North Carolina Medicaid reform reset

The North Carolina Medicaid Advisory Commission held a public meeting yesterday, that is best described as a reset. The Governor’s initial Medicaid proposal that envisioned 3 or 4 “entities” bidding against one another to deliver the full Medicaid package in all 100 counties is now dead (7 part series on the plan; more).

In its stead appears to be the beginnings of a regional-based approach (map below) that will be messaged around “building upon the strengths of existing North Carolina providers”.

ScreenHunter_01 Dec. 06 15.37

This reset addresses some of the concerns that privatization would entail the state “walking away from exisiting provider organizations now serving the Medicaid” population. However, the figure above noting the “% payments out of region” still points to a desire to have managed care companies go ‘at risk’ for covered lives in defined geographical areas. However, some Republican members of the General Assembly appear to be skeptical (not just the Democrats). They are asking the question: what would out of state managed care/insurance companies add to the State?

A few preliminary thoughts.

  • The Governor’s initial plan outline was unworkable, and it is good that they have moved away from that.
  • The map above divides the State into regions in which large, integrated health systems would have an obvious advantage in delivering care: Carolinas Health Care System in region 6, Vidant (East Carolina University) in region 7. Wake Forest take region 2. Duke and UNC are both in region 3, but UNC has a big presence in region 1 as well.
  • If at least part of the Medicaid population will be put into comprehensive (across the benefit package; more than just primary care) at risk managed care contracts, who has the heft to bid? The obvious in state insurer is Blue Cross/Blue Shield North Carolina, and then I am sure some of the national for profit managed care companies will be interested. The large in-state health systems could contract with insurers, but they actually have the provider brands in the State. Why give that away? My guess is the next weeks and months will see the creation of new, state-based managed care organizations that join the insurance function with the care delivery footprint of these large provider systems to defend the Medicaid market share they now enjoy. They really don’t have much choice.
  • What about Community Care North Carolina, the highly touted primary care delivery network that is the backbone of current Medicaid primary care now? They could contract with all, some, or one of the various managed care companies, insurance companies, or large delivery systems (and presumably this could differ by region of the state). They are certainly at the heart of a “lets go with what works well in North Carolina” message. Earlier this year, some worried that CCNC would be killed. Now they are very much alive.
  • The past 15+years have seen tremendous aggregation of health care providers in North Carolina. If North Carolina goes ahead with an at risk managed care approach to the program, that will just increase the pressures for further aggregation of one type or another (maybe even provider/insurance aggregation), as the big in state care delivery players prepare to fend off the out of state for profit managed care companies.

Stay tuned.

About Don Taylor
Associate Professor of Public Policy at Duke University and author of Balancing the Budget is a Progressive Priority. On twitter @donaldhtaylorjr

4 Responses to North Carolina Medicaid reform reset

  1. Pingback: North Carolina Medicaid reform reset | freeforall | The Health Policy Skeptic

  2. Pingback: How N.C. Could Expand Insurance Coverage via the Basic Health Plan? | freeforall

  3. Pingback: N.C. Senate Budget on Medicaid | freeforall

  4. Pingback: Medicaid reform in North Carolina | freeforall

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