By Sarah Ovaska-Few

No one said it would be easy to move 1.6 million Medicaid recipients away from the existing fee-for-service system that’s been in place for decades, to a new system with a different management and payment model.

And that message – it’s not easy — is what state lawmakers heard Wednesday as top officials from the N.C. Department of Health and Human Services, including Sec. Mandy Cohen, updated lawmakers on the switch to managed care, which is supposed to go into effect Feb. 1.

“This is hard work,” said Dave Richard, DHHS’ Medicaid director at a House Health Committee hearing. “Everything is not going to go right.”

Also floated during the meeting was another delay of the start date for the new regimen to July 1. Lawmakers and provider groups cited the uncertainty arising from not having an agreed-upon state budget and the difficulties providers face in signing contracts with the five managed care groups – AmeriHealth Caritas NC, Carolina Complete Care, Health Blue by BCBS, UnitedHealthcare and WellCare. (All but Carolina Complete Care are signing up Medicaid providers across the state. Carolina Complete Care is limited to a 41-county region in the state’s midsection.)

A screenshot of the NCDHHS website for Medicaid where there's information about Medicaid transformation.
More than 70,000 Medicaid enrollees  already selected a plan, Sec. Cohen said on Wednesday. Medicaid transformation, slated to go into effect Feb. 1, may be delayed because of the budget standoff.

State Rep. Donny Lambeth, R-Forsyth, a chair of the House Health Committee and a strong proponent of the managed care switch, told Cohen she might start considering what a delay to July 1 would look like.

“I don’t see that that’s even a realistic timeline,” Lambeth said about the current Feb. 1 start date.

Cohen said she’d act on the legislature’s wishes but warned that another delay – could be challenging and costly with vendors and staff lined up and ready to respond to the current Feb. 1 start date. DHHS already did away with a phased rollout this fall because of budget uncertainties.

“You lose the talent of the people who know things” about the transition, she said. “Delay is not free and we will work with you on however we move forward.”

Medicaid, through a $14 billion mix of federal and state dollars, provides health care to low-income seniors, people with disabilities, children and some of their family members. In North Carolina, that accounts for about one of every five people. It’s also one of the largest government programs run by the state of North Carolina. Its $14 billion annual cost is funded through a mix of federal and state dollars with the federal government chipping in about $2 for every $1 the state spends.

North Carolina previously used a fee-for-service model, where DHHS essentially cuts checks for every flu shot, hospital stay and occupational therapist visit a Medicaid beneficiary needed. But the state legislature, citing frustration over fluctuating budgets, moved in 2015 to switch to a managed-care model. Under managed care, the state would use that same pot of state and federal dollars to instead pay insurance companies or care delivery groups a per-person, per-month rate to instead handle each beneficiary’s entire care needs.

The goal is not only to save money – but use that per-person model to encourage more preventive health measures that could improve peoples’ quality of life and health over time.

Slow signups

Among the prominent challenges Cohen and Richard outlined for lawmakers: health care providers have been slow to sign up, with only about 40 percent of the physician offices, physical therapists and others who currently treat Medicaid patients signed up with at least one of the five new managed care plans. On top of that, only a quarter of the state’s hospital systems have signed contracts with a managed care group, and negotiations for some could be weeks or even months away from resolution.

Not everyone is behind in signing up. UNC Healthcare, one of the largest health care provider networks in the state, signed contracts with AmeriHealth Caritas NC, WellCare of NC and BCBS of North Carolina, according to a spokesman.

Dave Richard headshot
Dave Richard heads North Carolina’s Medicaid program. Image courtesy: NC DHHS

Richard, in an interview last week with N.C. Health News, said DHHS has been disappointed more providers haven’t signed up but hopes more will negotiate contracts with managed care groups now that open enrollment has begun.

“People feel a sense of urgency now,” he said.

The agency also needs to have primary care doctors signed up by Nov. 15 in order to be part of the auto-enrollment process, when Medicaid matches beneficiaries who didn’t elect to sign up with a particular managed care company to a plan their primary care doctor has joined. Patients will have 90 days to switch to another plan as well, if their auto-enrollment doesn’t prove to be a good match.

“We know that so many people will not make a choice,” Richard said in an interview. “We want to make sure we have as many participants” signed up as possible.”

Then, there’s been issues with the enrollment broker MAXIMUS’ website that’s ( intended to help people easily decide what managed care company is the best fit for them and their families. Specialists aren’t currently included in a searchable provider database, meaning that if someone wanted to see what plan their endocrinologist was signed up for, they couldn’t look online to do that and would need to call up their specialist or the enrollment broker.

Meanwhile, notices have gone out to 1.6 million North Carolinians who will be affected by all the changes. They’ve been told to choose a managed care plan by Dec. 13.

 No budget in sight means more problems 

Adding to the complications is the significant issue of there being no state budget almost four months into the fiscal year.

The 2019-20 state budget has been caught up in the separate, but related, standoff between Gov. Roy Cooper, a Democrat who wants Medicaid coverage offered to low-income adults unable to afford their own health care. Republican state legislative leaders who have so far resisted Cooper’s pleas to expand Medicaid, a signature piece of former U.S. President Barack Obama’s Affordable Care Act.

Cohen said that she would need a state budget passed by Nov. 15 in order to be ready for the planned start date of Feb. 1, when those 1.6 million North Carolinians will start having their health care paid for under the new managed-care system.

Without a budget by mid-November, it’s unclear how or if the agency could flip the switch to managed care without incurring additional costs, Cohen said. There’s also the likely loss of experienced DHHS staff and vendors currently lined up to handle the intense workload anticipated before and after the switch.

“You’re almost running two full organizations at the start,” Cohen told lawmakers. “It is not a switch that you pull on Feb. 1. It takes time to wind things up and wind things down.”

But legislators – both Republican and Democrats – told Cohen they weren’t optimistic things would be in place for her timeline.

Groups representing medical providers also spoke Wednesday about their challenges in meeting DHHS’ deadlines, citing the complexity of the contracts with the managed care companies and the on-boarding process to new systems.

“We want to serve the [Medicaid] beneficiaries, but there’s simply not enough time for Southeastern to be ready by this timeline,” said Thomas Johnson, the former CFO and current reimbursement officer for Southeastern Health, a hospital and health care system based in Lumberton.

Meanwhile, people who have received the notices about Medicaid open enrollment have been calling Southeastern and asking which managed care plans the hospital system is signed up with.

“We’re getting flooded with phone calls,” Johnson said. “We’re not prepared yet to answer those questions.”

For those deciding what plan to choose, Richard, the state’s Medicaid director, encouraged them to ask if their providers have chosen to go in-network with a particular managed care group. If beneficiaries haven’t yet asked, he told N.C. Health News they should ask doctor offices what managed care networks they plan on signing contracts with.

That way, patients can get an idea of what managed care network might best fit their needs. Providers should pass that information on, even if contracts haven’t been finalized, he said.

“They should feel very comfortable in saying that to their patients,” Richard said.

N.C. Health News reporter Liora Engel-Smith 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 (

Creative Commons License

Republish our articles for free, online or in print, under a Creative Commons license.

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...