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NC sends Medicaid reform plan to feds

Posted June 1, 2016 3:43 p.m. EDT

— After years of debate and months of work, North Carolina's plan to overhaul its Medicaid system is now in the hands of federal regulators.

Gov. Pat McCrory on Wednesday signed an application seeking a waiver from the government to allow changes to how the $14 billion health insurance program for the poor and disabled is run in North Carolina.

"Our proposal provides a North Carolina Medicaid plan that focuses on patient-centered care and improves health outcomes at more predictable costs," McCrory said.

The application seeks the following changes in the state's Medicaid system:

  • Pay for improved patient outcomes instead of for individual services provided
  • Integrate physical and mental health services
  • Increase flexibility to invest in external factors to improve health
  • Extend help to children of people with substance abuse problems to increase the likelihood of reuniting families
  • Offer incentives to providers to improve long-term health outcomes
  • Share the cost of care between the state and health plans and providers

"What this waiver is all about is all different design elements that are all part of our future of reform," Secretary of Health and Human Services Rick Brajer said. "We talk about how we're going to change the provision of care, how we're going to pay for care, how we're going to motivate the community at large to focus on the patient."

The waiver application follows last September's passage of legislation that shifts Medicaid to a managed care system to limit the state's financial exposure to cost overruns in caring for a growing number of people.

The legislation creates two tiers of insurers, one that divides the state into six or seven regions where provider-led entities – groups of doctors and hospitals – provide care and services to patients and a second in which three organizations can provide services to Medicaid patients across the state. For-profit managed care companies and provider-led entities will be able to bid on the three statewide slots.

The Centers for Medicare and Medicaid Services is expected to spend at least 18 months reviewing North Carolina's waiver request. If approved, state officials said it would take another 18 months to implement the changes.