Costs seen as Medicaid-managed care begins in North Carolina

RALEIGH, NC (AP) – After six years of preparations and delays, most of North Carolina’s Medicaid recipients switched to managed care on Thursday, with its developers hoping the changes will translate into improved health outcomes and outcomes. controlled costs.

“It took a long time to come,” said Rep. Donny Lambeth, a Forsyth County Republican who helped pass the Managed Care Act in 2015. and other legislative adjustments, some of which were finalized this week.

Four statewide health plans and one multi-regional plan will now manage care for about 1.6 million of the nearly 2.5 million Medicaid consumers – mostly poor children and the elderly – as well. than another program for low-income and middle-income families. Another more modest plan for members of the eastern band of Cherokee Indians has also begun.

More Medicaid consumers, especially those with addiction issues, developmental disabilities, and severe mental health issues, are switching to similar managed care coverage in July 2022.

“This is the biggest change to our program in its history,” said Health and Human Services Secretary Mandy Cohen, whose agency awarded the five-year plan contracts – which are expected to cost $ 6 billion. dollars a year – and enforce the law.

The Medicaid overhaul was originally scheduled to begin in 2018 or 2019. But it was delayed as Republican lawmakers and Democratic Gov. Roy Cooper drowned in a budget stalemate centered on whether to expand Medicaid to cover hundreds of thousands of adults through the federal Affordable Care Act. The expansion has still not taken place.

As the largest state in terms of population yet to transition to managed care, North Carolina’s foray into Medicaid privatization will be closely watched by other states and Medicaid experts. According to data from the Kaiser Family Foundation, nearly 70% of Medicaid registrants nationwide participate in managed care plans in nearly 40 states, or roughly 54 million people.

For decades, Medicaid has used a traditional fee-for-service process, where providers bill the state for each test or procedure. Now, health plans will receive monthly payments for each patient enrolled. For example, health plans will initially receive an average of $ 170 for each covered child and $ 420 per month for each adult, according to data from the Department of Health and Human Services.

The financial gains or losses of the plans will depend on what is left after medical bills and other costs. Healthier patients could mean monetary bonuses, with possible financial penalties for poorer outcomes.

Patients signed up for a health plan – some run by Blue Cross and Blue Shield and United Healthcare and others with less familiar names like Wellcare and Amerihealth Caritas – or were automatically signed up for one. Health care providers have contracts with plans and consumers are educated on what to expect.

“We feel very good at this point,” said Medicaid director Dave Richard. “There will be things that won’t work every time you get something this big, but I think we’re as prepared as possible on July 1.”

Managed care was adopted by former Republican Gov. Pat McCrory after Medicaid cost overruns in the late 2000s and early 2010s.

Initially, Medicaid spending on managed care will increase, with new administrative and underwriting expenses and more consumers still covered by the COVID-19 pandemic. Medicaid spending this coming year is expected to be $ 18.3 billion, 70% of which is paid for by federal funds and the remainder by state and other sources. Spending on medical services is expected to decline as managed care matures.

Lambeth, a former hospital executive, hopes the elimination of medical layoffs will lower overall costs. Keeping costs under control will require significant oversight of DHHS and health plan legislation, said Hemi Tewarson, executive director of the National Academy for State Health Policy.

State officials need to “really push them to do whatever they should or could do,” Tewarson said in an interview.

Tewarson said she was eager to see how North Carolina leads pilot projects that will target other ways to meet the non-medical needs of Medicaid patients such as homelessness, transportation and access to healthy foods. .

Lambeth said he was concerned that some providers might not be ready to handle the paperwork required by managed care. Other doctors or personal care agencies in small towns may not have contracts with multiple health plans, meaning some patients may learn that they cannot use these providers.

Michelle White, director of home care providers for Cone Health, covering four central counties, said consumers who have struggled during the pandemic may not realize how managed care could affect them.

“What will happen on July 1 and the days and weeks that follow will be kind of a wake-up call as people begin to understand that there have been changes with their Medicaid,” said White, whose agency will serve approximately 100 Medicaid-managed care patients daily. “We’re going to have work to do as an industry to really help them get into the right plan, the plan that is going to meet their needs.”

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