By Sarah Ovaska and Rose Hoban

Wondering when North Carolina will actually shift its massive Medicaid program, which provides health care for more than 2 million North Carolinians to managed care?

So is everyone else, including the people whose day-to-day jobs are running Medicaid.

“We have not set a date and honestly we’re waiting like everyone else to see what the legislature” does this week, said Dave Richard, the N.C. Department of Health and Human Services Assistant Secretary in charge of Medicaid and N.C. Health Choice. “We don’t want to put something out without having certainty around the budget.”

He’s well aware of the state Senate’s intentions to make a run at overriding Gov. Roy Cooper’s veto this week during a “mini-session” that will convene on Tuesday.  But Richard said DHHS is unaware of any concrete plans of how to revive managed care beyond that.

Richard’s boss, N.C. DHHS Secretary Mandy Cohen, called off the Feb. 1 start date for Medicaid managed care last fall, citing the months-long impasse over the state budget over the separate, but related, question of expanding the Medicaid program. She had already nixed a plan to phase in an initial region part of the state in the fall, with no budget in place to pay for the nuts and bolts of the switch.

Big program, big budget, big changes

Medicaid itself is a federal safety net program created in 1965 that provides healthcare for some of the nation’s most vulnerable residents – poor children, seniors and those with significant disabilities. In North Carolina, nearly 2.2 million people currently depend on Medicaid, amounting to about one in every five people in the state. More than half are children in low-income families. The program comes in at over $14 billion a year, paid for with a mix of federal and state dollars, with the feds putting up $2 for every $1 that comes from state coffers.

Medicaid transformation, the term that’s been used for the switch to managed care, was born out of an effort to move the state away from its current fee-for-service model, where the state essentially pays medical providers directly for every hospital visit, physical therapy appointment, and wellness exam.

Republican lawmakers then and now in the majority, had long decried the uncertainty that model injected into the biennial budget-writing process, with the state’s share for the safety net program fluctuating at times. And managed care has been the path most other states have moved to, with North Carolina the largest state to hold off from the move. North Carolina’s plan also wrapped in ambitious policies to address what are called social determinants of health, things such as housing, access to nutrition, transportation and exposure to violence that can undermine a person’s health but are rarely paid for in the current U.S. health care system.

Five managed care groups were selected last February for the lucrative contracts estimated to account for over $30 billion over five years. The managed care companies selected are AmeriHealth Caritas, Blue Cross Blue Shield of North Carolina, United HealthCare, WellCare and Carolina Complete Care, a plan backed by the N.C. Medical Society that will be run by Centene.
The new managed care model invited in managed care companies as well as provider-led groups to handle all of a person’s health care needs while being compensated on a per-person rate.

Nearly 1.6 million Medicaid beneficiaries will need to sign up with one managed care group, and then use medical practitioners in those networks. There are approximately 500,000 people receiving Medicaid who have more complex needs, including those with costly and complicated behavioral health issues, that would remain under the state’s purview for the next few years.

After Cohen suspended the go-live date, there’s been no indication of when things will start up again. Those on Medicaid will continue with the existing system and shouldn’t see a difference in their care and access to providers, Richard said.

Providers around the state will continue to get paid as they are, but Richard acknowledges that the freeze in plans is difficult for doctor practices, hospitals and others around the states whose businesses are built around Medicaid and were anticipating the February go-live date.

“People are managing but there’s no question this is disruptive,” he said.

A priority deferred

The delay has frustrated lawmakers as well.

“We should be going live right now as we phase in that option, but we’re not there,” said state Rep. Donny Lambeth (R-Winston-Salem), co-chair of the N.C. House Health Committee. “We need to get there and get back on track, if we can.”

He pointed out that the transformation had been a priority for his Republican colleagues in the Senate who pushed for the policy change in the 2015 legislative session when it finally passed into law.

“It was a high priority for them, you may remember that [the Senate] leveraged that with the House, not wanting to adjourn back in 2015 until we got Medicaid transformation,” he said. “It was a big deal, and I think it still is a big priority, top priority for them.”

Medicaid expansion and Medicaid transformation explainer
Infographic credit: Liora Engel-Smith.

Many providers, including the state’s hospital systems, were skeptical that the Feb. 1 start date was realistic to begin with. Part of the reason is the intensely complicated negotiations providers were going through with the various managed care companies. Other issues had to do with the enrollment broker, whose website meant to enroll beneficiaries had glitches that resulted in an inability to look and see plans specialists had signed up for.

“We did not think anyone was ready for February,” said Leah Burns, government relations director for the N.C. Healthcare Association, which represents the state’s hospital systems. “Contracts were not in place, a lot of the systems had not been tested.

“There were a lot of things that were not lining up,” Burns said.

The five managed care groups have only signed up a portion of the state’s existing Medicaid providers, 40 percent at last count, according to DHHS.

There are also concerns that the switchover could bring a billing fiasco similar to what the state experienced in 2013 when the bungled rollout of the billing NC TRACKS system went live and left some providers in the state waiting for weeks, even months, for payment.

But Richard said he hoped providers were using this unexpected break to get those contracts in place so that when managed care does come back, things will be ready to go.

What about expansion?

When the current legislative session began about a year ago, advocates were optimistic that North Carolina stood a chance to expand the Medicaid program, a policy that’s different from transformation, but related.

Expansion would be facilitated by policy changes put in place by the Obama Administration’s signature Affordable Care Act, allowing adults who currently don’t qualify for Medicaid, but who earn less than the required amount to qualify for subsidized insurance on the ACA marketplace.

For years, even as organized medicine threw its weight behind allowing as many as a half million low-income wage earners onto the program and as other Republican-controlled states embraced expansion, legislators in the Republican-controlled General Assembly said no. The argument was that Medicaid needed to be “fixed” before it could be expanded.

Now Cohen and many House Republicans say they believe that time has come.

Last year, for the second time, a group of Republican members of the House of Representatives put forth a bill that would combine expansion with work and wellness requirements, along with grants to enhance rural access to care.

Lambeth, the lead co-sponsor on HB 655, said last week he believes he’s got a solid passage should the bill ever make it to the House floor.

“I have counted noses I’ve talked to a lot of legislators, both parties, and I’ve got the votes I need to get it passed,” Lambeth said. “I’m in the close to 72 to 75 range that would support that bill and actually have a number of Republican colleagues who have agreed to speak in favor of it.”

Back in the fall, Lambeth said he’d hoped there would be movement on passing the bill this week. Now the legislative agenda for the mini-session has narrowed considerably.

“What I’ve heard was most people don’t want to be in Raleigh but a short time, and therefore there won’t be a lot of other agenda, particularly controversial items taken up,” Lambeth said.

Man stands at a podium, points at an easel with a display on it, explaining his Medicaid expansion plan
Winston-Salem Rep. Donny Lambeth (R) lays out the details of the NC Health Care for Working Families Act at a press conference at the state capitol in April, 2019. Photo credit: Rose Hoban

This is what multiple health care lobbyists say they’ve heard too, that lawmakers will come and go quickly. That means no action on expansion, for now. Nonetheless, advocates have scheduled a press conference for Wednesday morning to press for the move.

Lambeth plans to have breakfast with DHHS leaders on Tuesday morning to discuss what happens next. He said there’s a chance the General Assembly may look at the question of expansion after the March 5 primary election.

“I think there’s a lot of people already on the campaign trail, raising money,” he said. “Even I have a primary, I’ve never had a primary and I’ve got a primary now.

“That’s sort of preoccupied a lot of time.”

But he’s not giving up on finally moving HB 655 forward.

“I think the House is in a good position to move it whenever we decide to do that, whenever leadership decides to give me the okay to move forward”,” he said. “I think the question then becomes what the Senate will do once we pass it over and that I don’t know the answer to.”

This post changed from the original to remove a reference to this Tuesday’s legislative session being billed as healthcare-focused mini-session. 

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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...

2 replies on “Medicaid questions hang over this week’s NCGA “mini-session””

  1. Hi Sarah Ovaska,
    Thanks for the detailed article
    Can you please post about any positive outcomes on the medicaid transformation from tuesdays mini budget session

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