NC's massive Medicaid transformation delayed over budget fight

Posted November 19, 2019 3:12 p.m. EST
Updated November 19, 2019 4:11 p.m. EST

Changes coming for Medicaid providers

— Gov. Roy Cooper's administration announced the expected Tuesday: North Carolina's massive Medicaid transformation rollout will be indefinitely delayed.

Without funding, the project's Feb. 1 go-live date proved unobtainable. Department of Health and Human Services Secretary Dr. Mandy Cohen, who shepherded the project along, said as much last month as Cooper and the legislature's Republican majority continued months of sparring over the state budget.

Cooper vetoed a $502 million bill that would have funded the project, saying he wanted transformation to be part of a larger conversation on health care. He has pressed the GOP majority without success to expand Medicaid in North Carolina, providing taxpayer-funded health insurance to hundreds of thousands more people.

The delay's full impact on the state, the private companies involved and Medicaid patients across North Carolina remains to be seen – as well as how long the delay will be. Cooper confirmed the announcement Tuesday and said Cohen would roll out details in a planned Wednesday announcement.

DHHS followed up with a news release Tuesday afternoon saying nothing will change for Medicaid beneficiaries, who will get health services just as they do now. Providers enrolled in Medicaid will continue to bill the state through its NCTracks system, the department said.

"The suspension of work and the wind-down process will begin tomorrow," the department said. "Once suspended, managed care cannot easily or quickly be restarted. The department will not decide on a new go-live date until it has program authority within a budget that protects the health and safety of North Carolinians and supports the department’s ability to provide critical oversight and accountability of managed care."

Sen. Joyce Krawiec, R-Forsyth, who chairs the Senate Health Care committee, said in a statement Tuesday that the veto will "force insurers to lay off thousands of people they’ve already hired as part of the years-long plan to transform Medicaid."

WRAL News has reached out to those companies, who collectively have $6 billion in annual state contracts, for comment.

Representatives from those companies are expected to meet with DHHS on Wednesday morning.

Under transformation, the state would set average per-person rates to cover health care costs and let the companies managing the program keep profits when they stay under the cap. The providers would negotiate plans with hospitals and other health care providers, much like in the private insurance market, and they take a risk that costs will outstrip the taxpayer money flowing from the government.

The plan was to move some 1.6 million people into the program, and open enrollment began earlier this year. That has been suspended, though the call center (833-870-5500) will stay open through Dec. 13 to answer questions, DHHS said.

Transformation was a Republican priority going back years in North Carolina, though it fell to the Cooper administration to implement. Cohen tackled the project, and it moved in tandem with a related effort at Blue Cross Blue Shield of North Carolina, the state's largest insurer. Before the state's budget fight derailed, the projects got national coverage, including in The New York Times, as one of the country's most innovative efforts.

As with other aspects of the budget fight, there's been plenty of finger pointing since the funding fell apart. Republicans said they negotiated a deal with Cohen, getting rid of staffing cuts that were once part of the bill, only to have Cooper veto it.

Cooper said Tuesday there was never a deal and that Cohen "will tell you that."

"I think you can look at the history of what’s happened in the legislature to see who you can trust or not," he said. "What we have done is pushed hard to get more people with health care coverage. ... We need to come negotiate a way to do it, not just try to privatize it with not enough money. That’s not the way to do it."

Krawiec called this "another crisis of Governor Cooper’s own making."

"The General Assembly passed a clean stand-alone bill to provide the transformation funding Governor Cooper’s own DHHS secretary said she needs to do her job," Krawiec said in her statement. "Contracts are already awarded. The federal government already approved a waiver, and state legislation requires that everybody be enrolled and the rollout begin by April 2020. Secretary Cohen does not have the authority to unilaterally change the law and un-award contracts."

In his veto message at the end of August on the Medicaid funding bill, Cooper didn't take issue with the bill itself but with the underlying GOP strategy, saying the "mini-budgets" the Republican majority used to get around his veto of the overall budget are "a tactic to avoid a comprehensive budget that provides for health care and other important needs like education."

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