I don’t know what it was about a recent newsletter (or post on my website), entitled “So Much To Do and Too Little Time,” but lots of people stopped me both in Hendersonville and Raleigh about it. One patron at the Underground Baking Company asked me if I was “Chuck McGrady.” When I told him I was, he said he really liked my newsletter and just wanted me to pass along his thanks to my staff or whoever wrote it.
Well, that would be me. The newsletter goes out most every week while the legislature is in session, and my primary audience is my constituents living four hours away from Raleigh.
While I write for my constituents back in Henderson County, it seems that as I rise through the ranks in Raleigh, some range of people here have taken to regularly reading this communication, and I’m frequently told by lobbyists that they get many legislative newsletters, but mine is unique because it doesn’t read like anyone else’s. While it is gratifying to hear that, it also gives me pause.
As a new Appropriations Chair, a former Speaker advised me to stop tweeting. One of my colleagues said that I should stop writing my newsletter. Well, I listened to that advice but ignored it. My constituents are pretty smart for the most part and many really want to stay abreast of what is going on in Raleigh but have a hard time doing so. I figure part of my job is to communicate what is going on — sometimes focusing on things that don’t make it into the news.
With that said, I have to note that I know I’ve got to balance my desire to explain what is going on with my responsibilities here. Another colleague caught me about an hour after that same newsletter went out and asked if I thought “I was giving too much away?” The question was a good one. I’m one of the legislators negotiating the budget on behalf of the House, and he wondered whether I was saying too much about what was important. Clearly, I shouldn’t say anything that weakens the House’s posture as we negotiate.
While I explained I’d just said whatever most everyone already knew and what had been reported in the news, even quoting Sen. Tom Apodaca as to what the Senate’s priority was, he had a good point. Before continuing discussion of health care issues in the budget here, readers should know that I’ll have to leave some things unsaid in future newsletters about Medicaid reform. For example, I can’t completely explain my thoughts or our strategy publicly while negotiating that topic with the other chamber’s leaders.
So now you’ve been warned. It has happened because I’ve got a newsletter that is being read by the wrong people: lobbyists, my colleagues, legislative staff and the media.
Health Care Issues
There are five health care-related issues caught up in the budget of particular interest to my Henderson County district. Four of them have statewide implications, and one is unique to western North Carolina. The issues in no particular order are: (1) Tax Reform Proposals, (2) Certificate of Need (CON), (3) Certificate of Public Advantage (COPA), (4) Medicaid Expansion, and (5) Medicaid Reform.
The only issue that is somewhat reflected in the House budget is the Medicaid Reform issue. However, the House budget simply incorporates the costs of House Bill 372 [2015 Medicaid Modernization], the bill passed by the House reflecting its Medicaid Reform proposed policy. That bill passed the House on a vote of 105-6, obviously with broad bipartisan support, but its fate in the Senate was immediately evident when it was assigned to the Senate Ways & Means Committee, an inside joke in the General Assembly.
The Senate Ways & Means Committee is where bills go to die in a very public fashion. While many bills die without making it through the process, when Senate leadership wants to publicly kill a bill it gets assigned to Ways & Means, a committee that has never in memory met or reported out a bill. Sen. Apodaca chairs the three-person committee.
Conversely, the Senate has put lots of policy in the budget, not just Medicaid Reform. Aside from education policy and economic development policy, in the health care area the budget contains tax reform proposals that affect hospitals and provisions to abolish CON and COPA. COPA is the one health care issue that really only affects western North Carolina.
The Certificate of Public Advantage law is repealed on page 171 in the Senate’s budget, and the budget provision simply incorporates the same provision that is in Senate Bll 702 [Repeal CON and COPA Laws]. Sen. Apodaca introduced that bill, but it was never heard in any committee before it appeared in the budget.
COPA arose out of the merger of Mission Hospital with St. Joseph’s Hospital in 1995. The two hospitals sat immediately across from each other on Biltmore Avenue in Asheville, and when they merged the new hospital basically had a monopoly in the Asheville area. Pursuant to the COPA law, Mission operates under an agreement with the State called a certificate of public advantage, and the law protects Mission from being subject to antitrust claims. Basically, Mission agrees to certain conditions and it then can’t be sued for anti-trust violations. This agreement limits Mission’s profit margin, caps the number of doctors it can employ and has other provisions intended to make sure that it doesn’t use its monopoly in the Asheville area against its neighbors.
Of course, a lot had changed since 1995, and there has been widespread consolidation within the health care industry. Mission, while disclaiming that COPA repeal is one of its legislative priorities, clearly would love to be rid of the burden imposed on the hospital. Dr. Ron Paulus, Mission President and CEO, was quoted in the Asheville Citizen-Times as saying “that repeal would result in ‘no material changes initially to Mission’s operations.’” but added that “over time, the added flexibility and financial benefits ‘would create important opportunities to adopt and respond to rapidly changing market conditions.’”
If Mission Health is the protagonist in the dispute over COPA, then Park Ridge Health is the antagonist. Over the past decade, Park Ridge Heath has consistently maintained that Mission is in violation of the agreement, but its claims weren’t supported by the North Carolina Department of Health and Human Services. While the COPA issue is not Park Ridge Health’s most important issue in the current legislative session, Park Ridge Health opposes the repeal of COPA.
It is easy to get in the weeds in talking about COPA, or for that matter any of these health care issues, everyone agrees that repeal of COPA as a practical matter only affects western North Carolina and appears to only be an issue closely followed by Mission Health and Park Ridge Heath executives and their lobbyists.
My View on COPA
While much has changed in the provision of health care with major consolidations within the industry, I don’t think now is the time to repeal COPA. Once we complete work on Medicaid Reform, it may be that the “choice” or “competition” that will be required under federal law between any provider-led entities (PLEs) or any managed care organizations (MCOs) in Asheville or western North Carolina may obviate any need for COPA.
My concern now is that I think an argument can be made that Mission Health is using its market strength to expand, and I understand why Park Ridge Health feels threatened. Mission is a nimble organization run by highly competent leaders, and as community hospitals have found the need to merge or sell their assets, Mission Health has been opportunistic. While being no antitrust lawyer, I hear consistently from a range of health care providers in Henderson County that they fear Mission Health could threaten them if it becomes the PLE in western North Carolina under some future Medicaid Reform law. Local public officials in other counties have also told me I should try to protect Henderson County’s competitive health care community against Mission Health.
Some might say that my position on this issue is simply me protecting my parochial Henderson County interests, since Park Ridge is in my district and Mission is not. That argument is a bit too simplistic, since Mission may not be in Henderson County but it is one of Henderson County’s biggest employers; lots of doctors, nurses, and health care professionals working at Mission live in my district.
While I currently oppose COPA repeal and generally oppose putting such policy in the budget, I could support eventual repeal of COPA. Things are changing very quickly in the health care industry. My suspicion is that change will accelerate when North Carolina finally enacts Medicaid Reform, whether the House’s or Senate’s proposal or some compromise. Mission Health may be right, and COPA is already outdated, but that should become clear after Medicaid is reformed.
On one thing I agree with both Mission and Park Ridge, COPA repeal is the least important of the health care issues that are in play or being discussed. I doubt the negotiations over the budget will get hung up over COPA repeal.