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Here's how North Carolinians will be affected by proposed Medicaid changes - eventually

Posted January 11, 2020 5:00 a.m. EST

In 2015, the N.C. General Assembly directed the N.C. Department of Health and Human Services to transition Medicaid from a fee-for-service model to managed care, marking a major change in Medicaid policy.  (onephoto/Big Stock Photo)

This article was written for our sponsor, Alliance Health.

When it comes to Medicaid transformation in North Carolina in 2020, some people may be wondering when it will happen.

North Carolina's transformation of its Medicaid program aims to deliver physical and behavioral health services in a more integrated and cost-effective way through new Standard Plans and Tailored Plans. Instead of paying for each healthcare visit or service individually, it would instead pay a set rate for the administration of beneficiary services.

In 2015, the N.C. General Assembly directed the N.C. Department of Health and Human Services to transition Medicaid from a fee-for-service model to managed care, marking a major change in Medicaid policy. Under managed care, the state will contract with insurance companies, or health plans, who direct networks of healthcare providers and facilities to provide more effective care more efficiently.

North Carolina's Local Management Entities/Managed Care Organizations (LME-MCOs), like Alliance Health, have been operating under a managed-care model since 2013, and are planning to transition to operating a Tailored Plan under Medicaid transformation.

Tailored Plans will ensure comprehensive, whole-person care for people with severe mental illnesses, substance use disorders and long-term care needs, including intellectual/developmental disabilities and traumatic brain injuries. Beneficiaries would have all of their care – physical and behavioral healthcare, and pharmacy services – managed by a single health plan.

Standard Plans would provide comprehensive care – physical and behavioral healthcare, as well as pharmacy services – for most North Carolina beneficiaries, including those with mild-to-moderate behavioral health issues.

However, this managed-care implementation and open enrollment for Medicaid health plans have been suspended for now due to the continuing state budget stalemate.

"Under managed care, the state contracts with insurance companies, which are paid a predetermined set rate per person to provide all services. The department was on track to go live [with this] on February 1, 2020. New funding and program authority was required from the General Assembly to meet this timeline," DHHS said in a November 2019 statement. "The N.C. General Assembly did not take needed action and managed care implementation and open enrollment for N.C. Medicaid must be suspended. Managed care will not go live on February 1, 2020."

For now, Medicaid will continue to operate under the current fee-for-service model used by physical healthcare providers, and the managed-care model employed by the behavioral health managed care organizations.

"Nothing will change for Medicaid beneficiaries – they will get health services as they do today. Behavioral health services will continue to be provided by the LME-MCOs. All health providers enrolled in Medicaid are still part of the program and will continue to bill the state through NCTracks," the statement continued.

"Let's say you're on Medicaid and need a behavioral health service. That service is managed by an organization like us, the LME-MCO," Doug Fuller, communications director at Alliance Health. "Until Medicaid transformation goes live and integrates behavioral and physical healthcare services, you must get your physical healthcare from somewhere else."

Fuller continued, "While LME-MCOs already receive a lump sum to oversee behavioral health outcomes for each beneficiary, your physical healthcare services are paid for by the state on a fee-for-service basis. If you get some X-rays and treatment for a broken arm, for example, your doctor bills the state for each service. With managed care, the federal government pays the health plan X amount of dollars per month for every Medicaid-eligible individual in its coverage area.

"MCOs hold the financial risk associated with the health of their members, and are incentivized to use resources wisely and improve health outcomes."

Rob Robinson, CEO of Alliance Health, added that the "LME-MCO public managed care system has been successful in achieving the mandate of the North Carolina's General Assembly and the Department of Health and Human Services to obtain Medicaid budget predictability and gain control over rising healthcare costs."

"Since the implementation of managed care, the LME-MCOs have met their legislative directives, not possible under a fee-for-service model, through active consumer education and outreach, effective care management, and development of innovative, evidence-based services," he said. "Alliance is a strong supporter of the DHHS direction for transitioning the entire public healthcare system to managed care."

North Carolina Health News reported the Medicaid transformation will happen – DHHS officials just aren't sure when.

Things to Know Now About N.C. Medicaid Transformation

  • Medicaid's move to managed care has been suspended until further notice.
  • Current Medicaid beneficiaries will keep getting Medicaid services the way they do now.
  • Beneficiaries do not need to choose a health plan at this time.
  • The state will inform beneficiaries when the transition to managed care restarts and when they will need to choose a health plan.

"Benefitting from lessons learned from Medicaid policy in other states and the start-up experience of North Carolina's Standard Plans over the coming months, Alliance, which serves over 386,000 individuals in central North Carolina who are Medicaid-eligible or uninsured/underinsured, is designing its operations to meet the broader goals of Medicaid transformation," Robinson wrote in a North Carolina Medical Journal article.

He added, "We believe this transformation to managed care across the board is the most effective way to ensure that all citizens served by our state's public system receive the comprehensive, whole-person care they deserve."

To keep abreast of developments in North Carolina's Medicaid program, visit the N.C. Department of Health and Human Services or Alliance Health website.

This article was written for our sponsor, Alliance Health.

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