participation positions in our medicate programme in their requisition for DM[sp?], payment made long term facilities and I see hemorrhage[sp?] which are an immediate care facilities for the mentally retarded OK. Medicaid funding sources you've got federal and non-federal dollars, obviously at state appropriations, you have provider assessments, you have drug rebate each, some of that which you spend on drugs but about half of that money, we get back in rebates which is very important. dish payments which are federal payments this proportionate chair which tries to make up for the cost of care particularly for hospitals is very important, we have provider assessment with we do quite a bit in North Carolina which we assess a provider that funds, those funds come to us, we send them to the Federal Government, they come back to us as more money and we help balance our own budget which some of that. A piece of that provider assessment plus it adds money into the system for care, this is a long list of mandatory services, sometimes you'll see this listed or described differently so sometimes we can work on this if you got a question but, you'll see the mandatory services over there. Chairman Dollar, can I just interrupt you just for a moment, you have so much background mention that it's necessary for people who really do not serve health and human services and Rep. Floyd has asked that we send this to electronically to the members so I wanted them to know that, thank you, sorry. We'll do that, I got this out to everybody, on the optional services let me just mention very quickly the ones that I have put in bold there, basically your mentally health services that are in two or three different categories personal care services prescription drugs, the reason why I highlighted those, those are your ones with the largest spans so some people talk about North Carolina does have more national services than the average state does. We don't have the most but we have quite a number of the optional services that we offer in our program, by a lot of times people when people start to talk about where you could cut back your optional services they are usually the smaller ones, some on that list where you cut this out but you

are not necessarily saving very much money, the big wins are ones that frankly you probably you would not want to cut out, I don't think you want to cut out drugs thank you. You want to cut out the mental health services and the like. Okay, looking at where we are on a per person basis as I mentioned we do provide nearly all optional services, so that does make our per person claim stand higher than some of our neighboring states, as you see they've listed some of our neighboring states and their annual per person span. This data is the last full year that had some data pool in 2011. so, working on trying to get some of that updated but it still gives you some relative, and I picked out some of the optional services that are offered there, this is just a [xx] that I put up there showing you that some of those or neighboring states offer some of those and some of them did not. Virginia of course is higher than us in terms of their annual per person spend and we're 38 nationally so we are among the lower spends of per person despite the fact that we offer considerable number of optional services. OK, in terms of our claim spends it has actually been declining, since 2010. We see the red line it's supposed to be red, about a 9% decrease since 2010. In our puple[sp?] this is our per person, and the green line that you see there that's going up is the actual number of people in the program. So we have gained in that same period of time around, 240, 000 met new covered lives in the program, and our per person has been going down. So we have been doing some good things, and as the red note there, and let me just explain that briefly, this body can take credit over the last several years, we're helping reduce some of these historic service changes, some of these late changes and part of this is the work of community care, part of this is the work of our LME-MCOs, and we have also had some some favorable assistance with our population index, we've been gaining more children, over the last several years in our program and that's a lower cost person in the population, so that's helped us as well. This is a chart doing some comparisons over periods of time beginning at certain points and come out through 2013 in terms of the of the spend and you see North Carolina over there circled, you see other states starting if you look at the 02-13, we're not so favorable, but when you start moving forward, and you start factoring in the number of the changes and efforts that's been made in more recent years, you begin to see that our spend has been very steadily and welcomely coming down in terms of the growth, the actual growth rate, and the growth rate from 08-13 is actually at 2% in program which is exceptionally good I think there're only two states that're either at or below where we're there among these range of southern states. This one, if its not, this green shading that's on here unfortunately, we'll send it to you, I don't think should have the green shading actually should be able to see this when I send it to you. All these wriggly  lines or just another graphic way of looking at overtime, the total increase in the program cumulatively is it's moving forward, and as you can see there by the air where North Carolina is we're among the lowest, not the lowest but among them. This gets to some actual specific number has been a lot talk about problems in medications talk about those briefly here, if you look at the overall span around five what is restated population span and you look at physical year 2010 you get 3.635 billion and 2014

3.67 billion, its actually down there now. We believe that number 3.367 may be a little bit high because of the tax issues and we think that number might be a little bit higher than that what it shows here but still I think you can clearly see that it has been decreasing on these numbers 7% between 2010 and 2014, and this is the states portion of the span in Medicaid, and a lot people don't realize this because they read headlines and don't actually look at the numbers. Now what you will see, and this is where you get the headlines, some of the headlines, is if you'll look on line three short falls in receipts not reflected in the year in state span which is in line two, and if you had those lines up there you get a billion dollars, they're right the billion dollars on line three. Those are monies that we had to put in, or they were shifted by the administration, or past administration into the program, some of these problems were caused by things that the General Assembly did, there are other issues, revenue issues during the during their recession, they caused a lot of issues. We also had to begin to make up in 2012 for the fact that they limited federal money that our money went away, heard it was flowing through medicate, but when you add all those dollars up, those short fall the short form money plus federal money that came in, additional of our money and look at the appropriation spend, again you'll see that it's relatively flat. This is another way of taking a look at you're claims that have got highlighted there, but also some of the volatility of the things that's lead issues that we've had addressed, drug re-bay volatility, dish payment volatility different years and some changes that were made. in there, so there have been other things, but again your title appropriation spend unlike some people have reported is up 52% that's actually not true, just looking for 20, 15, 17 real quick, the funds that are going in to medicate, the house appropriated and appropriate or will appropriate by the end of it, I think of 272 million something along that line, 70% of that is actually in Roman increase, this is un-Roman increase that the state really has no say over this, a lot of the un-Roman increase frankly is great of interesting Medicaid because of all the discussion of health acre nationally and also changes from for example in how you [xx] assets and so those things are very much out of our control in terms of the general assembly. is about 8% price is 10% in the [xx]. Okay, so just to sort of recap our program we do have one of the lowest spend rates in the South East claim spending has essentially been flat for the last several years. We've actually been declining on a per person basis it has been a far more predictable than you might think, in term so the underlying [xx] and we will have a surplus cash position at the end of last year at the end of this year small but that's much better having a home. We do offer probably more services than our neighbors and some of the other items the are mentioned all of our neighbors use HMOs or MCOs for portion or program so I think our program stacks that very well against theirs. The bill focuses in quite a bit on PLEs provider lead entities because even though you might draw someone might be and say well, hey why are you doing anything if you're saying this flat spend?

Well, you always have to understand that, that spend has been controlled because we have been doing things. It's not just there by it self there have been things that have been done since general assembly has done and again and the other groups that work with us, but we know that's not health care cost that we go to take the next step of reform we can't just sit where we are those crosses will start going up, we've got to address that. This bill focuses on provider led entities and probably need to let Donnie explain a little bit more about these, but the concept is to build on our successes, build on our doctor and provider networks, have them assume full risk for their Medicaid patients we want to build on the networks and what we have in place and make sure that our physicians are in charge and treating professionals are in charge of healthcare and others in terms of advantages from tax payable perspective, we do want to control course and be able to continue on the road that we've been no, that change in senate of the system Is on long term and address long term healthcare issues, ensuring via use the goal and not simply buying man services focusing on healthcare outcomes as opposed to a quantity of services being provided, and again feel at least because we want the doctors to be in charge, we want capitalize on what works in North Carolina and we want to home grown North Carolina solution as opposed to bringing in companies from other states to do it. Feel PLEs voucher process verses Acher Maries within this question one, questions for one, PLEs was rationalized  and just the tragedy viewing is the same as that I can be possibly be targeted but we believe PLEs will focus on the patient care and quality and to drive down the cost and we don't want HMO systems or demonstrators or folks that have to answer to investors or stock holders to be between our patience and our doctors to make decisions. We believe we need a North Carolina decision and I would focus here on, we've done this before, we did this with a far more difficult population in the behavior of health, we went with the North Carolina solution, we could have gone the HMO route. We had the HMO involved and in some of our behavior of health in 2011 but we decided to stand up the, take the MLE's and make them public manage care, decapitate them and to, and that system, I think it has challenges but it has created a very stable system in our behavior of health form more stable it's been in the last two decades, so we know we can do this because we've done it before we are talking about fundamental reform, we're talking about capitation with health care professionals, and the institutions providing the cares direct care so the people of the capital are actually the ones providing the care. HMO's as you know don't provide the care, they do management work but they don't actually provide the care we also have in this bill, medical loss ratio 90:10. We believe that the money needs to go into the services for our people we won't find HMO's being able to probably get anywhere near that, and those numbers are meaningful numbers when talk about sized program. It is fair to say that HMOs with their capital can start up more quickly, and they can potentially offer a lower bid but as we'll mention in a few minutes that's not always, you can have problems with those as well, and its really after this initial bids that we need to be concerned. We certainly don't need to be hostage to anybody, and let me just mention because this somebody states could mention part of this so let me just mention this. Florida has been discussed a lot I spent last several years going through their, a switch to HMO but there are losses in the HMOs for the first half of this current fiscal year.

We are more than 300 million. There was reports that they could reach as much as $700 million at the end of this month I think they were asking for $400 million the fact that they were asking for $400 million, the HMO plans, to off set current year losses and they had also asked for 12% increase and the up coming year for those medicaid plans. And those are HMOs, I don't think we want to go down that route so, anybody tells you, then anybody has a silver bullet, I don't think anybody, frankly, anybody have a silver bullet, and when folks tell someones successes I think you always need to make sure check the other side as well. I mentioned Kentucky briefly, Kentucky went and the reason why I mentioned Kentucky, is Kentucky pushed really fast, some of our friends just want to push really fast but you better be careful Kentucky pushed too fast, and their lowest bidder back in 2012, the lowest bidder pull out and they didn't like the rates they were losing money and they left, with the PLE that can't leave. They're the providers they got nowhere to go, they're staying here. So I don't think you necessarily want to turn over large segment of population of folks that can decide to leave town, they leave town. Louisiana is been discussed a lot, they've got issues some $900 million in issues according to reports from down there as well, so concerned. So again I mentioned those not necessarily to pick on those people but just to say that sometimes if you'll hear Redrick[sp?] and you'll always need to make sure you check behind anyone to Redrick[sp?]. The bill itself, we'll just run through that real quick, section one does talk about the intending goals and you have your bill summary there. Definitions in section two, the through the delivery system, and tend is to be with full risk at 9% of the medic aid populations in five years, and we think that a very important goal we want to make sure we're serving 100% of the counties and that our cost growth is at least 2% below the national average and that is very ambitious, but we believe is very durable. The other items there we've timeline and set forward in section 4, section 5 is the submission of the waiver that the department will have to do with centers for medic aid medical care services CNS, and this will operate under 1115 waiver. Section six covers some of the various components that are there and representative Random can probably talk about the details of those for has questions, section 7 the department has see we would be leaving the agency and eventually. Quality Assurance Advisory Committee will require these very important audits, maintaining funding mechanisms, leisure transition issues and then of course there is a joint legistate of oversight committee on medicate created just a focus on this in accordance to this bill so in this appropriate, the reason why the the bill here in appropriations because it appropriates $2.5 million and I guess that's really what this committee does because we have been through hell on the policy side, but I wanted to, since we have most of the general, most of the house here, we wanted to  try to sort of briefly cover little bit more than what you can talk about on the floor and that the appropriation is $2.5 million to get the department moving forward on reforms, so I apologize for talking too long on this, and Don I know what you want to add I'm sure there are some questions. Let me just add a couple of things. They is a lot of good information here and I do think it would be helpful for you to have it, and if do you have other questions because this will be an item we're going to talk about for probably a few more weeks. It is important to note that the solution that we've come up with is a North Carolina solution.

There is not an easy answer to solving this problem. You can't just go to any other state and find what's working. You can take parts and pieces, and that's somewhat what we've done, we've taken parts and pieces. But there is not one solution we have to come up with our own solution. It's important to note that the current system rewards volume. In fact the more you do the more you get paid. So we're moving from a system that rewards volume, to a system that rewards value and that's where the capitative risk and then allocating that to providers to figure out how to better manage, health care is made up of a lot of different silos and they all operate in a silo fashion, you've home care, you have long term care you have hospitals, you have hospital outpatient, hospital emergency room, you have physicians there are lots of silos quite frankly they do really pretty good job but those silo's need to come together and figure out how you work across those silos to reduce unnecessary utilization, it's also important to note that while this is a solution for claims handling this actually does not address because they is really no way to do that and no other states done it in terms of the enrollment, the enrollment and the eligibility criteria that's set forth this plan will continue to grow, enrollment will grow as people in North Carolina have the need for these services This is focused around the claim spend and as you can see from the data we've actually done a reasonably good job. This is actually going to position us to the future as much as is responding to some of the issues in the past, because we do need to get our arms around the future of health care calls and re invent the system, transform the system and put providers on a path where they can in fact begin to be rewarded for changes in the way they care for patients.  I have used the statistics before that the division gave me a couple of years ago, that there were 800000 approximate visits to the emergency room by medicate patients, but over half of those were coded as non emergent and quite frankly North Carolina medicate patients use the emergency room as their primary care physician. And I can tell you the most expensive site in a hospital is the emergency room, you really don't want to go there. If you don't need a emergy-care their would be alternative models created their would be lots of transitions to put patients back into a primary care, into alternative caregiver models, that will actually change the course curve, and those are the kind of things that I'm very excited about that this bill addresses to be able to transform healthcare. I'll stop there because I know there will be a lot of questions that we can get into. We have numerous questions, we have one amendment. I usually forget when I preside to say what I want to say, because I just run it to the last minute, but I'm going to say I got this time I want to say how thankful I am for the I've been here 15 years and I've watched this progress, and watched consumptive it, and When Representative Winsco chaired the committee and Nicky xxx was doing the budget our projections were Opposite of what's is really happening now. So, you do all the plan to go this way, you plan for to be all children majority of our expenditures. So not only are we having to reform the process, but we actually spent all that time trying to solve a problem that didn't actually happen, and It was actually the opposite. So you have to stop and then revamp, and I am really proud of your committee. They're And a lot of really good work. Three recessions in that period of time headed forRthe wrong direction, unexpected Federal legislation just all kind of things and when you look at those charts, we're accomplishing. something we're getting better. I just wanted to tell you that's very rare, that doesn't happen a lot in the departments, and entire committee for the last 10 years is to be complimented for that accomplishment.

That's to me is a great accomplishment. One more, I have a question, when you're doing the rankings you're not including the services, the difference in services that you supply, are you? When you go to your ranking or your federal, I mean state ranking, you're just comparing dollars not services, it's that correct? That's right, because some of these it's like someone said if you're seeing one Medicaid program, you're seeing one Medicaid program. Every Medicaid program in the country is different, there're no two that are alike. So, this is the overall dollars because within those states there're different array of services and different rates that are being paid as well. thank you, now you've an amendment, we're going to go ahead and take the amendment, we've an amendment and I need for you to take your amendment and at the top slight error if you would change that to 372 which is the correct number of the bill you had amending, Representative [xx] Thank you madam Chairman, if I may I just like to also add my endorsement of this bill I've spent through a lot of work and I think I'm very proud of the outcome that you've reached in one of the committees before somebody question how we would know that we would have the experts that we need to lead this kind of organisation. I didn't say it then, but I would like to just point out that you have one of them right infront of you as Chairman of this committee, a person who represents the quality of expertise that would system to help do the management and the administration. So in addition I think that this system has evolved from leadership that was provided by the providers. They've really driven this system and led it, and we've always had the stakeholders work together. When you have people in a complex situation and somebody thinks they're the loser, they're going to try to undermine the system. When you have the stakeholders agreeing they will work together to make it work and that's what this bill represents, an outcome that everyone is agreeing to work with so I think that we're going into this next stage that we're in good shape, and I think that on my amendment is on page 4 line 34 probably The way I read this the advisory committee is focusing primarily or maybe exclusively on the financial end of the system, and the real focus of our medicaid system is the patients and so I would like to add to that advisory group someone  who has expertise in health quality outcomes so that we could just maintain that focus at that level. I'm happy not run this if it's a problem you can just add it when its convenient, because I think I don't have any question that you also endorse this approach. So I can offer it or you all can change it later, but we're happy. Well go with the direction of the Chair because our appropriations is supposed to be about the appropriations fees right madam Chair we don't have any problem with that particular sort of clarifying. Thank you. Those words if the committee wants to vote on that we can stick that in that way it will be there next week when the bill comes to the floor. So we will vote on that, is anyone want to speak on the amendment? I have a question madam chair. I'm sorry. I have a question for the amendment sponsor which is the reason why I raised my hand. On the same one and that is. My concern lies with the expert so this would be a non expert person somebody talking about quality of outcome. No expert would also if I may answer madam chairman, expert is an agited that applies

to all of those so it will be an expert in health quality outcomes, does that answer your question I have a question on the bill sponsored after the amendment done Yes I have you on the list. Any more questions on the amendment, if not representative  I'm sorry I would like to speak Representative Penilson I'm sorry that's fine. Madam Chair I'd like to speak in favor of this amendment because so long it's just been done to do a medical procedure, and if it comes out fine, fine. If it doesn't then we'll just do it again so I think the outcome is very important. thank you representative you move that motion all of those in favor those opposed, the amendment passes. Let me go over the list if you're not on the list if you'd like to speak we're going to vote before [xx] because we do have session at 10 I have to speak representative Representative Lukas, Micheale, Avelo, Sheppered, Stephen and anyone else then we're going to have a and that includes anyone else? I think we can do that if, I can't see, I can't see you hardly Al right. If you all make a comments or question as concise as you can, I think we can get everyone in. We have one or two people, who want to speak from the public so if we can work that in to. Representative Lucas. Thank you Madam Chair. I'll attempt to be as expeditious as possible want to commend first of all Representatives Dollar, and Lambert and others for bringing this bill forward. I think there is a lot of effort has gone really in to really fixing what's been wrong with Medicaid its certainly not a perfect panacea but it goes along way to doing just that. I notice that many of the stakeholders who were left out previously are now on board with the bill, the bill has been massaged and vetted quite thoroughly in the Health Committee, and I had the opportunity to sit on that Health Committee and I recognized the long expedient work that's going on with the bill and at the appropriate time I'd like to offer a motion for favorable report. Thank you for that offer Representative Lucas, but someone has beat you to it, Representative West is on a winning streak, and he actually asked that we didn't have to ask him this time, or Representative Michaux, and I want to thank you Representative Lucas for your service. I do agree with Representative Insko, its providers and people have worked hard on this, Representative Michaux I want to add my congratulations to those who worked [xx] has been a long [xx] process as going back much further than many of us can think. You can start out with the [xx], and how this program has progressed over a period of time working through all those mistakes. I have one question now on this. The PLEs have you figured out any requirement for the make up of the PLEs, I didn't see any playing here concerning that, and how do you plan to handle I'm very concerned about the car you can get appearances people in PLEs when you start making them up if you don't put something in  here I think the scar thank you for that question is a very good question we do want this to be a cross representation of all providers may consider that nurses are at the table, that physicians are at the table, that home care, and to make this work at the provider level they need to include all these caregivers so that they have no discussion about the lowest and best cost and house quality. The only thing at this point we put in here is that the majority of that provider LED entity needs to be made up of positions, because I do believe that positions will lead much of the transformation. Although they will need all these alternative care givers as well. But we've not prescripted how exactly the make up because we did leave that to the provider LED entity and that's requesting representing Chair   Partially yes Representative Adcock,

Thank you Madam Chairman, I just have a couple quick questions and then a kind of short comment, in your illustration you gave earlier where I think it was Florida had gone to the mandate care and they came back and hadn't estimated the cost and they were asking for like a 12% rate increase. MCO has been around for a long time and if they weren't able to come in and find out how things were going to be run and how they were going to cost out. How is this new entity [xx] that is just going to be learning how to work together what are they going to have  at their disposal to come up with numbers that are going to be spot on and we're not going to face that same sort of issue with them? Representative Dollar One piece that is, is that in our plan we have kept the prescription [xx] piece out at this point in time, we want these entities to come together before we add that TCM both as part of their problem that they are having in Florida. I think they are having some other problems, they were in on setting up the requirements for the bids so I think they are going to have to answer that question as to why so many of those HMOs didn't get it right in terms of formula and didn't get them right in terms of their bids, I think that speaks volumes, I can't say though with respect to the providers. Provider led entities are the people who are actually providing the services I mean they've got the stature right there. They are going to be able to put that together and they are going to be at risk for that we're talking about capitations. So, they're going to be at risk for providing that service and making sure that they have bill sufficient capitalization in terms of what they do, and how they manage those dollars. Representative [xx]. I'm then in, from this aspect when we're looking at the dis-proposed reform, my assumption if and I need the clarification on this is the MCO's will never be the leader of a plan it's always going to be PLE's and as stated in health the role that MCO's will play will be insularity as health with back of office type issues. Representative Dollar. Yes, under this plan PLE's are the lead, they are provider led entities I believe it's 5 1% but they can certainly contract with management companies, can be part of that, can be part of the PLE if they chose to contract with us.  Just a brief comment please. The illustrations that you showing the deficits and the negatives of MCO's focused on a couple of examples one of them actually, Kentucky illustrates the concern that I've got with the path that we're putting ourselves on because we have illustrations in a number of states where MCO's have successfully year after year managed plans. They've won rebid after rebid of their contracts because they've been able to produce and my objection is not with PLE's parse. My objection, and concern maybe it's not an objection, since I love the idea of the PLE, I feel like the relationship under an MCO or PLE should be between the patient and the doctor but my concern is going down a path with only one option, plan and that is the PLE, that's what happened to Kentucky, they went with one MCO, and that was all there was in the state, and when it crushed there was no plan B, and that's just honestly, and truly the concern that I have for the State of North Carolina. Would you like to make a comment? We have eight more to go [xx] did have more than one, the lowest bid left the state. There's a provider led organization there that's actually doing pretty well in Kentucky that you might want to take a look at there and that's also the reason why as you mention in terms of speed, this bill this is on a five year process so that we make sure that you do get right as we are moving along. Representative Avila, Representative Shepard. Thank you, Madam Chair.

Representative Dollar, question I have has to do with, in our community I'm told by a local hospital officials that a lot of times Medicaid patients come to the emergency room for urgent care. And the urgent care is a lot less than expensive for them be it they go to an emergency room, and then we're required to pay a higher price for them visiting the emergency room to receive urgent care. Is there anything in this that addresses that, or anything that we can do about that to encourage those patients to go to urgent care instead of going to more expensive emergency room? Representative Lamberth. That's exactly what happens today and [xx] yesterday or actually encouraging those patients to go to the merge room[sp?], They are always open, some of the best care in the states and [xx] room. The way the PRE will actually operate, they will actually create systems and processes to bring those patients back into a primary care practice,. Every patient will have a physician, lots of medicaid patients they don't have physicians so the merchants become there primary care physician. So they will be assigned or they will select their physician, and then those physician through the processes and the systems we'll put the tools in place to work with those patience to educate them to let them know that when they have a medical condition, they may need to call in to a call center, they would go actually to a lower call setting like an urgent care. So they'll be the PLE will be at risk. And if they put a system in place to move those patients in to lower cost settings, they will be the one suffering those loses rather than the state. Representative  Shepherd does that answer your question? Representative Stevens. Thank you madam chair, I guess I'm just a little bit used about why we put these things out for bid period. If it's a capitated rate, there's a certain amount of service. So what's the point of bidding if we're capitated, and the physicians know what those rates are, they'll say I'll take this many patients at this rate. I'm I confusing? Representative Dollar lined up. There are lots of complexities, they will actually enroll patients and then they will present those enrolled patients. The state actually will set the rates, all those kind of details, this is a fairly short bill for a very complex problem and a lot of those details of how they're going do the waivers, how they're going to get the bid set up, what's the purpose of the bids, what the quality indicators, all those details will be worked out, but today I don't know exactly how the bid process will actually work. But there's a huge difference between one category of Medicaid Patient that they will actually attempt to enroll and then negotiate the rates that will be paid for those. Representative Stevens, that answers it. Rep. Adcock.  Thank you, Madam Chair. I feel like a freshman football player coming on to the field as our team is advancing down the field with a series of winning plays. Although I'm new to the work of Medicaid in this body I'm actually not new to Medicaid itself because as a registered nurse and a nurse practitioner  I have provided care to Medicaid patients over the many years. I'm not going to offer an amendment today because I know today's meeting is about appropriations and not policy, but I did want to put out here for everyone that as this bill works its way through the House and the Senate, I'd like to see language like what's on page two line 33 through 35  and the majority of provider-led entities, governing boards shall be comprised of physicians who treat Medicaid patients etc, I'd like to see this language. change to be more inclusive than health care providers and here's why, as we seek to modernize medicaid, I'd like to challenge us to modernize our thinking about who currently takes care of medicaid patients, because it's going to take everyone in the future to make this new delivery matter work. It's going to take all licensed Telcare providers working together not just in delivery, but also in the planning and the policy decisions. So let's truly modernize Medicaid on this first step and as we move forward, Thank you. Representative Brody. Thank you Ma'am, a question I have on optional services. Actually two that I've tried to combine them here is, I know when we do optional services and we get reimbursed by the federal government, is it basically at the same rate that we would get reimbursed for everything else? or when we enter the area of optional services is that tend

to put more expense on the state, and just to follow up on that, I'll get these questions over with here is. I noticed on your chart that South Carolina was one of those that offers very few optional services, and we in turn will offer quite a bit. Is there, or has there ever been a way to track if certain people jump states in order to take advantage of optional services? Is there any effort on that part to see if that actually happens? And that we are gathering up everybody who needs these optional services, and they are all saying, "hey, let's all go to North Carolina to get it" Representative Brady, I can tell you that I've put telephone and email that does happen. Would you like to make comments represent it all? Representative Lambeth may want to comment on the, with respect to House Bill services are mandatory. So, they're mandatory no matter what state and Daring may want to comment on that. Was your question about other payment rates [xx]? Dave Richard is here from Medicaid, he may want to answer that. I do think there's some variations and payment. Is it sufficient or do you need the answer? No, I asked the question I can get the answer privately from guys. Okay if you don't mind we have one, two, three, four. We have four more to go and I'd like to hear from the public comment. Representative Ford. Madam Chair, I just want to thank the committee because of time, vote, I yield to not bad to check I believe I can catch Representative Dollar on the floor. Representative Blackwell Thank you Ma'am Chairman, I have several questions around my limp myself. If you don't, to two and maybe I can address the the others with the staff for Representative Dollar or Lambeth later, cause it really is a request for some additional information both are for Representative Lambeth about some two comments that you made today. One I'll start with, you saying that referencing the very expensive ER visits and that under this new approach that the PLEs will be developing new systems to keep people out of the EO's. What changes on this legislation that will allow that to happen what is prevented hospitals in CCNC from developing those systems currently? Let me mention something Rep. Dollar.   Thank you Madam Chair, let me mention something that, community care as well as other initiatives aren't away in the state and haven't been under way in the state to  divert from the ER's. So there has been a lot of work done and I think that's reflective in the fact that our [xx] expenditure is roughly 38th in the nation as opposed to being one of those in the higher states. And I think Chris Chairman Lameck can speak for himself he has been in the hospital but we want to do the objective is to do more and to put the appropriate incentives in the system to help drive additional efforts to make sure that only those people who are appropriate for  an ER are in the ER and of course there's the complexity that everybody is challenged with entilo[sp?] I'm sure you are familiar with entilo[sp?] which says that anybody who shows up at the door hospital has to treat and that's good in many respects. You hit the hospital and you are going to be treated whether you have a nickle on you or whether you qualify or don't qualify you are going to be treated but it also has his challenges. Thank you Rep. Dollar, Rep. Pittman I'm sorry, do you have a follow up?  One more follow up, If I may, just quickly Rep. Lambeth you also mentioned that this is a composite of  parts and pieces that was successful in other states. Could you provide us something or may later as to the parts and pieces and where they came from  that we are in fact modelling success? [xx] we will make this like I said electronically available. Do you bet the yield sponsors are available at any time Rep Pittman. Thank personally I

say I will appreciate the effort here honestly is coming out a little quick the same as it did the sanate they said we have got a good start here and good things a those things I hate saying this but when you this last 2 here before they put up to the tool box I hope my note may be made correct spelling and grammatical errors this one glaring out of and on the earlier side it said who established the whom you cover so this kind of things I would like to say correct because we pull out instances of education in state we need to set good example thank you. Thank you Mr. Partner representative Patman as you know am focused on the diaries. Representative Bail will take your amendments off chair. Representative Shepherd and Clark will answer the questions that I have. Thank you. Is there anyone else who wanted to speak on it? We have a few more minutes minutes we have, if not we have someone in the audience that has told me that they would like to speak although we've everything they got on the great job on behalf of the nurses and I have someone Alexander Miller would like to make comments. Sir, you have a two minutes Thank you Madam Chair, members of the committee my name is Alex Miller speaking on behave of the North Carolina Nurses Association representing over 146 000 health care providers in the state by far largest provider group in North Carolina. Just want to let you know that NCNA fully endorses the stated laws of medicated forms, increase  access to high quality care and a lower and predictable cost to the state. We do know that in North Carolina we have a serious access to care problem. 41 counties in our state are either full or partial. Healthcare provider shortage areas and 31 counties in our state have no practicing OBGYN to provide primary women health care. Many of those counties are represented by members of this committee. We also have in our state thousands of advanced practice, registered nurses, representative [xx] who can and do provide high quality primary care services to all patients including medicare patients. Any successful medicate reform plan must utilize all qualified providers that we have in the state and working those providers need to work to the fullest extent of their training and education. As Chairman Dollar said medicaid reform is a process and we absolutely agree and any successful provider lead plan will take into account the concerns and perspective of all providers and we thank Representative Dollar, Representative Lamberth for pledging to work with us as the process continues and look forward to working with them and any other interested party to ensure the medicaid reform plan addresses all those concerns, thank you. Thank you very much is there any one else who would like to speak if you you will go to the microphone and your name and who you represent for the record please and as quickly as possible we are right at that time Yes, my name is Hugh Tilson, I'm the Executive Vice President / Chief Operating Officer of the North Carolina Hospital Association. On behalf of our 134 member hospitals and 200, 000 employees, we support this legislation we commend the bill sponsors for their hard work on this look forward to continue to work with you as this bill progresses thank you very much. Thank you so much Good morning my name is chief Agony with North Carolina Medical society I just want to thank the house leadership and the chairs for their work on this bill working with providers to come up with solution if we think it's realistic for the time frame that's realistic for acknowledgment position leader or not limiting any provider participation in the solution is being drawn before you we support the bill and we look forward to working with you in the future thank you I'll be quick my name is Dave Richard I'm Deputy Secretary for medicaid services and we want thank the two Chairs for they work on this efforts and it is consistent with what DHHS This has been proposing and working with providers and constituents across the state and we support the bill in it's reform, thank you. Thank each of you as Representative Vinsco said it has taken the public and private. If there are no more public and private to make this successful and we appreciate your efforts also if there's no one else who wants to speak Representative West has a motion. Thank you Madam Chair, I move for favorable report proposed committee substitute is amended rolled into

a new proposed committee substitute with a favorable report to the new committee unfavorable to the original bill. Thank you Representative West, that was quiet elegant. All those in favor favor of Represenative West Steve say aye, all those opposed. Alright, the bill has passed. Thank you and meeting has adjourned. Thank you mum. Good job. Thank you.