Is Gov McCrory going to get rid of CCNC?

I got the following email this morning, and have gotten a version of it from many people, so I decided to blog the answer:

I have been trying for months to understand McCrory’s new Medicaid proposal and still don’t get it. So I wanted to know if you’d please answer one question: Are they getting rid of CCNC, or not? Thanks so much.


Dear XX

In short, I doubt it.

The plan they have articulated is overly grand and if they pulled it off would require:

  • 3-4 insurers, delivering full Medicaid benefit package [think prenatal care to Nursing Home for person with Alzheimers; tons broader than ACA benefit package],
  • for all Medicaid beneficiaries,
  • with each insurer enrolling patients in all 100 counties,
  • and quality would stay at least the same or get better)
  • At a price that would save North Carolina money as compared to what we would have paid

Doing this would represent the grandest reform in the history of health policy in the U.S. Keep in mind that only BCBS N.C. is selling ACA exchange plans in all 100 counties. So, they need two or three more to sell a broader benefit package than that covered in the ACA, in all 100 counties to achieve their aspirations.

To give you a sense of how grand the plan is (and it is vague; they are smart if they start to walk back the grand nature of it), If CCNC said they wanted to be 1 of the 4, they would have to

  • Add the insurance function to their organization. This is another way of saying they would have to be capitalized, or to have enough $ on hand to take on the risk involved with signing people up and saying you are financially responsible for their care. They could get the money from Wall Street, the State, or be bought out.
  • In addition to the financial issues, CCNC would have to develop a network of providers to deliver the full Medicaid benefit package. Since CCNC is a primary care delivery network, this means they would have to get contracts for specialty physician services, hospital care, nursing homes, mental health and on and on. Think, very hard. Think, mind numbingly hard in all 100 counties.

If this went ahead (have a bidding process to deliver the above), then I suspect someone would buy CCNC and brand their Medicaid Managed care plan using the name/reputation of CCNC.

If CCNC joined forces with Blue Cross/Blue Shield they would have the best chance chance of pulling off the requirements. An outside company planning to come in and battle Blue Cross/Blue Shield N.C. plus CCNC UNDER THE RULES NOTED ABOVE UNDERLINED, would be a fool (I don’t want to own their stock). If they change the rules under which bids are taken, which I expect them to do, it is a different story. If only a subset of beneficiaries are put into managed care, then cherry picking is possible, and this is the specialty of Medicaid Managed Care, which is an old, not a new story.

Paradoxically (in the sense I am sure this is not what the Republicans were dreaming about) the other state based entity who could be uniquely set up to try the grand vision articulated in the Partnership for a Healthy North Carolina, would be the State Employees Health Plan…they have members in each county and BCBS runs the claims (it is a self insured plan) so in that sense they have information about just about every provider in North Carolina.

Here is a series of blog posts I have written about the plan

Hope this helps.


About Don Taylor
Professor of Public Policy (with appointments in Business, Nursing, Community and Family Medicine, and the Duke Clinical Research Institute), and Chair of the Academic Council at Duke University . I am one of the founding faculty of the Margolis Center for Health Policy. My research focuses on improving care for persons who are dying, and I am co-PI of a CMMI award in Community Based Palliative Care. I teach both undergrads and grad students at Duke. On twitter @donaldhtaylorjr

5 Responses to Is Gov McCrory going to get rid of CCNC?

  1. Pingback: North Carolina Medicaid reform reset | freeforall

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

  3. I notice this was two years ago. In light of recent events, would you say this is still your position?
    This is one of the clearest explanations of how things might fall out that I have seen.

  4. Pingback: North Carolina Medicaid Reform Bill Moves Ahead | freeforall

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