New North Carolina Medicaid reform proposal

The North Carolina Senate released a revised Medicaid reform proposal yesterday, that signals the beginning of the last stages of negotiation with the House. Some highlights:

  • Instead of relying totally on private managed care companies as did the initial Senate proposal, the revised version would also allow so-called “Provider Led Entities (PLE)” also enter into capitated arrangements to cover Medicaid beneficiaries (page 1, lines 27-31).
  • Organizes the state into “at least 5 and no more than 8” regions for the purpose of Medicaid contracting, with each county having to be in one region (p 2, lines 3-5).
  • All Medicaid beneficiaries except for Dual-Eligibles must be a part of the new at-risk, capitated program. Excluding the dual-eligibles is a big deal. They are covered by Medicare and Medicaid, and are among the sickest, most expensive Medicaid beneficiaries, in large part because they are receiving lots of long term care in addition to acute care. Excluding them increases the chances this approach will be reasonably successful. However, the dual-eligibles (many posts) are also the most expensive and difficult group of beneficiaries to care for (p 3, lines 14-16).
  • The proposal insists on 3 statewide contracts between managed care companies and/or PLEs that can deliver the full benefit package in all 100 counties; the bill would allow regional contracts as well for subsets of the state in addition to the 3 statewide contracts. Providing such as expansive benefit package in all 100 counties is a big lift for any MCO and PLE (p 2, lines 15-30).
  • Medicaid beneficiaries will have at least 3 choices for open enrollment, but not more than 5 (3 statewide and up to 2 additional in a given region). The proposal also calls for auto-enroll procedures if someone doesn’t make a choice (p 2, lines 29-31).
  • Medicaid contracting for Medicaid primary care case management with Community Care of North Carolina (CCNC) would end as of April 30, 2016 (p 25, lines 15-44). The goal of the Senate (unlike the House) is to end CCNC, but I wonder if portions of CCNC will become a key part of either a statewide and/or regional PLEs?
  • MCOs or PLEs that bid are forbidden from limiting a providers ability to be a part of another bidders network (p 3, 28-29).

I put forward this white paper for Medicaid reform in North Carolina in January, 2014. I don’t have a problem with moving toward managed care, and explicitly favored allowing both managed care companies and providers (like health systems and the like) to bid for covering patients. I have always been skeptical of the grandiosity of the Republican plans (3 choices of plan in each county, rapid shifting of beneficiaries), and would prefer moving slower in terms of adding Medicaid beneficiaries into a such a system. In fact, I would start with newly insured persons covered by a Medicaid expansion (the NC Senate hasn’t proposed such an expansion), while this bill only moves existing beneficiaries without expanding coverage under the auspices of the available Medicaid expansion. This bill does exempt the dual eligibles by my read, which makes good sense.

Key questions that are floating in my mind.

  • Will BCBS NC bid? What will the State Employees Health Plan do? These two entities are the existing N.C. grown groups with the best chance of pulling off the 100 county coverage required for the statewide contract.
  • Is CCNC dead, or will they emerge as important for either a statewide bid, or more likely some regional bids? They are the existing entity in the State with the most experience of coordinating the care of Medicaid beneficiaries.
  • Will the big health systems throw in together in some type of consortia to fight off the out of state managed care companies? I would guess that yes they will.
  • What is the reform plan for the dual eligibles, the most expensive group of beneficiaries in the health care system?

We will see now what the House says.

update: revised for clarity and fixed a couple of typos

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

3 Responses to New North Carolina Medicaid reform proposal

  1. Pingback: Health Policy Updates: August 8 2015 |

  2. Pingback: NC Medicaid By the Numbers: Where Money Gets Spent | North Carolina Health News

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

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