Health Choice/Medicaid Change - August 2, 2005

Social Services Consortium,

Because of a decimal point error made by DHHS, the Health Choice program was found to be seriously short of money for the next fiscal year. The GA has responded last night by making a decision to moving children 0-5 to Health Choice, reducing doctor reimbursement rates for children 6-18 and capping enrollment growth to no more than 3% every six months. See article below for more details.

Karen

NEW CHOICES: North Carolina will move 30,000 children from the N.C. Health Choice program to Medicaid, shifting all those under 6 years of age . House and Senate negotiators agreed to the move as part of a plan to revamp Health Choice, which provides health care to children of the working poor, after officials learned that a calculating error means federal dollars will run out sooner than anticipated. State health officials expected to be able to hold off wholesale changes for another two years, but rising enrollment that is outstripping federal outlays would have eventually forced the program to be reworked. In addition to moving the youngest children to Medicaid, doctor reimbursement rates for children ages 6-18 will drop . Initially, the rates will be Medicaid plus 15 percent but will fall to current Medicaid rates in the 2006- 07 fiscal year. When treating Health Choice patients, doctors and other health care providers now receive roughly 160 percent of Medicaid rates . Rep. Edd Nye, D-Bladen, a co-chair of the House Appropriations Committee, said the state will also use case management to try to hold down cost and begin limiting enrollment growth to no more than 3 percent every six months. Without the changes, the state would have been forced to pump tens of millions of dollars more into the program or slash enrollment. The House and Senate had already agreed to provide $ 14.7 million this year and $35.5 million next to cover enrollment increases. Nye said he believes the changes would not cost any
additional state money, but others familiar with the negotiations said the state might have to kick in another $2 million this year while seeing substantial savings in subsequent years. The shift, though, would mean that county governments -- which provide about 5 percent of total Medicaid dollars -- would have to come up with a total of around $3 million a year. "Nobody wanted to restrict enrollment and nobody wanted to knock anybody off the current program," Nye said. The changes largely fall in line with those already proposed by Gov. Mike Easley and the Department of Health and Human Services. With the move, any children under 6 whose parents earn less than 200 percent of the federal poverty level will be entitled to Medicaid services. Unlike Medicaid, the Health Choice program, created in response to legislation passed by Congress in 1997, is not an entitlement program and in the past has seen its enrollment capped by available money.