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

The state’s health care landscape is slated to drastically change next year as the Medicaid system that serves the state’s most vulnerable residents shifting to managed care.

With the first patients expected to migrate over to the new system in November 2019, there are still plenty of unanswered questions about changing the $14 billion program – including which managed care companies will contract with the state and how much the state will pay them to handle the health care of each patients.

But other answers about the shift to managed care are starting to trickle out, as N.C. Department of Health and Human Services Secretary Mandy Cohen met with a key state legislative committee Monday to discuss the changes.

The state agency wants the new Medicaid system, which will include an ambitious pilot program to target traditionally non-medical issues such as housing and transportation that can affect health, to work well, she said.

“I want to make sure we’re buying health and not just buying health care,” Cohen told the Joint Legislative Oversight Committee on Medicaid and NC Health Choice.

North Carolina currently has 2.1 million people enrolled in Medicaid, meaning one out of every five North Carolinians depends on the $14 billion annual program funded with a mix of federal and state dollars.

Under the new system, the state will pay managed care companies a yet-to-be-determined rate per person instead of its current model, where the state oversaw the care of patients across the state and essentially cut checks for every flu shot, operation and emergency room visit for people on Medicaid’s rolls.

“We’re going to be moving from a system that pays retrospectively, you bill us and then we pay you back, moving to a prospective system, where we’re going to pay per month,” Cohen explained.

The state received official approval from federal authorities last month for most of its proposed changes. State health officials also heard earlier this fall from the eight managed care groups wanting to take bites out of the state’s annual $14 billion Medicaid apple. Six of the eight bidders are for-profit entities, while two are provider-led groups backed by doctors’ groups and a consortium of the state’s hospitals.

Rep. Nelson Dollar (R-Cary), who has expressed doubt about the plan to go to managed care, pointed out some of the flaws in the rollout of a similar managed care program in Florida.

Rep. Nelson Dollar (R-Cary) Image courtesy of the NC General Assembly website

“If you look at the Florida example after the first year, you had a number of the plans coming back to the General Assembly asking for hundreds of millions of dollars more, there were lots of disputes as to how those claims were being calculated,” he said.

Dollar then pointed to the example of California, which is having to claw back overpayments to that state’s Medicaid managed care providers.

“Trying to get the Goldilocks scenario and getting [rate setting] right is going to be incredibly difficult challenge for everyone; plans, the department, General Assembly,” he said.

Dates to remember

In February, the DHHS will announce which of the eight interested companies and provider-led groups will provide services, Cohen said.  Contracts could amount to as much as $30 billion over the next five years, the largest procurements in the state health department’s history.

Once that happens, an enrollment broker already hired by the state will start reaching out to the 1.6 million people within the state’s Medicaid population identified as part of the first wave to be switched. Contact, via mail and other methods, will begin this summer to inform people about upcoming changes, what choices they have in the different managed care plans and how to determine the best fit.

Those who don’t select a provider will be auto-enrolled with a managed care company that has the patients’ doctors on their networks. Anyone unhappy with their choice can make a change within the first 90 days of being on their plan, DHHS officials said at Monday’s meeting.

Maintained under state management will be a half-million of the most medically complex patients, including those with significant behavioral and mental health needs, with disabilities or residing in long-term care homes. That group will move to plans “tailored” to fit them by 2020.

Included in the switch will be a chance to look at alternative ways to improve health, through Healthy Opportunities Pilots that will address Medicaid patients’ needs for housing, food, transportation, employment and interpersonal safety.

North Carolina is the first state to get approval for initiatives such as these, said Dave Richard, DHHS’ deputy secretary for Medicaid.

“This is groundbreaking,” Richard said.

Providers facing changes

The selected managed care groups will begin working with hospitals and doctor offices around the state in early 2019 to figure out their own cost structure, to prepare for when patients start rolling over to the new system in November.

Cohen said it will not be an easy switch, with doctor offices going from billing one entity – the state – for all Medicaid bills to dealing with several managed care companies that will be paying hospital or primary care doctors an overall “per member per month” fee to manage individual patients’ health needs.

Doctors and hospitals will need to start signing contracts and negotiating these prices soon after the managed care contracts are announced in February if they plan on serving Medicaid patients, Cohen said.

“This is really the time when these folks need to dig into those details,” she said.

DHHS hopes to add an ombudsman-like position to the department, to help field concerns from providers and push for solutions to issues that pop up, Cohen said.

Sen. Tommy Tucker (R-Waxhaw)

Monday’s legislative meeting also included passing references to the possibility of Medicaid expansion to uninsured adults, which the Republican-led legislature has been opposed to up to this point but has been a top priority of Gov. Roy Cooper and his Democratic administration.

State Sen. Tommy Tucker, a Union County Republican leaving office at the end of the year, advised DHHS officials to scrutinize the existing system for fraud, in light of the fact the state could bring an estimated 339,000 uninsured adults into the Medicaid system.

“I hear the Medicaid expansion train coming down the track, I hear it loud and clear with the last election,” he said. Voters in three typically conservative states – Idaho, Utah and Nebraska – voted during the mid-terms to bring Medicaid expansion to their states.

“You expect to add 600,000 more people on the Medicaid rolls?” he said. “Your system can’t handle, you can’t handle it. And that’s just the way I feel about it.”

Even though other traditionally conservative states have moved to expand the program, the legislative appetite for expansion in North Carolina remains very much unclear, as N.C. Health News reported earlier this month.

N.C. Health News editor Rose Hoban contributed to this report.

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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...

3 replies on “Medicaid Changes Coming into Focus”

  1. The state needs to ensure individuals with severe (true individuals)medial and mental issues are still cared for in a manner that brings about improvement.

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