shows NC with the 100 counties divided by region into six regions for Medicaid bidders
Under the new Medicaid plan, commercial managed care companies will bid to cover patients statewide, while local "provider-led entities" will bid on covering all the patients in one of six regions. Map courtesy: NC DHHS

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By Sarah Ovaska-Few

A total of eight companies and provider-led groups are vying to manage the care of North Carolina’s Medicaid patients, contracts that could pay out as much as $30 billion over the next five years.

The N.C. Department of Health and Human Services released a list of applicants this past week that included six managed care companies and two provider-led groups that submitted proposals detailing how they will manage the health care needs of Medicaid patients as North Carolina shifts to managed systems.

Medicaid is the federally mandated but state-run program that provides health care for 2.1 million low-income disabled persons, seniors and children in North Carolina. The $14 billion program is funded largely with federal dollars, but the state contributes roughly $1 for every $2 of federal funding.

The state agency made the names of those interested in managing Medicaid programs public this weekend, and state officials say they plan on awarding contracts in February.

Some patients will begin switching over to the managed-care plans as early as November 2019, with the rest to follow.

The eight interested groups are:
  •     Aetna
  •     AmeriHealth Caritas North Carolina
  •     BSBSNC-Healthy Blue
  •     Carolina Complete Health (provider-led group under the N.C. Medical Society)
  •     My Health by Health Providers (provider-led network of 12 N.C. hospital systems)
  •     Optima Health
  •     UnitedHealth Care
  •     WellCare Health Plans

DHHS is looking to award up to four statewide contracts for groups to manage the care of most of the state’s Medicaid population, as part of a planned move away from its existing system where the state essentially cuts checks to providers for each doctor visit, operation and prescription.

How it will work

North Carolina’s Medicaid system, which currently operates on a fee-per-service model and is managed by the state, was rejected by the Republican-led state legislature in 2015 in favor of a managed care model.

Lawmakers cited Medicaid’s difficult-to-predict costs as reason to contract out the system, in hopes that a managed care program with private insurers or provider-led groups could bring more budget stability.

Medicaid patients will have choices of which network to sign up with, and then the state will pay those companies a per-person rate to manage each person’s physical and behavioral health needs.

Three-quarters of the state’s 2.1 million Medicaid patients, including large numbers of children and pregnant women, will see their care switched to this new system. The state will maintain control for now over the care of its most medically complex patients, such as those in long-term care settings or with significant developmental or other disabilities, a total of about a half-million people.

The consideration of applications also comes even as the state has yet to receive official approval from federal regulators for its plan to overhaul Medicaid.

Few, if any, regional applicants

Interest from provider-led networks is far below what was initially anticipated, given that the state had devised a system where up to eight provider-led groups could also compete to manage Medicaid patients in six separate regions.

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Requests for comment and clarification from the N.C. Department of Health and Human Services about the regional contracts were not granted Monday with an agency spokeswoman citing a policy to stay silent about the process until the contracts are awarded.

Only two provider-led groups — My Health by Health Providers, a network of 12 major and regional hospital systems, and N.C. Medical Society-affiliated Carolina Complete Health — submitted applications. Both of those groups have indicated they will have coverage across the state and are positioned to offer managed care statewide.

The newly formed My Health by Health Providers is hoping to be awarded a statewide contract, said Lisa Farrell, the CEO of the group, which boasts it will have more than 15,000 physicians in its network. The group is also partnered with the nonprofit Presbyterian Healthcare system, a longtime managed-care provider in New Mexico’s Medicaid system.

The 12-hospital network doesn’t plan on offering health plans to others at this point, given that if it is selected as a statewide provider, it will need to quickly ramp up.

“It’s a health plan that was really for managed Medicaid at this point,” Farrell said. “You go from having no members to having many.”

Meanwhile, Carolina Complete Health is a partnership between managed care company Centene Corporation, the N.C. Community Health Center Association and the N.C. Medical Society, a professional group.

The proposals in front of DHHS aren’t about finding the lowest bidder, N.C.DHHS Secretary Mandy Cohen has said.

“Potential plans are not going to be offering their own price in this process,” Cohen said in a call with reporters back in August. “They’re going to accept a rate set by the department.”

Whoever is awarded the contract, the key for North Carolina will be having enough oversight and scrutiny of the managed-care contracts to ensure people are getting the care they are entitled to while the state gets the value it needs, said Pam Silberman, a health policy and management professor at the University of North Carolina at Chapel Hill.

“The question is whether the state is going to be staffed to have the resources needed to effectively oversee the contracts,” Silberman said.

Other states have struggled mightily with this, as was pointed out in an NPR report this week that found little oversight of private insurers despite billions being paid out through the Medicaid program.

“We haven’t been holding plans to the level of scrutiny they need,” Andrew Bindman, former director of the federal Agency for Healthcare Research and Quality, told NPR.

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Sarah Ovaska

Sarah Ovaska is a freelance writer based in Orange County, who has called North Carolina home for well over a decade. She’s reported on criminal justice, education, health and government issues at publications...

5 replies on “Medicaid Managed Care: Who’s In the Running For Contracts With the State”

  1. . . . Lots of commercial interest already! Yet in a state where outcomes from dollars expended are not seriously valued, we can anticipate constant reformation of public health and mental health care because low-quality systems are not sustainable!

  2. I know people in the Presbyterian system in New Mexico Hotel me it’s already been awarded to them.

  3. Another critical health care decision that will almost certainly negatively impact access, availability, and value of services to the most vulnerable residents of the state if the current General Assembly uses the same decision-making matrix they’ve used previously. Anyone who cares about the health and wellbeing of these members should closely monitor their outcomes once the decision is made, and hopefully, NCHN will continue its excellent surveillance of these precious covered-lives in the balance in the aftermath.

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