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Wednesday, October 5, 2022
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Hospitals offer compromise in attempt to reach Medicaid expansion deal

After months of finger-pointing and little movement, are we finally getting close to a compromise on Medicaid expansion? 

The sticking point all summer has been proposed changes to Certificate of Need regulations. Senate leader Phil Berger has said it’s an essential element of an expansion bill. He’s said he made compromise offers to the state’s hospitals, but they didn’t offer any concessions on the issue.

That appears to have changed Friday, when the N.C. Healthcare Association announced what it calls a “generous but financially risky” offer to make some tweaks reducing CON regulations.

Their proposal would repeal the CON application process for adding new psychiatric inpatient beds and chemical dependency beds as well as change the regulations for ambulatory surgical centers.

The hospitals say that would reduce their revenue by more than $700 million. They note that the hit would come alongside new hospital assessments costing $550 million per year (although that cost is expected to be offset by having less charity care because more hospital patients will have Medicaid coverage).

The surgical centers change has lots of strings attached: The repeal of CON for those facilities would only apply in larger counties, the facilities would have to contribute to a charity care fund, and the change wouldn’t take effect for five years, according to the terms outlined Friday.

“In an effort to get stalled negotiations moving, and in response to Senator Berger’s and Governor Cooper’s requirement that Medicaid expansion be coupled with Certificate of Need reform, our board of trustees has made the difficult decision to propose Certificate of Need law reforms,” association board chair and Hoke County hospital executive Roxie Wells said in a news release. “CON law changes could threaten the survival of community hospitals if they are not implemented carefully. We are putting a lot of trust in legislative leaders to do this correctly.”

Lauren Horsch, a spokeswoman for Senate leader Phil Berger, said his office received the proposal Friday afternoon. “We appreciate the NCHA’s willingness to come to the table with a proposal,” she said. “We are reviewing it and cannot comment on the substance of it at this time.”

If the concession leads to an agreement, the question is how soon will the legislature act?

The General Assembly is scheduled to return for a brief session at noon on Tuesday, but legislative leaders have already told their colleagues that no votes are expected – meaning most aren’t coming to Raleigh.

The next scheduled session after that will be on Oct. 18. And even if the Senate is ready to pass a bill, the political landscape in the House is less certain. The Medicaid expansion legislation that passed the House over the summer calls for the Department of Health and Human Services to develop a detailed plan and bring it back for a vote in December.

It’s unclear if they’d vote sooner, especially during the heat of election season.

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