NC DHHS “High Level Overview” Medicaid Reform

North Carolina’s Department of Health and Human Services rolled out a “high level overview” of Medicaid reform recommendations to the N.C. Medicaid Advisory Commission this afternoon. The Commission will provide feedback, and then N.C. DHHS makes a proposal to the North Carolina General Assembly by March 17, 2014. A few quick thoughts before I am off to teach (realizing the meeting is still underway):

  • Care will be provided by Medicaid Accountable Care Organizations (ACOs), with the structure of such not being clear, but the goal being movement towards integrated delivery networks being fully at risk to share savings/loses with the State. In early years, the risk to providers is less and walks up over time. Key questions: who can be ACOs? How many will there be per region of the State? Why is Community Care North Carolina not mentioned? There is lots of rhetoric about building upon what now works in North Carolina, but they leave out the most obvious current player in Medicaid in the state.
  • By 2018, 80% of Medicaid beneficiaries are to be covered by Medicaid ACOs. The most important question here is who are the 20% not covered by then? If they are primarily the long term disabled and the dual eligibles, I think this is doable. Keep in mind that over half of the Medicaid beneficiaries in N.C. are children and after adding adults you are up to 75% of the total. I think they are essentially saying they will put all of Medicaid into ACOs that are not dually eligible for Medicare or long term disabled by 2018, and then address long term care separately (see below).
  • They suggest consolidating mental health and intellectual development and disability services into 4 Local Management Entities (LME). Note there are 7 Medicaid regions, so provision of mental health and some of the specialized long term care services would be more broadly organized?….a big issue is integration of this care with Medicaid ACOs; this will be very hard and very important.
  • On Long Term Care, they call for a broad strategic process, and “assessing the viability of a risk-based, managed LTSS delivery model that spans all LTSS services.” They are smart to leave themselves a way out on this…I don’t think a fully at risk approach to this group (dual eligibles) is really possible given the breadth of the long term care needs they have and who they are. However, the conversation they describe about rationalizing the long term care delivery system is worth having. Keep in mind that Medicaid is the default nursing home insurance program in the state and nation and has been so for 40 years. I give them credit for getting straight that Medicaid is not one monolithic program, and separating out the long term care services and supports issue for a separate discussion. This is key to good Medicaid policy.

A good deal of my white paper Don Taylor NC Health Reform Proposal 1 14 14 on health reform in North Carolina is reasonably consistent with this general approach. The missing piece from what N.C. DHHS proposed today is any way to expand insurance coverage in the State. There is a great deal of rhetoric coming out of the meeting already about the “provider community in North Carolina” stepping up to move towards at risk provision of care to the Medicaid population for the good of the State. Fair enough. I suspect that the large integrated delivery systems are ready to go, in part because if they don’t then outside managed care companies will come in and do so. However, I suspect a big part of the discussion from the provider side (writ large) going forward will be that they are ready to step up if the State is ready to expand insurance coverage. That will quickly become the predominant question.

update: revised a bit for clarity.

About Don Taylor
Professor of Public Policy at Duke University (with appointments in Business, Nursing, Community and Family Medicine, and the Duke Clinical Research Institute). I am one of the founding faculty of the Margolis Center for Health Policy, and currently serve as Chair of Duke's University Priorities Committee (UPC). 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

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