Access to Health Insurance
Expanding Medicaid has proven to greatly improve the general health and well-being of citizens who can access affordable health insurance coverage. Under the Affordable Care Act, North Carolina is eligible to expand Medicaid to include as many as a half-million low-income workers who make too much to qualify for the program now, but too little to qualify for health insurance subsidies on the online health insurance marketplace. North Carolina is one of only 12 states not moving to add those extra people to the program.
Medicaid expansion has been a top policy priority for Democratic Governor Roy Cooper since taking office in 2017, but the Republican-controlled legislature has continued to push back on expansion. Many thought that 2021 would be the year North Carolina expanded Medicaid due to incentives included in the federal government’s American Rescue Plan Act. The bill incentivizes non-expansion states to close their coverage gap with a two-year, 5% increase in the federal match rate for Medicaid. For North Carolina, that would mean an influx of between $1.7 and $2.4 billion over the next two years. The federal government’s Build Back Better Plan Act that recently passed the U.S. House of Representatives also places additional pressure on non-expansion states by extending ARPA incentives and by permanently reducing Disproportionate Share Hospital (DSH) payments to hospitals serving a large population of Medicaid and uninsured patients.
Although Governor Cooper pushed Medicaid expansion as a top priority throughout his budget negotiations with Republican leaders in 2021, expansion was not included in the final version of the budget. Senate Republicans were willing to include Medicaid expansion as part of the broader compromise budget, but House Republicans opposed adding the provision to the bill. Despite hesitancy from House Republicans this year, there’s increasing optimism that Medicaid expansion could be addressed during the legislative short session as evidenced by the creation of an 18-member joint legislative study committee to consider various ways in which access to health care and health insurance can be improved for North Carolinians. The committee will begin meeting in February and will make recommendations for legislation that can be considered during the short session that will begin in late April or early May.
Behavioral Health
In June 2021, the North Carolina Healthcare Association, North Carolina Chamber, North Carolina Medical Society and a coalition of other statewide organizations wrote a letter to legislative leaders and Governor Cooper stating that the current behavioral health crisis has reached a state of emergency in North Carolina. The letter called on lawmakers to act by using the recent influx of federal resources to address the behavioral health inequities that were exacerbated by the pandemic, and encouraged legislators and the Governor to work together with public and private partners to create a sustainable system of care. In response, the Governor’s Office urged the coalition to redouble their efforts to pass Medicaid expansion to combat this issue.
Although House and Senate leadership never issued a formal response, the House did include some behavioral health provisions in their budget. One major behavioral health provision that was included in the final budget requires NCDHHS to develop a clinical coverage policy for Medicaid coverage of behavioral health services provided to beneficiaries in a hospital setting after 30 hours if the beneficiaries are awaiting discharge for a more appropriate care setting. This was a top priority for Duke and other hospitals during the 2021 session given that current law only covers the first 30 hours. Moving forward, hospitals and behavioral health providers will continue to advocate for increased behavioral health funding to provide a more comprehensive solution for treating these patients.
Certificate of Need
North Carolina’s Certificate of Need (CON) law allows for the coordinated planning of new services as current provider volumes reach capacity, and permits planning of construction projects to specifically meet the needs of communities across our state. The North Carolina Senate has been particularly interested in reforming the state’s CON laws for years, arguing that CON leads to higher costs and decreased access to care. A handful of bills were filed in 2021 to reform or repeal the state’s CON law, but only one bill was signed into law by Governor Cooper. Duke and other health systems have typically been opposed to any changes to CON and support the existing law as a way to regulate the growth of health services and facilities, control costs, and manage distribution. However, Duke State Relations worked with the NC Healthcare Association and legislators this session to negotiate parts of the bill that became law.
The new CON law increases the price threshold for when new equipment or facilities would require a CON and indexes price increases to inflation each year. The law also ensures that providers use a CON within a certain amount of time after receiving it, known as a “shot-clock” provision. Projects costing more than $50 million would have to begin within four years, and projects costing $50 million or less would have to start within two years. At the request of hospitals, a provision was added to clarify that a timeline for a project can be extended if there are extenuating circumstances that delay the initiation of a project.
In addition to the stand alone bills this session, two CON provision were included in the budget bill signed by the Governor. The first was modification of the current Certificate of Need Exemption for Legacy Medical Care Facilities so that a person seeking to operate a legacy medical facility in a tier one or tier two county may request an additional 36-month extension of time to open the facility provided that there is a contract for the acquisition or reopening of a legacy medical facility. The other change temporarily removes Certificate of Need requirements for acute care hospitals in counties that have a total population between 40,000 and 50,000, is under 460 square miles, contains a portion of a city that is located in more than one county and is located along the state’s border with another state.
Higher Education
The 2021-2023 state budget included several provisions for North Carolina’s private colleges and universities. In addition to increasing the NC Need-Based Scholarship for students attending private postsecondary institutions, the legislature allocated funds to NC’s private colleges and universities to offset expenditures incurred to directly respond to the COVID-19 pandemic. A provision was added that excludes colleges from receiving the federal pandemic relief funding if less than 10 percent of the degree-seeking undergraduate student population receives the NC Need-Based Scholarship, preventing Duke University (and others) from receiving funds. The budget also allocated over $7 million to the National College Advising Corps to support a temporary expansion of the placement of college advisers in public schools through CAC’s program.
Interstate Medical Licensure Compact
The COVID-19 pandemic exacerbated healthcare worker shortages across the state and increased the need for more flexibility for licensed health professionals in other states to quickly and easily obtain a license to practice in North Carolina. The Senate introduced a bill in 2021 to establish the Interstate Medical Licensure Compact (IMLC) in North Carolina, which would increase access to health care by developing a comprehensive, streamlined process to allow physicians to become licensed in multiple states participating in the Compact. The process complements the existing licensing and regulatory authority of state medical boards to encourage medical license portability. Entering into the IMLC would also help increase access to telehealth services by allowing more out-of-state physicians to offer care in underserved areas, especially in rural areas where there are healthcare worker shortages.
29 other states and the District of Columbia currently participate in the IMLC. The General Assembly has already enacted several laws approving participation in other interstate compacts for healthcare professionals, including nursing, audiology and psychology. Joining the IMLC remains a top legislative priority for DUHS in order to increase access to care in North Carolina by giving patients more options to receive health care services. Although the bill never gained traction in 2021, it’s likely to be addressed again in 2022.
Medicaid Transformation / Safety Net Payments
The state’s transition from a fee-for-service to a managed care system of Medicaid went live in North Carolina on July 1, 2021. The NC Department of Health and Human Services was originally scheduled to move forward with Medicaid transformation on February 1, 2020; however, new funding and program authority were required from the General Assembly to meet this timeline and Governor Cooper and legislators were unable to reach a compromise agreement. Medicaid transformation was suspended indefinitely in November 2019, but the House and Senate reached a final agreement during the 2020 session that directed Medicaid transformation to begin on July 1, 2021 for Standard Plans and July 1, 2022 for Behavioral Health I/DD Tailored Plans.
NCDHHS recently announced a delay of the Behavioral Health I/DD Tailored Plans to December 1, 2022. With Medicaid transformation going live on July 1, a top priority for hospitals during the 2021 session was updating the hospital assessment to support continued funding for Medicaid payments to hospitals under the new managed care system. The bill passed the House and Senate with bipartisan support and Governor Cooper signed it into law in June.
Need-based Aid
The 2021-2023 state budget included a provision to increase the NC Need-Based Scholarship for students attending private postsecondary institutions by $2.2 million each year of the biennium. Through the North Carolina Independent Colleges and Universities (NCICU), a number of Duke students who are recipients of the NC Need-Based Scholarship wrote letters to their local legislators in 2021 thanking them for supporting need-based scholarships for students at private institutions and encouraging them to increase the annual scholarship allocation.
Research Funding
The Duke Human Vaccine Institute received a historic $17 million appropriation from the North Carolina General Assembly in 2020 for the research and development on COVID-19 vaccines, therapeutics and testing. The legislature did not directly allocate any other pandemic-related research funding to Duke in 2021. The budget did include a provision directing the NC Policy Collaboratory to identify faculty expertise, technology, and instrumentation located within institutions of higher education in the state, including Duke University, for the study of PFAS chemicals.
State Health Plan
A new price transparency bill for the State Health Plan was introduced in the 2021 long session with support from State Treasurer Dale Folwell. The legislation would allow the State Health Plan to access and utilize Claim Payment Data from the third-party administrator of the plan, Blue Cross Blue Shield of North Carolina. Currently, Blue Cross Blue Shield is not required to disclose Claim Payment Data that reflects negotiated rates with providers. In response, Blue Cross Blue Shield released a statement saying the insurance company supports transparency, and that the State Health Plan already receives transparent information on the billed amount, allowed amount and paid amount for each claim.
Treasurer Folwell has been at odds with hospitals and health systems for years to implement his “Clear Pricing Project” for the State Health Plan, which would base reimbursement rates for providers on Medicare rates. Many providers have refused to use the model because it would result in significant reimbursement cuts, so the State Health Plan continues to offer coverage through Blue Cross provider contracts. Although the price transparency bill passed the House nearly unanimously, the Senate never considered the bill in 2021.
Telehealth
Ensuring that providers are incentivized to maintain telehealth services as a means to increase access to care continues to be a top priority for DUHS at the legislature. The House passed a bill with bipartisan support in the 2021 long session that would increase access to telehealth in North Carolina by requiring private insurance companies to reimburse providers for these services. North Carolina is one of the few states that does not currently require insurers to cover and reimburse for telehealth services consistently. Despite overwhelming support in the House, the bill was never considered in the Senate due to strong pushback from insurance companies and advocacy groups that oppose the legislation by characterizing it as an “insurance mandate”. The House included the telehealth bill in their version of the budget, but it was not included in the final compromise budget. the telehealth bill will be eligible for consideration in the 2022 short session.