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House | June 19, 2014 | Committee Room | Appropriations Health and Human Services

Full MP3 Audio File

Good afternoon, we'll go ahead and get started. Sergeant at arms helping with the committee today as young ??, Bill Morris, Warren Hawkins and Gage Powell. Thank you gentlemen for your help. We have one bill before the committee, it's House Bill 1181. There's a PCS without objection. The PCS is before us. Representative Dollar will present the bill. [SPEAKER CHANGES] Thank you, Mr. Chairman and members of the committee. We have had a very long and storied road moving to this point today and today hopefully with the indulgence of this committee we will move past another milestone in the reform of North Carolina's Medicaid program. And what we hope to see in North Carolina is a model program for the entire nation. North Carolina has had challenges with its Medicaid program in recent years owing to a variety of factors, but what's often missed, I think it's looked over is that North Carolina has had tremendous strengths in its Medicaid program as well, North Carolina has one of the best records with respect to access and participation by physicians. It is a program that is strongly supported by hospitals, by specialties. North Carolina's program does offer a number of optional services along with some optional groups that are covered and I think that that lends itself to a state that has operated a very compassionate, a very forward thinking Medicaid program where care actually meets the patient and where services meet those who are very much in need. So with that, Mr. Chairman, we're also looking to the future as everyone knows in the United States we have issues with rising healthcare costs and we have all been struggling across the country to deal with that. We are also dealing, of course, in an era with the Affordable Care Act and the changes that that is bringing to our healthcare system. But be not mistaken, everyone I believe is committed and understands the importance of bending the healthcare cost curve, and North Carolina I believe wants to be in the forefront of doing that, doing our part to help bend that cost curve while we work to improve quality of care as well. Mr. Chairman I would like to just take a brief moment of privilege to thank Secretary Voss who is here. Thank you Madam Secretary for being here. The Secretary helped lead with her team an advisory group that contained a member from the House, myself, a member from the Senate, Senator Pate, and three public members that spent the earlier part of this year working on a proposal, a plan, and that was introduced in the original bill. We believe that this Proposed Committee Substitute today sets up a framework that works very well with most and certainly all of the major provisions that were being contemplated in the plan as it was proposed by the administration secretary and the governor. To get to that plan, if you will look at section 1 sets out the intent and goals, and of course what we are looking to do is to move away from fee for service to provide greater budget predictability, to slow the rate of cost growth, achieve cost savings through greater efficiencies in our program, create a more efficient administrative structure and of course improve health outcomes for our Medicaid population and require provider accountability for budget and program

... outcomes, so that is to say both from budgetary standpoint as well as the actual outcomes for patients, and I might add that this is happening in the context, and I started to speak on this a moment ago, but let me just say an additional word; if you look at the proposal as it came from the administration, they had accountable care organizations as a backbone component. This plan allows for the continued development of accountable care organizations in the state of North Carolina. Those are already underway, as many of you know, with our Medicare program. Medicare is reforming. That’s probably the single largest payer of healthcare in the country. The second largest set of payers in the country are private insurance. Private insurance is reforming as well, and the third largest payer in healthcare is Medicaid, which involves us here in the General Assembly as a partner with the federal government. We are now moving toward greater reform as well. Section 2 provides the building blocks. We do want to build on our primary care medical home model. This is a model that a number of other states have been looking at and trying to find ways to work it into their programs all across the country. It is a model that has received numerous awards. Senator Burr conferred an award I think, a national award, earlier this year. It’s a system that I think the most important part of it is it engages our primary care physicians, and that is so critical and important to have primary care physicians linked up with our patients. That’s where you have the best outcome, and I certainly can say that from a personal perspective as well. Item 2 under section 2 is where we have provider-lead – these can be physician provider, specialty provider, hospital provider – provider-lead capitated health plans to manage and coordinate the care of a majority of our Medicaid population by 2020. So we are starting down… We know this transition will take time to make sure that we do it right, to get it done right, and providing this five-year period of time as we move toward 2020 we believe is the appropriate amount of time to ensure that we get there. As we’re moving along, the plan shall begin with limited risk but shall assume greater amounts of risk over time, up to and including full capitation. Another way you can say “full capitation” is “a global budget cap”, so this is a substantial move and a substantial commitment on behalf of providers to be able to say that giving them the opportunity to move away from fee-for-service, to get the incentives right in the system, and to be able to be a partner with the state in saving money in the Medicaid system. You see the additional provisions there with respect to the building blocks. The plan coverage areas, the regions as it might be, would be based on the Community Care of North Carolina. I think they currently have 14 regions. That is something that will need to be looked at with the department and with CCNC to ensure that the number of regions is adjusted appropriately and the disposition of those regions are adjusted appropriately based on the needs of the Medicaid population itself. Section 3 discusses the department’s role – the state’s role, as it were, and the department as the lead agency. Section 4 talks about what the General Assembly will be expecting in the detailed plan as we move forward. We’re moving… We set forward the goals and the basic structure…

-sure in this bill, an department will put together, working with all of the stakeholders the implementation plans, and how we answer all of the myriad of questions that have to be answered, and in an extremely detailed and complex industries, or really sets of industries, sets of situations. This bill also provides in here, obviously a phase-in for these provisions, if we go on to section five we talk about moving forward with some reporting times, further in here we have the opportunity, of course, for the department to- in section eight- to develop various waivers and spas, including potential 11-15 waivers, other state plan ammendments is maybe the department and providers making necessary to implement a plan. We put forward in section nine something I think is very important and this is as much a reminder to ourselves as much to anyone, and that is the general assembly needs to stay committed to the process long enough for it to be successful. There's some areas of the budget, some areas of state policy that are very important, but frankly if you get them wrong, you can always come back the next year and fix them. You can make adjustments, and you can easily correct the course, and we have had to do that from time to time. Medicaid, I would argue, is quite a bit different. You want to make sure that you have the ship, the institution's turned in the correct direction and you want to make sure they are going in the correct direction, because if you go off on the wrong direction sometimes it can take you years and millions and millions of dollars to get yourself back on course. So, it is important I believe, for the general assembly to maintain its commitment to this medicaid transformation processes as we move forward. Section ten involves the [??] MCOs, as you are aware, behavioral health, you have medical health, you have behavioral health, that are two big groupings although there are a number of patients and clients that move between behavioral health and medical health. The local management entitities MCOs, these are publicly controlled, public managed care organizations that this general assembly established in 2011, based on an expansion of the PBH, Piedmont Behavioral Health pilot that had run, at that time I believe five or six years. This general assembly made a commitment in 2011 to expand what was called a 19 15 "b" and "c" waivers statewide. The state did that. Since that time, we passed major legislation in 2012, and major legislation in 2013 to help facilitate and further that transition, to make that transition successful and those public organizations who deal with behavioral health, mental health, intellectually and developmentally disabled, and substance abuse successful. In doing so, this general assembly has had a strong commitment. Again, what I think is imporant is you keep the commitment going. You stay with the plan and allow it to work out the issues that have to be worked out. I think that this general assembly is to be commended for its working with and staying with and continuing to help partner with the [??] MCOs to make them successful. I say that as just sort of a bit of a background to section ten. Section ten is actually a limited section, which involves the 19 15 "c" waiver, the innovation waiver, and this involves individuals who are intellectually- (recording ends)

… and developmentally disabled, and so if you’re looking statewide, and there’s probably some people in this room that can give me maybe closer to the exact figure, but I believe it’s roughly 12 to 14 thousand out of the 1.6 million give or take Medicaid population that fall into this category of intellectually and developmentally disabled, and what we are saying in this demonstration pilot is to give an opportunity – and at the present time I believe Cardinal Innovations would be the one LME-MCO that would qualify under these provisions – an opportunity with their roughly four thousand or so IDDD population to manage to have their behavioral health come and to manage their full care for those individuals, and we believe it’s important to take a look at this, to see what capabilities of the LME-NCOs would be with this very limited, very narrow and specialized population. This pilot will obviously take a year or so to get up, and it will take probably another couple years just to see how it operates, and we will learn from that and take those lessons, and future General Assemblies will be able to evaluate that information and to see how that works for those populations. This plan is open in many respects. Occasionally you get questions about insurance companies. We in this state have a strong history of provider-driven reform. We’ve got tremendous providers in our state. This allows those providers… while telling them that we have to move to capitation, it is allowing them to help lead the way to get to where we need to be as far as the General Assembly’s core interests are. Insurance companies will be able to partner with these provider-lead organizations if those provider-lead organizations so wish to employ their services. There’s nothing that would in any way prohibit that from happening. We want to be able to have a system that has a degree of diversity to it to meet the varying needs of our state, but that covers the entire state as well and meets the goals and objectives. And Mr. Chairman, I apologize for speaking so long, but I’m trying to delve into Medicaid reform, as all of us know, as Representative Burr and Representative Avila and Representative Lambeth know, prime sponsors on this as well, it is a difficult and deep subject. No one knows all of it. We’re always learning and we’re always trying to improve, and Mr. Chairman, I would be happy to answer any questions members might have, or if you want to take comments from the public, it’s your direction. [SPEAKER CHANGES] Thank you, Representative Dollar. To the guests in the gallery who are standing, if you would like to take a chair in that third row there, you’re welcome to do so. May be a little more comfortable. Any questions or comments from members of the committee? Representative Samuelson. [SPEAKER CHANGES] Thank you Mr. Chairman, and thank you Representative Dollar for going through that because this is not one of my areas of expertise. I can explain gravel to you, but not Medicaid. But on section 10, I do know as a former Mecklenburg County commissioner that that whole changeover to Cardinal was really hotly contested, very complex; only happened what I think was relatively recently. What confidence do you have that they are stabilized enough yet to take on what you yourself described as a sort of unique, complicated set of patients? I was originally going to ask you how many qualified, and you answered that question when you said Cardinal, but I’ll admit it makes me a little nervous to… Just give me some comfort level that they’re ready to take…

?? After all the conflict and stuff that's been going on. [SPEAKER CHANGES] Well I would say that the situation with Mecklink really has to do with Mecklink. It didn't have anything to do with Cardinal or their capabilities. You know it's a whole long story, but the LMEMCR that did not make it in that case was Mecklink. It wasn't the Cardinal organization. So let's say those challenges are not related. [SPEAKER CHANGES] Follow up. While from an organizational standpoint, they were two separate organizations. The patients and the providers are still the ones that got moved or caught up. I'm still not even sure I understand exactly what happened. But, the ones who were under Mecklink are now under Cardinal. And my understanding from some providers in my district, has been there's still some awkwardness. There's still some, it isn't a smooth process yet on all of those issues. So, just so while though, you clarify. Those are two different operations. Help me have confidence that that whole Mecklandburg piece of it has settled down enough that they're ready to take on those patients and do something new and complicated. [SPEAKER CHANGES] Well it's our view that they that they are. And this is this is a population with the intellectually and developmentally disabled, this is a population that in some of these individuals are in are currently in facilities as well. It's a population that is very well known to LMEMCO's. They've been dealing with this population since they were area authorities. I mean you go all the way back. So it's not, it's not really a group as some additional responsibility with regard to those particular individuals. But it is a, is a group of clients and families with which the LMEMCO would be very very familiar with all of their details. And another thing that I would mention too is, this is not something where the bill passes and somebody flips a switch. You have to have approval. There's development that has to be done. There are agreements that have to be reached with other providers. There's approvals that have to be obtained through centers for Medicaid and Medicare services. So, it will be a very thorough process before a demonstration of this nature would actually be up and operational. [SPEAKER CHANGES] One last follow up. [SPEAKER CHANGES] Follow up. [SPEAKER CHANGES] On that the date question, alright it says on page 3 line 39 that it should be up and going well enough that they've got some sort of report a year and a half from now, if I'm counting right. A year and a half from now is it possible to consider bumping that out a little later and giving them time to make sure that it's gonna work? [SPEAKER CHANGES] Well that report would report to the over-site committee about where they are at that time. [SPEAKER CHANGES] Well let me re-state my question then. Is it possible to bump out the start date to give them time to make sure they're ready to do this? [SPEAKER CHANGES] I wouldn't see a particular need in that at this time. But we can certainly, we can certainly take a look at that. [SPEAKER CHANGES] President Farmer-Butterfield. [SPEAKER CHANGES] Mr. Chairman, I know you have the list of people in the order that they are, that they raised their hands. I'm wondering if you have, if they are not going speak on this issue that Representative Samuelson raised if could have a conversation about that one topic. [SPEAKER CHANGES] Well, that that's fine. I have no way of knowing what topic is on each member's mind. Did you want to address what she was saying? If Representative Farmer-Butterfield will yield to you that's fine. [SPEAKER CHANGES] I was going to speak on that topic. [SPEAKER CHANGES] Okay. Representative Farmer-Butterfield. [SPEAKER CHANGES] A couple of other questions, but that particular topic, and my question was, number 1, I was glad to see that in the Section T in Number 3 you have people not only in CFMR but also in other residential settings in their homes that will participate correct? With IDD. On the pilot I was wondering was there any other.

MCO, LNE, qualified besides copy. [SPEAKER CHANGES] Under this language, that would not be the case at this time. [SPEAKER CHANGES] Follow up. [SPEAKER CHANGES] Did you give consideration to others, maybe in the east. [SPEAKER CHANGES] Well, I think we want to move into this water. Maybe once they qualify, I believe, under the language, that is something that could be considered. I think the feeling is to move into the water very carefully, very gradually. When we first set up PBH as a pilot as you recall, that was just one entity and one set of circumstances and I think that we want to have just as much care as we move in with this population as well, very small population. [SPEAKER CHANGES] Do you have a follow up? [SPEAKER CHANGES] On that topic, no. [SPEAKER CHANGES] OK. Representative Blackwell. [SPEAKER CHANGES] Thank you, Mr. Chairman, although I'm going to change the subject. If you want to go to Representative Insko I'll yield my place. [SPEAKER CHANGES] Thank you. Representative Insko. [SPEAKER CHANGES] Thank you, Mr. Chairman. I really want to make sure I understand exactly what's going to happen. so now we have the cardinal innovations in LNE/MCO that manages the money, doesn't deliver any services, they contract with providers. The IDD population has been a contracted service for many, many years, even under the area programs. The area programs contracted out almost all their IDD services to private sector providers, so this issue now as I understand it is to integrate the physical health services with the behavioral health services. Am I right about that? [SPEAKER CHANGES] Yes. And there's been efforts already underway in a variety of ways between all of the LNE/MCOs and Community Care of North Carolina to do more of that, and we need to do more of that across the board. [SPEAKER CHANGES] So the difference would be, so even now, so the LNE/MCO's they are in some kind of cooperative relationship with CCNC where they, do currently any of the LNE/MCO's actually pay private sector providers Medicaid money for providing physical health? Or the physical health services are all fee for service still under Medicaid? For the intellectually/developmentally disabled people, say they live in a group home and they break their arm, they don't go to the LNE/MCO for that, they go to a private sector physical health. [SPEAKER CHANGES] Well, that's where the LNE/MCOs would have to work with providers in the medical community and establish the appropriate contractual relationships to address those issues. So you have partners, really partnerships now between providers and the LNE/MCOs would have to reach out to the medical community and partner in the same way, and of course we would just be talking about those services that would be paid for by Medicaid. [SPEAKER CHANGES] Right, but. [SPEAKER CHANGES] Follow up. [SPEAKER CHANGES] Yes, follow up, sorry. Thank you. So it would be, so now the difference would be that the LNE/MCOs would actually contract with a private sector provider rather than working through CCNC? [SPEAKER CHANGES] Well, I think they could worth through CCNC, it's not restrictive in that regard. [SPEAKER CHANGES] But they would have all of the IDD population for both physical and, I'm sorry, I'm sorry. [SPEAKER CHANGES] It's all right. [SPEAKER CHANGES] Then would have the LNE/MCO, they would have the IDD population for both physical health and behavioral health? [SPEAKER CHANGES] Yes. [SPEAKER CHANGES] OK. Thank you. [SPEAKER CHANGES] Representative Blackwell. [SPEAKER CHANGES] Thank you, Mr. Chairman. I asked for recognition because I had two, what I believe are related questions, but I'll slip in a comment on the topic that has been discussed by the last three speakers. I'm delighted with section 10. I think for too long we've had this artificial division of physical and mental healthcare services.

.... then they need to be under one umbrella and I'm glad we're at least going to pilot it. My questions however, are these, and I think I understand that there's perhaps not a precise answer but I'm hoping that you, or maybe since Secretary Wos is here, can give me at least a ball park answer. How many plans do you anticipate will be available across the state? That's part one of my question or question one and secondly, within a given area, let's say we're talking about my county of Burke [??], what do you all anticipate in terms of the number of plans from which a Medicaid beneficiary in my district would be able to choose? Are they going to have only one plan or are they going to be potentially multiple plan? What do you all anticipate in terms beneficiary choice of plans and the number of plans that may be available? [SPEAKER CHANGES] Well, I couldn't predict for your particular area. I think in the urban areas you would, no doubt, have multiple plans. In rural areas you may only have one plan, in a rural area but there would be nothing that would be prohibitive to having more than one plan. We would certainly, you always like having more than one plan. [SPEAKER CHANGES] Follow up, [??]. If these are going to be provider-led plans, if there were a provider group that met whatever requirements or standards that the department comes up with they would e able to organize and offer a plan within one of these, I guess, 14 regions based on the CCNC regional model? Is that what you're saying? [SPEAKER CHANGES] Right. It may not be 14. That's a number that can potentially change as well. [SPEAKER CHANGES] Representative Insko. [SPEAKER CHANGES] Thank you. I actually have another question on this same issue. As I understand it, this is the IDD population again so as I understand it CCNC has been discussing taking over the aged, blind and disabled population which makes me ask the question of whether or not there will be some CCNCs that will be, would it be possible for a CCNC to, in their management of the aged, blind and disabled, to take on more responsibility for the IDD population across the state? [SPEAKER CHANGES] For CCNC to take on? [SPEAKER CHANGES] Yes. Aren't they reaching more ABD, aged, blind and disabled population? Is that only physical disabilities? It doesn't reach into IDD population? [SPEAKER CHANGES] Well they, I can't speak for CCNC but they are currently working on, I believe a dual eligible program. There's language in the budget on a dual eligibles program. There's language in the budget on a dual eligibles program and those, when you say dual eligible that means Medicaid, Medicare, and those individuals are aged, blind and disabled. Those are the individuals who are the most expensive individuals in the system so there are efforts well underway and we hope more efforts working with the Department to better manage that care. All of this is moving toward stronger ability to integrate the services, integrate the care. [SPEAKER CHANGES] Could I just make a brief statement? I'll try to keep this short but I think, to me that is the question, that as we, historically we've had really physical health care, we've had behavioral health care and there really hasn't been much overlap and we've talked a lot about integrating care so that people, I mean mental illness is not a disease of the spirit. It's a disease of the brain. It is a physical illness so how do we integrate these two separate systems that have grown up so that we have a more integrated care? Where I thought we were was that the MCO, LEMCOs [sp], if a person had, if a mental illness or developmental disability was their main condition, that the MCOs would manage it ....

If it was a physical health, CCNC would manage it, so I guess I'm trying to struggle to see how we move beyond that, where we are right now. But I'm just listening. [SPEAKER CHANGES] Well I would make just a couple quick observations. One, in the original language establishing the LMENCOs, CCNC was part of that language, part of that coordination. The LMENCOs as they have been coming up and getting organized and making their transition from the LMEs to LMENCOs which was tremendous transition that has been going on and it's not fully as someone mentioned, it's not fully arrived at, at this point. They have been reaching out to CCNC and there's a lot that's going on at the local level, at the patient care level already, that just doesn't get seen by it seems like those of us here in Raleigh. That is the effort that everybody understands, everybody that I've talked to, whether it's medical health, behavioral health agrees on, and everybody I think is working toward those goals. [SPEAKER CHANGES] Representative Breisin. [SPEAKER CHANGES] Thank you, Mr. Chair. Request the Senate ?? the amendment forth to the [SPEAKER CHANGES] Okay. Sergeant at arms, would pass out the amendment? All members have a copy of the amendment? Representative Brisson. [SPEAKER CHANGES] Thank you, Mr. Chair and committee members. This amendment actually in section 10 line 37 just helps clarify who's going to be involved with the pilot program and it shall be after shall be is only recipients included in the pilot, and that's all it does. I hope that you can approve this amendment. [SPEAKER CHANGES] Representative Dollar. [SPEAKER CHANGES] Sponsors have no objection to the amendment. [SPEAKER CHANGES] Any other comments, questions on the amendment? Representative Farmer-Butterfield. [SPEAKER CHANGES] I'd like the sponsor of the amendment to respond to a question? [SPEAKER CHANGES] Representative Brisson. [SPEAKER CHANGES] Yes ma'am. [SPEAKER CHANGES] I'm curious why would you want to include only the people in the ICFMR facilities and not others with intellectual developmental disabilities. Is there a particular reason? [SPEAKER CHANGES] For this afternoon, it makes a lot of providers happy in here. [LAUGHTER] [SPEAKER CHANGES] Representative Insko? [SPEAKER CHANGES] What about the people that need the services? [SPEAKER CHANGES] This is not going to have anything to with services. I mean, you're still going to receive the services. This is just about the pilot program. [SPEAKER CHANGES] So the pilot would only include people with placements in ICFMR facilities and not other people with intellectual development disabilities in the community? [SPEAKER CHANGES] Representative Dollar can probably better answer that. [SPEAKER CHANGES] Let's [SPEAKER CHANGES] Staff wants to comment on that. Miss Johnson? [SPEAKER CHANGES] Thank you. Yes, the language the only recipients would follow for all the folks in 3. So it does still include the individuals who reside in private intermediate care facilities, as well as the rest of the folks who are eligible for the 1915C so it doesn't change the population. [SPEAKER CHANGES] Representative Insko. [SPEAKER CHANGES] I was just going to say that's the way I read it too. It doesn't really change the population that we're going to serve. It would still be anybody who's eligible for the innovations waiver and people who are in ICFMR facilities. And that's the local ICFMRs, it doesn't include anybody in the B waiver for example. Excuse me. [SPEAKER CHANGES] Any other questions or comments on the amendment? All those in favor say aye. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Those opposed? The ayes have it. The amendment passes. Any other questions on the bill? [SPEAKER CHANGES] Mr. Chair. [SPEAKER CHANGES] Representative Jackson. [SPEAKER CHANGES] Chairman Dollar, I wanted to ask about section 10. Is that subject to approval? I see the feds, do they have to approve before we can start that? [SPEAKER CHANGES] Yes. [SPEAKER CHANGES] Follow up, Mr. Chair. And do we have any idea how long that process might take? I'm just

[0:00:00.0] Following upon Representative Samuelson’s question about whether or not we need to push this out further. [SPEAKER CHANGES] Well, the histories any judge of that it would be sometime. [SPEAKER CHANGES] One follow up, have there been any discussions with the Federal Government about this potential type of change to see how they might feel about this or how they ruled in other states, is other states try? [SPEAKER CHANGES] I don’t know if somebody else may know the answer of that question but it would be I would think subject to be in corrected that this type would require lots and lots of paperwork, lots and lots of documentation and questions being answered. So, others might be able to better predict CMS than I can. [SPEAKER CHANGES] Representative ____[01:02]. [SPEAKER CHANGES] Thank you Mr. Chairman. Answering your questions first of all the in terms of goals portion of the bill mentioned the six goals that is not mentioned the goals that were indicated from advisory group goals including the whole person goal and I assume that’s the purpose of the bill in general perhaps I just wanna know why that didn’t mentioned in, the second part of my comments is a question involving the permissive nature or impressive nature of this bill for ACOs to develop which would lead the broader LIT plans into a possibility being capitates contracting I can’t see that can happen but otherwise because you have information to begin to provide a LIT plan, I question what is a provider LIT plan is to finding this bill because it doesn’t define that and my question is does that include the several accounting organizations that are now in the kind of care consortiums growing up around the state and the ones that blend medicate Medicare, commercial care patients and their care overall which is a much more efficient way of caring them out and that’s what the insurance companies share their demographic, the disease prevalence data with the people actually involved in the risk exposure. So, House Bill providers as well as the insurance companies all get into same vertically integrated ACO model, is that in anyway not permitted by the structure that you are contemplating here or does it encourage them in anyway because I don’t really see that fletched out here? [SPEAKER CHANGES] Well, I couldn’t answer for any specific plan without analyzing the details of that plan but the ones that I’m familiar with in the state are provider lit. So, that’s what we were looking at is provider lit, I think the providers in the state have done an exceptional job I mean if you look at, and you can look at today at the claims numbers, the claims span that the challenges we have had in medicate really haven’t been with claims per say, our providers have been doing an outstanding job and have been point out the family physicians for example, the general practitioners, the participation rate in North Carolina far exceeds some of the other states that are out there. So, folks are participating and engaged in the plan and I think the year of the advisory group that studied this in great detail was that provider lit plans where they way to go and if those ACOs as they develop want to contract with insurance companies to help with their operations, help with their development they will certainly be free to do that. The department and working through the details of the plan will be developing and going through all of the need of questions that is really impossible for the General Assembly to sit here and answering. It’s like a 400, 500 page bill. [SPEAKER CHANGES] Mr. Chairman any follow up? I’m just making observation that when you are doing ___[04:43] building a structure which was a complicated matter dealing all the providers to move the bill in one box. Getting the ___[04:53], the disease problems and the claims ___ forward how to handle it and going forward particularly as you are moving from that transitioning to an ACO… [0:04:58.6] [End of file…]

From a ?? model to a capitated model. It’s really be more ethically and fiscally desirable to have all patients treated in the same manner. Essentially using the ?? claims data and there may be a difference obviously in how they stratify obviously with moving from medium and low to medium to high risk patients as they all do eventually as you age. But Medicare, shared subsidy plan, all these things come to plate the same kind of structure but having Medicare and Medicaid and commercial essentially all treated under the same general ethical and fiscal concept is ?? a much more desirable way to go and I hope that’s where this is headed. Thank you. [SPEAKER CHANGES] Representative Avila. [SPEAKER CHANGES] Thank you Mr. Chairman. I want to go back to the very popular section 10 and clarify date issue. As I understand it what we’re saying is that they will report on the ?? been a problem getting started. And then we’re going to have periodic status reports as the pilot comes together and is finalized and put into operation. Am I reading that correctly? [SPEAKER CHANGES] Yes ma’am. [SPEAKER CHANGES] Representative Farmer-Butterfield. [SPEAKER CHANGES] Thank you Mr. Chair. I have a couple of questions. One is I understand there’s a group already in existence that’s working on medical home health and health initiatives for people with intellectual development disabilities. Will they be looked at in terms of bringing stakeholders to the table? Because I know there’s a lot of work that’s being done in that area already. [SPEAKER CHANGES] I’m not familiar with that particular group but would check into that. [SPEAKER CHANGES] I’ll get you some information on it, okay? And my last question. This is along Representative Jackson’s comments earlier. And I was wondering if the bill’s sponsors and the secretary thought it would be necessary to put in some type of catch-all statement about CMS approvals, if that is indeed necessary during the course of implementing this. What do you think? [SPEAKER CHANGES] That part is covered under section 8. [SPEAKER CHANGES] Representative Insko. [SPEAKER CHANGES] Thank you, Mr. Chairman. I think the original bill was 10 pages, and this is 3 pages. So this is more conceptual than detailed and I guess I have some concerns about that. About getting from these broad statements to steps and a process that can actually be tracked and the reason I’m saying that is because of our experience with mental health reform. When a lot of it was in more conceptual and narrative form rather than more goals and deadlines. And so I’m wondering how, what we would see as an example from the first report that comes from the department. Would we see more detail, or how do you anticipate that, working through? So when you, you were here when we ran into problems and we didn’t really have a stop loss way of saying let’s stop and see where we are. And it’s inevitable that things are going to happen that you don’t anticipate. So I’m curious about just how we will move from this more global conceptual to more implementing actual on the ground. [SPEAKER CHANGES] Representative Insko, I think what we’re doing here is we’re setting out the goals. We’re setting out what we want the system to look like July 1 of 2020. All of the details, they myriad of details to get there, I think it would almost be impossible to write that bill. I think the General Assembly is setting out the direction. Input has come in, most particularly the recommendations from the administration after their study. What we’re really wanting the department to do, in working with providers, is to bring back the details of the plans. Get deep into the weeds that you have to get into, and send the appropriate signal to the

[0:00:00.0] Providers and this gets back a little bit to Dr. ___[00:03] question and that is we already have ACOs in Medicare of an operational they are more coming online, we have physician LIT, ACO cornerstone is when the people talk quite a bit about in the central part of the state that is doing a fantastic job with what they are doing, there are several hospital systems that are on the way, there are couple of different ways, there are two or three different ways in which I’m not expert enough to explain for how you do an ACO for example? There is care integrated networks in, there is all sorts of acronyms there. So, what the General Assembly needs to do is to setup what it is we want? What we want to see how the system and empower the department and empower providers to give us the details of the plan and what will need to be taken up with the Federal Government and Federal Partners? And off course as you know, if we move toward a large 1150 way where there is a variety of questions that would have to be answered some of those or anticipate in this legislation but the ___[01:23] would be have __ involved as well. [SPEAKER CHANGES] Representative ___[01:28]. [SPEAKER CHANGES] Thank you Mr. Chairman, if I could I would like to make a brief statement. I think one of the things that is scary is this spending quite sometime since we have seen direction of this complicated translated on three pages of paper. However, I do think there is a difference on the way it was done the first time, first time it was done and then loose and there wasn’t sufficient collaboration and oversight and involvement with the General Assembly and I don’t think that’s gonna be the case here simply because we have got history to take into account. What we have been doing in the past is to drill around hole and then ask all those square pits and ___[02:17] and triangular pits to fit the ___. That never works because they all are under different circumstances and have different ways of going about things and this is why the approach here has been one that I have whole heartedly supported, the people on the ground know what works and when they get together to talk they can figure out where the pieces need to be reshaped and fitted and everything because everybody is working towards the same goal with their own resources, their own experience and their own abilities. So, I don’t think it should be scary to anybody simply because it’s not very prescribed but it’s gonna be something where and if it’s gonna have to be kept to the far because it does have the potential for being a disaster if we don’t but I think with people involved, the concerns that they have and the dedication that they have got to their area in this medical healthcare facility if we get them all to the table and understand that everybody has to contribute and when we won’t listen to everybody’s concerns and nobody will be excluded maybe because we don’t wanna hear what they have to say or they are not fitting into the plan, I think we can come up with a phenomenal plan that could really put North Carolina on the map as far as healthcare. [SPEAKER CHANGES] Representative Wilson. [SPEAKER CHANGES] Thank you Mr. Chairman this is an appropriate time for motion. [SPEAKER CHANGES] Okay. [SPEAKER CHANGES] Representative ___[03:56] [SPEAKER CHANGES] Thank you, I just have one question and sitting here listening. The providers that we have been using NC tracks will they still be using that for this system to well it be a different thing, the billings? [SPEAKER CHANGES] I think that probably be a question that will need to be answered, I think that’s kind of depending on, if you move toward one sort of captivate system that may handle that differently than it’s currently being handled when it moves out from the long term as is probably actually no I mean because we knew that to a true capitation then you are receiving a block of money and you are working that block of money with your patients. [0:04:59.8] [End of file…]

Okay. Would anyone, any visitors in the audience out there like to speak on this matter? Step up to the microphone, identify yourself for the record, please. [SPEAKER CHANGES] Thank you, Mr. Chairman. I'm Chip Baggett, I'm director of Legislative Relations with the North Carolina Medical Society and we just want to take this opportunity, on behalf of the largest physician organization in the state, to thank you for the work that you've done on this. We think that Medicaid reform is one of our top priority issues for our members and it affects how we interact with our patients greatly so we've been paying close attention to it. As Representative Dollar pointed out, hundreds of people have come together to make recommendations that the Governor has formulated and recommended a Medicaid reform plan to this group that we think is tailored to meet the needs of North Carolina. We think that the plan is one that our society has enthusiastically supported and we believe that the budget adopted by this House has encouraged and adopted that plan's direction. We applaud you for that budget and we thank you for considering our concerns during the deliberation that you had during that debate. The bill that you're considering today is one that we generally support, while we still have significant concerns about moving to full capitation. This plan sets a glide path for physicians and other providers to systematically transition to a new system of care delivery and gives us the time to make something like that work. We think that there are strong reasons to let the department have the opportunity to work with providers to figure this out along the way and we appreciate the considerations that Representative Dollar pointed out, especially in section 9, that express the commitment of this body to allowing for that time to work. However, we do have serious concerns about the inclusion of section 10. We believe, in our opinion, that it is inconsistent with the Governor's proposal and oppose that section at this time. We look forward to continuing to work with this body to figure out what to do next with Medicaid reform but we would like to support this bill without section 10 included. Thank you. [SPEAKER CHANGES] Good Afternoon. My name Julia Adams, I am the Assistant Director of Government Relations for The Arc of North Carolina. I am also the lobbyist for the North Carolina Association of Rehabilitation Facilities and the lobbyist for Mark Inc. In total I represent three major organizations that go through the mountains to the oceans. I represent people with intellectual and developmental disabilities. I'd like to make a few comments. The first comment is I would like to extend a deep thank you to all of your work on the Health and Human Services budget over this session. You have presented us with a very reasonable, a very rational, and a very caring budget for people with intellectual and developmental disabilities across this state as well as for our aged[?], blind, and disabled population. We appreciate your hard work and listening to families as the budget process was rolling out. We would also like to extend a deep thanks to Secretary Wos for including The Arc of North Carolina, North Carolina Association of Rehabilitation Facilities, and Marc Inc in the incredibly intense and very deep work of Medicaid reform in our state. We are present at every single Medicaid Advisory Committee, we were listened to, our providers were there, our families were there and we thank you very much for that. That said, we do have a concern about section 10. The Arc of North Carolina, the North Carolina Council on Developmental Disabilities, and multiple organizations across the state very much want a very good and solid integrated healthcare plan for people with intellectual and developmental disabilities. We believe that that is critical to the overall health of an individual with cerebral palsy, spina bifida, autism, and all of the individuals we serve under the state definition of IDD, including individuals with traumatic brain injury under the age of 21. However, we had not seen this language until last evening. There are several work groups of full stakeholders participating right now in a council grant as well as in a federal grant called Health Me[??]. Specifically The Arc of North Carolina has been reaching out on a regular

basis to people with intellectual and developmental disabilities across our state to teach them more healthy habits, going to doctors, making sure that those appointments are made, and following up. We look forward to working with the sponsors of this legislation to ensure that if this bill moves forward that all stakeholders are present to decide and to contribute to whatever section 10 becomes. We appreciate your time and we appreciate you letting us speak today. [SPEAKER CHANGES] Thank you. Would any other visitor like to speak? [SPEAKER CHANGES] My name is Peyton Maynard, I represent the Developmental Disabilities Facilities Association. I'm only speaking on their behalf. This is the organization that operates the majority of the ICFMR community based group homes and facilities in the state of North Carolina. I just wanted to point out, first to tell you that I'm in a very difficult position here and I hope you will appreciate the gravity of that position. We have a bill before you which is probably one of the most important bills that you will pass, hopefully, this session, the Medicaid Reform Bill. There are people all over this state, from the medical world, the mental health world, the Secretary's Office, Department of Health and Human Services who have crawled over hot coals, who have lifted enormous weight with the Chairman and the folks that have been working directly on this subject to get to this point where you can advance this notion of Medicaid reform and get North Carolina headed in the right direction. We support that. That is the right direction. We're solid behind the Chairman, solid behind the bill sponsor on that issue. I wanted to speak for just a moment or two just to let you know about section 10 since it is ICF, you say the words ICFMR facilities in here, I feel compelled to speak. That's the majority of my clients in that area. The ICFMR facilities are 24 hour facilities. They serve very involved folks with intellectual developmental disabilities. We run a nurses, doctors, meals, transportation, clothing, habilitation, training the full complement of services 24 hours a day. We have a lesser intense service called the DDA group home. Those folks in there participate in the CAT waiver often and they are supported 24 hours a day. We have, were introduced to this concept a few days ago, which is fine. If you ask us, if you ask any one of my clients, "do you want better coordinated healthcare?" The answer would be yes. We all strive for that. We all have, we want to do the best that we possibly can do to get good healthcare for our clients but this is just a concept. We haven't seen very many of the details and that gives me a bit of concern. I will explain to you that in ICF every one of those has a doctor now. We have those all under contract. The majority of those are already enrolled in Community Care of North Carolina. I believe the number was 4,000 clients, probably means they are close to 4,000 physicians, if not more, because often times these individuals see a lot of specialists, a lot of nephrologists, a lot of orthopedic surgeons, a lot of heart folks, endocrinologists, there's a lot of co-attendant type conditions that are associated with this. We would have concerned that we would want to work through the details of this particular proposal before we launch off. It occurred to me, as I was standing there, glancing through the bill that if you read the bill, if you read the first part of the bill where it says we're going to have an integrated, folks are going to get together, folks are going to come together, you wouldn't need section 10. You wouldn't need to carve that out separately because the mental health world would be automatically included into all of the planning, all of the hard work that these folks over here on this side of the room are going to go through in the next few years. I would encourage you to make us do that. Make us get together. Don't separate us. Dont separate us from our physicians, don't separate us

From our, our, our standards of care that we have in our homes. Make sure that this whole thing is integrated is, is, is in one place and we’re all planning and moving along together. Thank you very much. [SPEAKER CHANGES] Thank you. Anyone else? Please go to the microphone. [SPEAKER CHANGES] Hello, I’m Pam Shipman and I am the CEO of Cardinal Innovations. Want to just address two things. One is that the concern that we have that in the overall Bill does not include the ?? of the 1915 b c waiver that was in the original department Bill that was preferred and, yeah, that’s the concern for us and other ?? because of all the work and money and time that has been invested in the development of that system. So I just want to point that out as an area of concern. And Section 10 the idea of an ??. You know, one of the things about our system that’s really special and really important is that we really look at the culture. It is a consumer driven culture, person first thinking and while medical care is very, very important to the people we serve, it’s a support. It helps to support them to live as normal a life as they could. And so, being able to work with medical, medical systems or closely as part of the integrated plan for the person, you know, is really a great opportunity to put something forward that could be really a, a cutting-edge model. You know, it’s a very, a very small model. Therefore, you know, we would want to make sure it works before it was expanded or move forward. We would intend to use measures to make sure that, you know, we have pre and post measures so that we know what the consumer outcomes, what the cost outcomes are but it’s really a chance to do something very exciting, very neat for a very special population that has high cost but it also fits in the culture that we have for the people that we serve which is really around how they live their lives. And so, we really think that just having a chance to see if this could work would be an important experiment for North Carolina. It may or may not work. We believe it will and we believe that we have providers that are interested in doing this with us that absolutely are capable of making it work but if you have, you know, a specially health home for that consumer, a lot of their care is going to come there, sort of like a one-stop shopping where you have a lot of things together instead of split up. And, I really think that this could be so neat and so exciting for people with disabilities. Obviously the Bill doesn’t have a lot of detail in it because there has to be, the model has to be figured out, we need to look at financial models, we need to look at service models, we need to talk to the consumers, we need to talk to the providers that would be involved and none of that is, has been done. And that is part of the process of developing the waiver or the waiver amendment. So, you know, I would hate to see us not have this chance to try something on a very small scale that could be very effective and very good for people with very complex disabilities. So that, you know, I think that’s important for you guys to consider as you look at that Bill. Thank you. [SPEAKER CHANGES] Anyone else wishing to speak? Okay, thank you. Would anyone from the department like to speak? [SPEAKER CHANGES] Mr. Chairman. [SPEAKER CHANGES] ?? [SPEAKER CHANGES] Thank you very much Mr. Chairman and Representative Dollar, thank you. I want to take this opportunity to, to thank you for your efforts and your leadership and working with us. We are very pleased with the House Bill that it closely aligns with Governor McCory’s Medicaid Reform Plan. We are all interested in the same goals and with this Bill; it offers us the flexibility to achieve those goals. It, as you have mentioned Representative Dollar, it does not box someone into a ready-made product. It allows the flexibility. It allows the creativity. It allows everyone, all our stakeholders, the General Assembly and the department to continue to work together so we do ultimately provide the best possible service and have the best possible out

And yet have a budget which is possibly predictable so I thank you very much for your openness and your ability to put forward a plan that will offer us that flexibility. Thank you again. [SPEAKER CHANGES] ?? secretary. ?? Would you like to make any further comments? [SPEAKER CHANGES] Well just this, I thank all of the speakers and the support that's been expressed along with the concerns. And I do believe that this plan allows for doctor driven departmental control and recipients being more responsible for their own healthcare. All of the elements of folks that need to have skin in the game-- the providers, the state, as well as recipients -- are reflected in this plan. And I appreciate your consideration and support. [SPEAKER CHANGES] Representative Brisson [SPEAKER CHANGES] Thank you Mr. ?? a motion to fulfil a community substitute. Let anyone unfavorable [SPEAKER CHANGES] House amended and referred to appropriations. [SPEAKER CHANGES] Correct. [SPEAKER CHANGES] Rolling to the PCS. Any other questions? Representative Jamison. [SPEAKER CHANGES] Just one question for the sponsor. A couple of the speakers indicated that they were confident that you would be working with them on Section 10, but now we're at Senate onto appropriations. Can you comment on that at all? [SPEAKER CHANGES] I would feel certain that additional discussions will take place. That's the normal process. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] We have a motion on the floor. Any other questions? Comments? All those in favor say aye. Collective: Aye Those opposed? The ayes have it. The motion passes and the bill is referred to or sent on to appropriations. Thank you all for coming this meeting is adjourned.