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Jon Nelson

Rep. Jon Nelson, R-Rugby, chairs a division of the North Dakota House Appropriations Committee Tuesday. 

North Dakota House lawmakers declined to back major changes to the state's Medicaid expansion program Tuesday, marking a victory for health care providers who lobbied against the proposal.

A panel of House budget-writers rejected Gov. Doug Burgum's plan to have the Department of Human Services administer Medicaid expansion and cut provider reimbursement rates. In his budget address last year, the Republican governor said the changes would "free up" money and allow the state to "reinvest in access to behavioral health services.”

North Dakota is one of 36 states, along with the District of Columbia, to expand Medicaid eligibility to more low-income residents under the Affordable Care Act, according to the Kaiser Family Foundation.

The program currently covers about 20,000 North Dakotans and is mostly federally funded. Department of Human Services Executive Director Chris Jones said North Dakota's costs are more than two times the national average.

"I think this governor has been very clear about ... trying to reinvent government, create efficiency," Jones said. "And we need to look at all dollars that are spent as it relates to the provision of services."

The governor's proposal has drawn a major lobbying push this session. The North Dakota Hospital Association warned lawmakers that shifting the expansion's reimbursement rates to traditional Medicaid levels would cost health care providers $220 million in the 2019-21 biennium.

The state has contracted with Sanford Health Plan to administer the Medicaid expansion program since its inception in 2014. The organization's president, Kirk Zimmer, said in an emailed statement that they "can deliver lower costs and healthier outcomes that saves the state of North Dakota money."

"We're very pleased with keeping the Medicaid expansion with a third-party administrator and ... that the rates are going to remain the same," said Tim Blasl, president of the North Dakota Hospital Association.

A division of the House Appropriations Committee instead voted Tuesday to bring pharmacy programs in-house and to reimburse providers at consistent levels. But it declined to levy an "assessment" on major hospitals to help pay for Medicaid expansion.

"They are making profit on this population, I would guess, or they wouldn't be fighting so hard to keep it," said Rep. Jon Nelson, R-Rugby, the panel's chairman who supported Burgum's plan.

The budget for the Department of Human Services, the state's largest agency, is expected to end up in a House-Senate conference committee before the bill's final passage. The Senate already voted to stay the course on Medicaid expansion earlier this session.

“I think they were convinced over here that the system that’s in place right now is good and is workable,” said Sen. Ray Holmberg, R-Grand Forks, his chamber's chief budget-writer.

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