By Rose Hoban

A consortium of 11 hospital systems has announced collaboration intended to figure out how to respond to the new state Medicaid reform plan.

The hospital systems [see box] announced Thursday they were forming Provider-Led and Patient-Centered Care, a limited liability corporation, to explore how the hospital systems could become a statewide managed care organization to serve Medicaid recipients.

The Medicaid reform bill, passed in the state legislature in late September and signed into law by Gov. Pat McCrory in October, calls for the state to contract with three managed care organizations that will operate statewide. The general expectation has been that those organizations would be for-profit insurers from out of state.

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Hospitals participating in the Provider-Led and Patient-Centered Care corporation

        –  Cape Fear Valley Health System
–  Carolinas HealthCare System
–  Cone Health
–  Duke University Health System
–  Mission Health
–  New Hanover Regional Medical Center
–  Novant Health
–  University of North Carolina Health Care System
–  Vidant Health
–  Wake Forest Baptist Medical Center
–  WakeMed Health & Hospital

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These managed care companies will assume the financial risk for treating Medicaid beneficiaries, while the state pays more than a set sum only if more people become eligible for the program. Some beneficiaries, such as people who are dually eligible for both Medicaid and Medicare and those who have their mental health services paid for by Medicaid, will not initially be part of the managed care enterprise.

The transition will most likely take place around the beginning of 2020.

“We’ll be licensed as a managed care company and will have to meet all the same solvency requirements that the others have to meet,” said Kelly Vogel, a health care consultant who’s been hired to help plan the effort.

But, according to Vogel, the hospitals in the consortium will be looking for a “partner” managed care company that “has a similar genetic makeup to the health systems.”

[pullquote_right]Did you know NC Health News is a non-profit? Last year, a third of our funding came from readers. Please consider a donation today![/pullquote_right]She said one of the key features they’ll be looking for in a managed care organization to partner with is leadership made up of health care providers, not an insurance company. They are also looking to eventually be a not-for-profit insurer.

Vogel pointed to large organizations such as Pennsylvania’s Geisinger Health Plan or Utah-based Intermountain Healthcare as models for what the hospitals are looking for in a partner. Both organizations are run by groups of doctors and are considered to be among the best-managed health systems in the country.

“The organization will be a joint venture between the 11 health systems and the provider-led managed care company,” Vogel said.

Under the current system, the state pays hospitals, doctors and clinics for services rendered on a fee-for-service basis. But under Medicaid managed care, providers get paid a set per-member, per-month fee for each Medicaid patient and are tasked to keep that person healthy while meeting certain quality goals.

The goal of the management entity is to control how much health care patients consume. It’s hoped that the way to do that is by helping patients to get healthier, with less need to spend money.

The state pays more only if the number of Medicaid enrollees increases.

“These [hospitals] are coming together to work together to better serve the Medicaid population,” Vogel said. “Integration and care coordination is what these guys wanted to have at the center of this.”

She said each hospital would remain an independent system but would work together to create a way to track patients as they move around the state.

Vogel said a group of leaders from the different hospitals came together as the legislature was debating this year’s Medicaid bill to discuss the idea for this consortium.

“They had been having conversations during that time about how North Carolina could move forward,” Vogel said.

But she said there are still a lot of details to work out.

Currently, Vogel is the only employee.

“The key for them was that providers needed to be at the front of this effort, which is what they advocated, and that we need to have a patient-centered approach,” she said. “It’s a unique population with unique needs.”

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