Medicaid expansion could face familiar challenges in a divided NC House and Senate

Medicaid expansion in North Carolina is still on tenterhooks this legislative session with a sticking point between the House and Senate likely to return.

Lawmakers in the state Senate filed a bill Tuesday that would repeal North Carolina’s Certificate of Need regulation, a law that requires health care providers to get approval by the state for new health care facilities, medical equipment purchases and more.

During the last legislative session, Medicaid expansion seemed to be on the brink of passage, but disagreements between the House and the Senate on what the bill should look like stalled negotiations.

In June, the Senate, in a near-unanimous vote, passed a bill to expand Medicaid with CON regulation changes. The House passed a separate bill, which authorized a study after which a second vote would be necessary to authorize expansion, as previously reported by The News & Observer.

In March, the House and Senate both filed CON repeal bills, which appeared to be identical. Neither passed.

“We’re willing to look at CON reform,” House Speaker Tim Moore, a Cleveland County Republican, said Wednesday, “not CON repeal... I don’t anticipate that we will take up their standalone bill.”

Moore said that conversations on CON would likely be part of a much larger conversation when the legislature puts together the next state budget. Asked whether CON would be tied to the debate around Medicaid expansion this year, Moore said he did not know “if those conversations will happen at the same time or not” and that the House last session took the position that putting cost controls in place was a good issue to deal with on its own.

“But historically, you tend to see these kinds of issues get put together,” Moore said. “So we’ll see... There’s been no predetermination.”

Senate leader Phil Berger, a Rockingham County Republican, could not be reached for comment, nor could most of the bill’s sponsors. Jim Burgin, a Harnett County Republican and another of the bill’s sponsors, was unable to talk Wednesday, according to a spokesperson.

Outside opposition to CON repeal

One of the strongest opponents to CON repeal in the 2021-22 legislative session was the North Carolina Healthcare Association, an interest group that represents hospitals.

Asked Wednesday about the group’s position on the Senate’s new CON bill and its position on Medicaid expansion, Cynthia Charles, spokesperson for the Healthcare Association, said in a statement that last session, the organization submitted a proposal in response to the Senate’s Medicaid expansion bill.

The letter was sent to Democratic Gov. Roy Cooper, Berger and Moore in September and proposed Certificate of Need concessions on ambulatory surgical centers and inpatient beds for patients with psychiatric problems and chemical dependency, as previously reported by The N&O.

In the letter, N.C. Healthcare Association board chair Roxie Wells said the “NCHA and our members have urged elected leaders to expand Medicaid to improve the health of our neighbors and communities for over a decade.”

“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,” Wells said. “CON law changes could threaten the survival of community hospitals if they are not implemented carefully.”

Charles said the association was still analyzing the latest CON bill and had not yet had an opportunity to discuss it with members or with the bill’s sponsors.

“Generally, we think that any changes to certificate of need law should consider the current and near future operating environment for hospitals and health systems,” she wrote to The N&O.

Throughout 2022, hospitals had been “facing significant inflationary pressures and skyrocketing labor costs,” Charles said, and many continue to report negative financial operating margins.

“North Carolina has serious issues we are trying to solve to help make sure that people in our state can have equitable access to high-quality health care and be as healthy and productive as possible,” she added. “Legislative leaders may want to be careful not to implement policy that could unintentionally harm access to healthcare services in local communities, especially safety-net services North Carolinians rely on. We look forward to continuing the conversation with them on these topics.”

North Carolina would be one of the last states to adopt Medicaid expansion under the Affordable Care Act. Medicaid provides health insurance coverage to certain low-income and needy individuals via state and federal funds.

In North Carolina, childless adults are not eligible for Medicaid, while the current income limit eligibility for a parent or caretaker is 41% of the federal poverty level. With expansion, eligibility would increase to all adults with incomes up to 138% of the federal poverty level.

According to an estimate by the state Department of Health and Human Services this expansion would make 600,000 low-income North Carolinians eligible for the program and increase access to health care across the state, particularly in rural communities.