The state Department of Health and Human Services proposes to expand Medicaid and restructure the state’s controversial mental health provider networks, Secretary Mandy Cohen said Tuesday.

Cohen spent several months on a “listening tour” getting information from medical providers, patients, and other members of the public. The feedback resulted in a comprehensive report that received a lukewarm response from Republican General Assembly leaders.

“While we are still reviewing the white paper, we appreciate Secretary Cohen taking steps to implement our Medicaid transformation to save tax dollars, achieve greater budget sustainability, and deliver high-quality care to keep North Carolinians healthy,” Senate leader Phil Berger, R-Rockingham, and House Speaker Tim Moore, R-Cleveland, said in a joint statement.

“While hospital care is only about 19 percent of the Medicaid spend in our state, we recognize that our increasingly integrated health systems have an important role in keeping Medicaid recipients in our communities healthy by providing access to primary care as well as appropriate care after a hospitalization,” said Julie Henry, spokeswoman for the North Carolina Hospital Association.

She said the Hospital Association would continue to work with DHHS to improve Medicaid.

Two million people in North Carolina get Medicaid, and the reforms would affect about 1.8 million of them. Medicaid pays for prenatal care, 50 percent of births, and covers two in five children and three in five people in nursing homes.

The proposed reforms would implement a law passed by the General Assembly in 2015 to rein in enormous annual overspending, administrative chaos, and other problems in the DHHS Medicaid division.

The 2015 law shifts the state away from a costly fee-for-service model it operates to a system run by statewide Medicaid managed care organizations known as Prepaid Health Plans, and regional, provider-led entities.

Under fee-for-service, every treatment is paid for separately. Under managed care, a capitated amount is allocated per patient, per month, with a focus on value, and measurable health outcomes.

The DHHS proposal builds on a Medicaid waiver, submitted last year, still awaiting action from the federal Centers for Medicare and Medicaid Services. Cohen said public comments will be taken until Sept. 8.

Cohen hopes for waiver approval by the end of the year or early in 2018. The reforms would not begin to take place until July 2019 at the earliest.

A hallmark of the new system is to provide whole-person care by integrating physical health and behavioral health treatments. That would be done under a system of coordinated care overseen by case managers who ensure patients are following doctors’ orders. Medicaid recipients would have a choice of plans to select.

Cohen didn’t specify how large a Medicaid expansion might be. The white paper says the expansion would be sought under proposed legislation to create Carolina Cares.

That program would allow low-income people to receive Medicaid based on required work activities and premium payments.

Expanding the Medicaid rolls requires legislative approval. The General Assembly and Gov. Roy Cooper undertook a heated legal showdown earlier this year when Cooper tried to expand Medicaid unilaterally.

Other parts of the proposal also would require lawmakers’ approval, including any remake of the state’s Local Management Entities/Managed Care Organizations. Those state-created agencies provide services for mental health, substance abuse, and intellectual and developmental disabilities.

The House and Senate have quarreled over the future of LME/MCOs. Two competing versions of legislation passed during this year’s legislative session, with the House keeping the networks intact and the Senate seeking to fold them into the managed care transformation.

A conference committee was formed to iron out differences. As of the end of last week, that committee had not met