New rules meant to help North Carolina catch more Medicaid fraud are advancing in the state Senate, as state lawmakers seek to address concerns about rising healthcare costs and the potential for shrinking state revenues.
A newly rewritten version of House Bill 34 passed through the Senate Health Committee on Wednesday with limited debate, following a more substantive debate over the bill last week. In general, it would incorporate a number of policies that the state Department of Health and Human Services has said will help prevent or detect fraud in the Medicaid system.
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It would also crack down further on certain types of autism therapies, which Republican lawmakers say are riddled with fraud — and which have caused an explosion in state spending in recent years.
“We're mindful of our tax dollars being spent on Medicaid, as that environment becomes more challenging,” Sen. Benton Sawrey, R-Johnston, said Wednesday.
Lawmakers hope finding and stopping fraud could save the state tens of millions of dollars a year, if not more. That’s a promising idea, particularly as inflation, tax cuts and a growing population have put increased pressure on state budget writers.
Income tax cuts pressed for by Republican legislative leaders are expected to soon lead the state into a deficit, according to the legislature’s fiscal analysts, although some political leaders have said they don’t believe that analysis.
But whether the state runs a surplus or a deficit doesn’t only depend on the revenue coming in. The other side of the equation is the spending going out. And one of the state’s biggest sources of spending is on Medicaid, the healthcare program for low-income or disabled people that insures more than 3 million North Carolinians.
The majority of Medicaid funding comes from the federal government, but the state’s portion still costs billions of dollars every year. In part that’s because of the growing number of people on Medicaid. And in part it’s because of costs of goods and services going up in general.
New work requirements ordered by the federal government could soon kick tens of thousands of people off Medicaid in North Carolina, shrinking the rolls somewhat. But that could also devastate rural hospitals, WRAL has reported, since rural residents are significantly more reliant on Medicaid than urban residents. A different way to reduce spending on Medicaid, with less wide-ranging economic impacts, could be to cut down on fraud.
In recent months Attorney General Jeff Jackson and DHHS Secretary Dev Sangvai have been ordered to testify at the legislature on their offices’ efforts to prevent Medicaid fraud, or catch it, then prosecute it and recoup the lost money.
They defended their track record but also asked the legislature for certain changes to state law — new policies, or more spending on staff — to help beef up their efforts and catch even more fraud. Jackson, for instance, pointed to a new strategy he’s using, to have artificial intelligence tools analyze billing codes medical providers are charging to the state to identify signs of potential fraud. He asked lawmakers for increased spending on that program.
It remains unclear if that request might show up in the new state budget, which Republican legislative leaders plan to make public sometime this month. A spokesperson for Jackson said his office wasn’t consulted on the bill moving forward this week and has no stance on its provisions.
House Bill 34 doesn’t include any new spending on efforts or staffing to catch Medicaid fraud, although it does contain a number of policy changes that would affect healthcare providers and the type of information they’re required to send to state regulators for oversight purposes. Sawrey, who serves as co-chair of the Senate health committee, said the bill was written with input from DHHS officials in Democratic Gov. Josh Stein’s administration.
The bill has faced no opposition from lawmakers or the general public in multiple committee meetings so far. On Tuesday the health committee passed an amendment tweaking some of the more technical pieces of the bill, which Sawrey said had been requested by the healthcare industry.
“DHHS had some good conversations with some folks in the provider community about some concerns, and some tweaks that could be made to the language,” he said. “This amendment recognizes some of those changes.”
Having now passed through committee, the bill could go up for a vote in the state Senate this week or next, although no vote has yet been scheduled.