By Sarah Ovaska-Few
North Carolina’s state health agency named the five managed care groups who will receive a combined $6 billion in annual Medicaid contracts, ushering in a massive overhaul of how the state cares for some of its most vulnerable residents.
The announcement Monday was expected, the most recent step after the Republican-led state legislature in 2015 scrapped the state’s existing fee-for-service management of its Medicaid program for the more than 2.1 million low-income seniors, disabled persons, children and their families on Medicaid.
The new managed care system will have the state contract with managed care groups, who will be paid a per person, monthly rate to cover all of an individuals’ needs. The first phase will have 1.6 million of those people choose from the just-announced managed care companies, while an additional half-million people with complex behavioral health needs will remain on the fee-for-service model until moving to separate tailored managed care plans over the next five years.
“We feel good about the amount of choice that folks have across the entire program and we’re looking forward to getting started,” said N.C. Department of Health and Human Services Secretary Mandy Cohen in a call Monday afternoon with reporters.
The four companies receiving statewide contracts are:
- AmeriHealth Caritas North Carolina
- Blue Cross and Blue Shield of North Carolina
- UnitedHealthcare of North Carolina
- WellCare of North Carolina
Three of the four are in the for-profit space, with experience in other states running Medicaid managed care programs. Blue Cross and Blue Shield of North Carolina is structured as a not-for-profit and, while without direct experience in Medicaid, is one of the state’s largest health insurance providers and will have a leg up on the out-of-state companies that need to develop relationships and contracts with providers statewide.
A provider-led group backed by the N.C Medical Society was the sole provider-led group to pass muster, and wasn’t initially chosen by the evaluation committee, Cohen said. She and Dave Richard, DHHS’ Medicaid director, elected to add the provider-led group Carolina Complete Health in Regions 3 and 5, clusters of counties surrounding Charlotte and in the southeastern corner of the state.
“We felt it was important to include them, even when the evaluation committee did not recommend them for any of the regional contracts,” Cohen said. “But we did it in a way that we felt like folks could truly be successful to start a little bit smaller.”
Carolina Complete Health is a partnership between North Carolina’s main doctor group, and Centene Corporation, along with the North Carolina Community Health Center Association. Centene, which had close to $49 billion in revenues in 2017, has had mixed results in other states where it managed Medicaid programs.
One group not awarded a contract was My Health by Health Providers, created by a group of the state’s hospitals along with a managed care company, Presbyterian, which is based in New Mexico.
“While we are disappointed that no provider group got a statewide contract, NCHA and our members are committed to working with payers to ensure that healthcare providers are actively involved and adequately reimbursed to ensure a patient-centered Medicaid program,” said Cody Hand, vice-president for advocacy and policy at the North Carolina Healthcare Association, which represents hospitals.
Another state-based bidder rebuffed by state regulators was Optima Health, which joined forces with the Norfolk, Va.-based Sentara Healthcare and has a total of 12 hospitals but only one in North Carolina – in Elizabeth City in the northeastern corner of the state. Had Sentara been chosen, the company would have had to cobble together a network to provide services in more than two dozen other counties, with some locations as much as three hours away from the Elizabeth City facility.
“Optima’s total score did not achieve the threshold to ‘meet expectations,’” wrote Medicaid head Dave Richard in a letter accompanying the materials about the contracts awarded.
What’s ahead
Monday’s announcement was significant for several reasons, including the size of the contracts, which at $30 billion over five years is the largest in the state health department’s history. It’s also significant because of what it aims to do – move 1.6 million people to a managed-care system.
The contracts announced Monday will be a cumulative $6 billion each year, paid out of a mix of federal and state dollars.
To put that amount in perspective, it means DHHS will be paying these five groups more than $16 million each day, or about $685,000 an hour.
Monday’s decision will trigger a flurry of activity, with doctors, hospitals and other providers now needing to negotiate contracts and agreements about fees with groups in order to continue to serve the Medicaid population.
DHHS prepared a fact sheet about its selection decision here .
The state agency also announced which patients will be first in line for the switch to managed care.
An estimated 565,000 Medicaid patients in 27 counties across the Piedmont and in the Triangle will transition to the managed care system on Nov. 1 (referred to as Regions 2 and 4 in this DHHS map).
Those individuals will be contacted this summer about the statewide plans they’ll need to choose from and those who don’t select a plan themselves will be assigned one based on their current doctors, Cohen said.
[sponsor]The agency decided that those counties should go first out of concern that an active hurricane season in late summer or fall could make it difficult to enroll people in the eastern part of the state in time for the November start date, Cohen said. The Piedmont and Triangle counties are also in close proximity to DHHS headquarters, and Cohen and her team anticipate a lot of in-person contact before the November start date.
Things to look for
The state still hasn’t announced what it will pay each of the managed care groups per person, a rate expected to be announced this month.
Also, the managed care companies will have to show they are ready to handle the influx of patients as they switch care over to the new model. Readiness reviews this summer will indicate whether the managed care groups will be prepared to begin delivering care in November, Richard said.
As one of the requirements of being a managed care provider is providing “network adequacy,” that is, contracting with enough providers in the region to ensure that everyone who looks for care can find it relatively close by. In a sparsely populated and impoverished part of the state, this might have been a challenging task.
Greg Griggs, who heads the North Carolina Academy of Family Physicians, said he’s working with his members to “give them the tools to ask the right questions to all the plans so they can choose the right partners for their individual practices.”
Both Griggs and Elizabeth Hudgins, who leads the NC Pediatric Society, expressed concern that under Medicaid managed care, there would be more paperwork for physicians, who, in essence, are going from one payor, the state, to a handful of managed care organizations.
“We just want to make sure that as many processes are streamlined as possible and know that people can focus on the care and not using the right form that it’s about providing the right care,” Hudgins said. “The department is clearly focusing a lot on that with things like credentialing and things like that, which we really appreciate.”
Nonetheless, Griggs said he’s pleased that a provider-led plan is in the mix. “I’ve yet to speak with any of the plans who were awarded contracts and look forward to being in contact with them soon to see how family medicine can play a role as we move forward,” he said.
Finally, North Carolina is getting a lot of attention for its approach to social determinants of health, factors such as housing, transportation and exposure to violence that can undermine a person’s health.
The waiver the state received from the federal Centers for Medicare and Medicaid Services last year gives North Carolina permission to do something no other state can – use Medicaid dollars in two to four pilot areas to address those issues.
Expect that to start in 2021, an indication of how much planning needs to go into this new approach, Cohen said. DHHS has also not announced where the pilot programs will be.
N.C. Health News editor Rose Hoban contributed to this report.
N.C. Health News will be covering Medicaid transformation closely this year. Share your thoughts about our coverage, or ask questions, by emailing reporter Sarah Ovaska-Few (sarahovaskafew@gmail.com).
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I am utilizing Medicare and Medicaid. How will my care be affected by this new Medicaid plan. I am a low income retiree.