2004 Legislative Summary

The 2004 General Assembly adjourned around 6:00 a.m. Sunday morning, July 18^th, after a marathon session that included passage of a final state budget.  This Legislative Summary provides an overview of the 2004 General Assembly’s actions on issues of importance to NCSA members.

MEDICAID

The budget originally proposed in May by Governor Easley contained a $10 million cut in Medicaid funding for physician services.  This proposed cut would have resulted in a reduction in Medicaid physician reimbursements from 95% to 92% of the Medicare Fee Schedule.   After intense lobbying from the medical community, the final budget adopted by the General Assembly maintains the existing reimbursement structure (i.e., 95% of Medicare.)

The North Carolina Blue Ribbon Commission on Medicaid Reform will continue meeting this Fall and plans to provide recommendations on potential Medicaid reforms to the 2005 General Assembly.  We will keep you updated on the progress of the Commission’s efforts.

STATE EMPLOYEES HEALTH PLAN

The Executive Administrator of the North Carolina State Employees Health Plan (Dr. Jack Walker) made a presentation to key leaders of the General Assembly in June describing a projected multi-million dollar revenue shortfall for the State Plan beginning in 2005 and extending throughout the next decade.  This presentation was designed to inform legislators of the need for significant reforms of the existing system.  Reforms currently under consideration include restructuring the State Plan’s reimbursement methodology away from the existing UCR-based system in favor of utilizing a more modern fee schedule. 

Some legislative leaders are considering the feasibility of consolidating the State Health Plan and Medicaid.  The General Assembly asked the Joint Legislative Healthcare Oversight Committee to conduct a study of the feasibility of consolidating state health care services and report its findings to the 2005 General Assembly.  Specifically, this study will determine whether a single state entity should be established to purchase healthcare services provided with State funds and to administer data consolidation and claims processing systems in order to enhance quality of care and cost-containment.  The potential consolidation of the State Employees Health Plan with Medicaid may have significant negative implications for anesthesiologists and other health care providers.  The meetings of this oversight committee will be followed closely by NCSA this Fall.

SCOPE OF PRACTICE

The 2004 “Short Session” of the General Assembly was reserved primarily for budgetary matters and therefore no contentious scope of practice issues were addressed.  The General Assembly did, however, request a study of the practice of naturopathy to determine whether it would be in the public interest for practitioners to be licensed or otherwise regulated.

MEDICAL LIABILITY REFORM

Despite months of debate by the House Blue Ribbon Task Force on Medical Malpractice Reform, the House of Representatives did not address medical liability reform legislation during this year’s Short Session.  This means that the General Assembly did not pass either the reforms supported by the medical community or the potentially problematic legislation passed by the Senate in 2003. 

The North Carolina Medical Board sought, with the support of the North Carolina Medical Society, NCSA, and other physician specialty societies, an increase in physician licensing fees in order to provide additional staff resources to enhance the Board’s enforcement and disciplinary activities.  The need for enhanced Medical Board enforcement actions was often cited by the trial lawyers in their efforts to oppose medical liability reform. Unfortunately, after receiving broad support in the Senate and unanimous approval by the House Health Committee, this legislation was not considered by the full House of Representatives.  The NCSA will continue to support the Medical Board’s efforts to enhance its enforcement and disciplinary activities.

While not addressing broad liability reforms, the House and Senate did adopt legislation to expand the scope of peer review confidentiality protections to include the activities of quality assurance committees.  This legislation also includes a provision prohibiting plaintiffs from using a physician’s “apology” regarding an adverse outcome as evidence in a trial.

INSURANCE ISSUES

While no major health insurance legislation was passed this year, a new legislative study commission was created that may result in future legislation that is of interest to NCSA members.  The General Assembly established the North Carolina Health Insurance Innovations Commission to address the availability and affordability of health insurance coverage for small business owners and employees.  This study will consider issues including the cost of existing health insurance mandates and potential reforms that could reduce such costs.  NCSA will follow closely the work of this commission.

HEALTHCARE WORK FORCE DEVELOPMENT

The General Assembly created a new commission to study Healthcare Work Force Development Issues.  Among other things, this study commission will address the State’s shortages in physicians, nurses and other allied healthcare providers.  This is obviously an important issue given the significant shortage of anesthesia providers in North Carolina.

HEALTH CARE FACILITIES CONSTRUCTION

The General Assembly agreed to issue participation bonds to fund $468 million in health care-related construction at member schools of the UNC system. The plan includes money for a cancer research center at UNC-Chapel Hill, a cardiovascular disease center at East Carolina University, a health center at UNC-Asheville, a bio-informatics center at UNC-Charlotte and a pharmacy school at Elizabeth City State University.