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As the state prepares to reform Medicaid, providers are scrambling to find ways to survive and even thrive.

By Rose Hoban

In a move designed to safeguard their survival, the state’s community health centers have agreed to a partnership with one of the nation’s largest for-profit managed care companies to provide and coordinate care to Medicaid patients under the state’s reform plan.

A press release Tuesday from the North Carolina Medical Society, another plan partner, described how the joint venture will “establish, organize and operate a physician-led health plan to provide Medicaid managed services.”

The initiative, called Carolina Complete Health, will be owned jointly by the Medical Society, health care providers and the clinics. The arrangement also means physicians and clinic leaders will make medical policies and have a majority of the seats on the organization’s board of directors.

The managed care company Centene will manage financial operations. Centene, a Fortune 500 company,  mostly does work for government agencies around the U.S. organizing and managing care for Medicaid patients. The company’s stock reached it’s highest point of the past month Tuesday at 62.12 per share at the close of trading.

There are about three dozen community health center organizations around the state, serving patients at more than 200 clinics. According to the North Carolina Community Health Center Association, the centers saw about 480,000 patients in 2015, many of them low-income patients, some covered by Medicaid.

In many of the clinics, though, significant numbers of patients lack health insurance and pay for services on a sliding scale or not at all. The clinics get federal grants and some state dollars, but to keep their doors open, they need the revenue from Medicaid.

“The way the Medicaid program is going, this is what we want to do,” said Ben Money, head of the community health center association.

“When the General Assembly wrote and passed that law, we realized our world had changed.”

Medicaid reform changes plans

In 2015, the state legislature passed a bill requiring the state’s Medicaid program move from being one that paid for care on a fee-for-service basis, to a managed care model, run by large, national for-profits and locally managed companies. Under managed care, doctors, clinics and hospitals will get a set amount per patient per month to provide all the care for all the Medicaid patients who pick their practices.

Ben Money, head of the NC Community Health Center Association. Photo courtesy NCACHC

The third partner in the initiative, Centene, is one of the country’s largest Medicaid managed care companies. If the company wants to bid for a contract to provide care, it will need to have provider networks stretching across the entire state.

“There are similar arrangements in other states where there’s Medicaid managed care,” said Money. “We found in other states, the community health centers who… partnered with managed care companies in a smart way, it benefited their patients.”

Currently, Medicaid has about 1.9 million patients and costs more than $13 billion in state and federal dollars annually. Under the plan, the state will be carved up into six regions, each with at least three statewide Medicaid managed care plans managing the program, while smaller “provider-led entities” can bid to provide care regionally.

Winning a statewide contract could net a company like Centene more than $100 million dollars in profit annually.

“One of the things we all realized was that unless we developed stronger partnerships and relationships, we were not going to have the kind of program that’s going to work for North Carolina,” Money said. “We needed to be at the table, or we would be on the table.”

Vulnerable, powerful

Money said there were some advantages for community health centers in the partnership. For one thing, he said a closer relationship with the Medical Society means better access to specialists.

“It’s important that we create a continuum of care,” he said.

He also said in other states, such as Missouri, community health centers have partnered with managed care companies and done well.

“The ones who did it in a smart way, it benefited their patients,” Money said. “We’re not doing this with our eyes closed.”

Kim Schwartz, who runs the Roanoke Chowan Community Health Center in Ahoskie in rural Hertford County, credited Money with having the vision to bring the strengths of the community health centers to the negotiations with managed care companies.

“I’ve been around for many waves of managed care, and I even worked for a managed care company,” she said. “I understand that if we’re at the table and having the conversations and setting the course of how care is managed, we’re not subject to someone external coming in and telling us what to do.”

Schwartz said the community health centers also bring depth and value to the managed care companies in how well they know their patients.

She also pointed to the data health centers are required to collect as a valuable bargaining chip for well-heeled managed care companies. The centers have information that Centene, to create a bid, will need to accurately predict patient needs and costs.

“It’s much easier when you know what data your partners are collecting, as opposed to working with a group of independent practices that are not a collective,” she said.

The clinics also provide services the companies will need to have to meet the requirements of state contracts.

“We’ve been doing this a long time, we know what we’re doing,” Schwartz said.

Rose Hoban

Rose Hoban is the founder and editor of NC Health News, as well as being the state government reporter. Hoban has been a registered nurse since 1992, but transitioned to journalism after earning degrees...