NC Medicaid: “A Modest Proposal for Medicaid Reform”

Medicaid recipients in North Carolina are not getting the same, quality health care that citizens with private insurance receive.

Health care providers refuse to accept Medicaid due to low, Medicaid reimbursement rates.  There are not enough Medicaid providers for all the Medicaid recipients.  Medicaid recipients have difficulty finding health care providers, especially dentists and other specialists. Many Medicaid recipients are forced to go to the emergency departments (EDs) for medical issues that could have been conducted in a primary care doctor’s office, thereby creating excessively long, waiting periods at EDs.  Medicaid recipients, who understand they need mental health services, are left to the whim of an employee at a managed care organization (MCO) as to whether the recipient meets medical necessity for a behavioral health care service.

I’ve blogged before that the disparity between the health care a Medicaid recipient receives and the health care a citizen with private insurance receives reminds me of the “separate, but equal” doctrine during the Civil Rights Movement. 

Medicaid recipients in North Carolina are not getting the same, quality health care that citizens with private insurance receive.

Separate is not equal!

As a nod to the great author, Jonathan Swift, I have “A Modest Proposal for Medicaid Reform.”  Jonathan Swift is probably more well-known for “Gulliver’s Travels,” but, by far, my favorite Swift work is “A Modest Proposal.”  With “A Modest Proposal,” Swift defined satirical writing, but about 300 hundred years ago. 

“It is a melancholy object to those who walk through this great town or travel in the country, when they see the streets, the roads, and cabin doors, crowded with beggars of the female sex, followed by three, four, or six children, all in rags and importuning every passenger for an alms. These mothers, instead of being able to work for their honest livelihood, are forced to employ all their time in strolling to beg sustenance for their helpless infants: who as they grow up either turn thieves for want of work, or leave their dear native country to fight for the Pretender in Spain, or sell themselves to the Barbadoes.”

Interestingly, Swift published “A Modest Proposal” anonymously in a newspaper.  At the time Swift wrote it, Ireland was in an impoverished state with an over-population problem.  Some lawmakers had suggested a number of population-control methods that, apparently, insulted Swift to his core.  One person suggested running the poor through a joint-stock company, presumably for the “rich, educated” people to control the “poor.”  Others suggested population-control, such as preventing childbirth for certain demographics.

Similarly, today I was listening to CNN when the newscaster explained that a mother of an autistic child received a hateful letter from a neighbor about her autistic child.   

Here are some statements found in the letter: (Please understand that these words are not mine.  In fact, when I heard this story, I was torn between crying for this mother and child or becoming infuriated at the ignorance and narcissistic hubris of the author).

The letter goes on to criticize Begley for allowing Max to play outside and says: “That noise he makes when he is outside is DREADFUL!!!!!!!!!! It scares the hell out of my normal children!!!!!!!”

The letter also tells Karla that she has a “retarded kid” and “should deal with it properly”.

“What right do you have to do this to hard working people!!!!!!!! I HATE people like you who believe, just because you have a special needs kid, you are entitled to special treatment!!! GOD!!!!!!”

The writer finishes by demanding the family “go live in a trailer in the woods or something with your wild animal kid!!!” and asks the family to do the right thing and move or “euthanize him. Either way, we are ALL better off!!!”

I hope that the above words impacted you as they did me.  I simply cannot believe that a person…any person….would THINK those words, much less write those words.  Has our society become so callous to people with special needs that the people with special needs have become (in the author’s view) burdensome or annoying?  To the author of that hateful letter, I say, “Shame on you!” 

I also say, “If there were laws against being heartless, you would be sentenced for life!”

In “A Modest Proposal,” Swift suggests (satirically) that the impoverished Irish might ease their troubles by selling their children as food for rich gentlemen and ladies. “This satirical hyperbole mocks heartless attitudes towards the poor, as well as Irish policy in general.”  See Wikipedia . (It amazes me that the authors of Wikipedia draft better English essays than I did in college).

According to DMA, in 1999-2000 more than 1.22 million individuals were covered under North Carolina’s Medicaid program.  By 2009, that number had grown to more than 1.81 million individuals, an increase of approximately 50%.  That means that 1.81 million people in North Carolina depend on Medicaid.  These are our neighbors; these are our children; this may even be us.

I have my own “A Modest Proposal.”  My “A Modest Proposal” is:

A Modest Proposal for Medicaid Reform.”

Our Medicaid budget  is approximately $14 billion.  According to Kaiser, our Medicaid expenditures were $10,546,984,914 in fiscal year (FY) 2011.  However, Kaiser also notes that “expenditures do not include administrative costs, accounting adjustments, or the U.S. Territories. Total Medicaid [federal and state…as in, nationwide] spending including these additional items was $427.4 billion in FFY 2011.”

We spent $10.5 billion (estimated) on Medicaid services for Medicaid recipients in FY 2011.  According to the January 2013 State Audit of DHHS, in fiscal year 2011, North Carolina Medicaid incurred administrative expenses of approximately $648.8 million.  Now, here in 2013, with the MCOs in place statewide, I wager that the administrative costs for Medicaid for fiscal year 2013 will, at least, double due to the salaries and benefits awarded to MCO employees. 

67.4% of our $10.5 expenditure went to acute care (hospitals).  No shock there. Medicaid recipients generally do not receive continuity of care through a primary physician.  Therefore, many Medicaid recipients end up in the ED for an ear ache (ever wonder why the waiting period at the ED is so long?). 

Plus, North Carolina is, sadly, floundering as to providing mental health services, so it is no wonder that  “almost one-third of ED visits by those with underlying mental health disorders resulted in hospital admission, more than twice as many as those without underlying mental health disorders,” according to a new study released by North Carolina School of Medicine researchers.  For the study, click here.

28.8% of our Medicaid expenditure went to long-term care.  Again, not surprising with the rise of more aged, NC citizens.  Kaiser Family Foundation data for FY 2009 show that approximately 27% of those enrolled in the North Carolina Medicaid program were categorized as aged or disabled, and that the cost of services for those 2 categories of recipients made up approximately 63% of the program’s total costs that year.

3.9% of our Medicaid expenditures for 2011 went to DSH payments.  Disproportionate Share Hospital (DSH) adjustment payments provide additional money to hospitals that serve a significantly disproportionate number of Medicaid recipients.

3.9 + 28.8 + 67.4 = 100%

North Carolina’s total Medicaid spending including these additional items was approximately $11.149 million in FY 2011. ($10.5 billion + $648.8 million administrative costs). According to Beth Wood’s January 2013 Performance Audit, private contractor payments represent about $120 million (46.7%) of DMA’s $257 million in administration expenditures for FY 2012.  Almost half of the administrative costs for Medicaid, in 2012, went to contracted companies, such as Piedmont, Carolinas Center for Medical Excellence (CCME), Public Consulting Group (PCG), etc…

So…here is my “A Modest Proposal:”

If you take the total Medicaid budget (currently, over $14 billion) for the fiscal year ended June 30, 2012, and divide the budgeted amount by 1.8 million (the approximate number of North Carolinians on Medicaid), you get: $7,777.78.

$7,777.78/year for each Medicaid recipient.

My health care premiums for a “Cadillac health care” with my husband costs $9000/year.  And it is great health care.  All copays are $10 for generics, $15 for non-generic.  Doctor visits are $10, a specialist is $25.  The beauty of my health care, though, is the deductible is only $500.  I hit $500, and everything is covered.

Now, mind you, the $9000 ($750/month) includes my husband.  If I wanted individual insurance  it would only have cost $228/month or $2,736/year.  Why the addition of my husband increases the premium from $228 to $750, I have no idea, but it does. (He does not even have pre-existing conditions!!! In fact, he flatly refuses to visit a doctor unless pending death.  In my mind, he should have been cheaper than I).

As an individual, in order to pay for this “Cadillac” policy, you would have to pay $2,736/year.  Add in the $500 deductible and the total cost (barring unexpected and individual costs) would  be $3236. 

Our Medicaid budget allows each Medicaid recipient approximately $7,777.78/year. 

First, I propose North Carolina downsize 80-90% of the Division of Medical Assistance (DMA) and keep running a much smaller DMA for the sole purpose of determining yearly Medicaid eligibility, thereby cutting almost all administrative costs.  I also propose hiring ZERO contracted companies for Medicaid.  There is no reason for any contracted companies under my “A Modest Proposal for Medicaid Reform.”

17,000+ people are currently employed by Health and Human Services.  But employment of citizens is not a reason to maintain an agency.  Therefore, if we can manage Medicaid without 16,500 employees (which my “A Modest Proposal for Medicaid Reform” purports to do), then we are paying unnecessary administrative costs.

Secondly, taking the Medicaid funds, and, instead of paying administrative costs to DHHS, DMA, PCG, CCME, all the MCOs, we purchase excellent, quality private insurance for each Medicaid recipient.  We pre-pay the deductible for all Medicaid recipients.  We hand the Medicaid recipients a private insurance card that is “pre-paid” with no deductible.

A pre-paid, private insurance card!  With no deductible! (Because the deductible is paid).

No more doctors refusing Medicaid!  Think about it….all doctors would take the new “Medicaid,” because the recipients would have private insurors paying the full price for medical services. 

No more placing the burden of whether a recipient meets medical necessity for a medical service in the hands of DMA or a contracted company.  The private insuror would take on that burden and use the same standard of medical necessity as it does for all its consumers.  And why not? The insurance company is getting paid the same…

Medicaid recipients would get quality care just as if they were not Medicaid-eligible.  And isn’t that our goal? For the Medicaid recipients to be cared for just as well as if they were not Medicaid-eligible?

No more difficulty finding health care providers that accept Medicaid. Medicaid recipients would have the “Cadillac” Blue Cross Blue Shield just like I do.

No more excessively long, waiting periods at the ED! Medicaid recipients would benefit from continuity of care just like I do.  No need to go to the ED for an ear ache.  The primary care physician can tend to the ear ache.

No one would worry about Medicaid fraud anymore because, as to health care, everyone would be the same.  (So, we could also eliminate the need for Program Integrity).

No more Medicaid provider contracts, as all health care providers would accept the new “Medicaid.”

No more Medicaid recoupments.

I profess, in the sincerity of my heart, that I have not the least personal interest in endeavoring to promote this [Medicaid reform], having no other motive than the public good of my [state], by advancing our trade, providing for [Medicaid recipients], and giving some pleasure to the rich.

Think what an impact North Carolina would have on the nation if we were to implement my “A Modest Proposal for Medicaid Reform!!”

About kemanuel

Medicare and Medicaid Regulatory Compliance Litigator

Posted on August 21, 2013, in Behavioral health, Beth Wood, Budget, Dental Medicaid Providers, DHHS, Division of Medical Assistance, Health Care Providers and Services, MCO, Medicaid, Medicaid Budget, Medicaid Costs, Medicaid Eligibility, Medicaid Fraud, Medicaid Funds, Medicaid Recipients, Medicaid Recipients Under 21, Medicaid Reform, Medicaid Services, Medical Necessity, Mental Health, Mental Health Problems, Mental Illness, North Carolina, Office of State Auditor, Public Consulting Group, Unnecessary Medical Services and tagged , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink. 7 Comments.

  1. I’m all for it Knicole. Great ideas!

  2. This is absolutely fantastic. I’ve proposed something a bit similar to replace the ACA. Alas, Dick Lugar did not reply to my letter describing it (awfully polite of him).

    Why not give vouchers to secure universal healthcare? That leaves it in the hands of private industry and choice. There’s a revolutionary idea!

  3. I love your post and I am all for your plan! But unfortunately I think it is flawed. You forgot to add up the bill and subtract from the total cost of Medicaid, all the services that Medicaid is providing, which is why you need Providers. Private Insurance will never pay for an I.DD./Behavioral Health and CAP services. Private Insurance won’t pay for In Home Care (PCS) services. There are a lot of benefits Medicaid provides and foots the bill for that Private Insurance will never cover. I have often been jealous of Medicaid Recipients for this reason because of the services. I have a handicapped Adult in an I.D.D Group Home. Private Insurance won’t ever cover his Residential Rate plus the Base /mo. Adult Care Home PCS fees, and Nursing Homes with Medicaid recipients. Please do also include them in the Medicaid bill. Just subtract all but the Health Care Part from your figure. I know there are long term care Insurance Policies separate from Health Insurance, but most folks don’t have that Insurance. At least the poor have some health benefits and great OTHER benefits over private insurance. I’m an R.N. with a marred private insurance record a “pre-existing condition”. Even though I am still working, I have t pay out of pocket 700 bucks per month / with a 2500 deductible/5000 max /yr. out of pocket. I am working part time and by the mercy of the company, who allowed me to go on their group insurance plan at stated rate above. I am working at age 59 and scared because I must have Health Insurance and work whether I feel like it or not because I can’t afford the luxury of not working, and the risk of losing everything I’ve worked so hard to save for retirement, as it would take all my hard earned retirement saving through the years to pay the High Insurance Premiums. Because I am a professional, I can’t easily get disability, like someone that is a “common laborer with no skills” under the SSD laws. I am looking forward to seeing how these issues are dealt with in the future when Obama care comes to be. Flatly I really don’t want Private Health Insurance anymore, I want the Government Health Insurance Plan.
    Another thing that is costing Medicare, Medicaid and Private Insurance out the wazoo and inflating prices is the Price that’s Allowed and paid for Surgical procedures verses the actual time involved by the surgeon. The disparity between the cost of Preventive Care and payment of the General Practitioners that provides that care verses, the inflated prices paid to a surgeon. There is too much discrepancy between that surgical paid out cost and then Medicaid not paying fairly to those responsible for the overall well being and health of the patient. That is one big cause of the sky-rocketing cost of Health Care and Insurance. Also don’t let hospitals “poor mouth” about reimbursement. They are making money hand over fist to re-invest in expanding services and adding more expensive test and procedures to “get more dollars” and use those tax deductions at the end of the year

    . 30 yrs. ago when my son was born the only help I got was from Private Insurance when they paid my son’s medical bills, medications through the years and private speech and physical therapy. That’s IT! I didn’t get CAP services for I.D.D. because we made too much money to get Medicaid. I even called a service listed in the phone book for help to be told, “we only take Medicaid patients”. So then you say well then you don’t need the State to foot the bill and you can pay for it yourself all those services that Medicaid provides that Private Insurance didn’t. Instead of having a CAP worker to help give me relief, I worked long 12 hour nightshifts, while my husband was the babysitter, then came home, drove kids to school and set alarm clock to go pick them up. I had really NO help until he reached 18 and could get disability and Medicaid except for the fact that he continued speech, physical therapy, and special education by the school system. What wonderful services Medicaid provides to the handicapped I found out after he turned 18 ! I’m glad they now have advocates to help parents know how to get help for the disabled child.

    What you stated otherwise in your synopsis of the situation and parts of your solution would definitely be a step in the RIGHT direction.

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