News: CJ Exclusives

Lawmakers suggest managed care groups running Medicaid are too similar

State Health and Human Services Secretary Dr. Mandy Cohen, speaking Feb. 4 at the John Locke Foundation. (CJ file photo)
State Health and Human Services Secretary Dr. Mandy Cohen, speaking Feb. 4 at the John Locke Foundation. (CJ file photo)

State lawmakers expressed concern Tuesday the long-awaited transformation of the state Medicaid system to a managed care format might have missed the mark in a fundamental area.

During a House Health Committee meeting, Senior Chairman Greg Murphy, R-Pitt, told  N.C. Health and Human Services Secretary Dr. Mandy Cohen the entities which will treat 1.6 million people in November, when they take over day-to-day operations of the Medicaid system from the state, may lack diversity.

The choices skewed toward large commercial entities, while mostly excluding hospital- and doctor-led networks. In passing the reform law, legislators intended to have a variety of networks. Such a mix would let DHHS compare methods and results to identify best practices.

“I don’t see a big mix there,” Murphy said. “I think it’s a missed opportunity.” Medicaid recipients will have fewer treatment options as a result.

Cohen said a rigorous scoring process disqualified several applicants. None of the successful plans scored above 70 percent. She said a lot of work is needed to help successful bidders strengthen weaknesses identified by the evaluation process.

The plan called for six statewide contracts for Prepaid Health Plans, but only four commercial plans were selected — AmeriHealth Caritas North Carolina, Inc.; Blue Cross and Blue Shield of North Carolina; UnitedHealthcare of North Carolina, Inc.; and WellCare of North Carolina, Inc.

Under the plan, the state was divided into six regions in which coalitions of doctors and/or hospitals could seek contracts.

Just three provider-led entities expressed interest, and two submitted bids. Carolina Complete Health Inc. had the lone qualifying score and will serve Regions 3 and 5.

Under the new managed care program, providers no longer will be paid for every clinical service they administer. Instead, they will get a set monthly fee for each patient and must create a plan of care to improve the patient’s health. Other goals include opening access to care and reducing costs. Physical and mental health will be coordinated.

“This is the most consequential undertaking in the state right now,” said committee Chairman Josh Dobson, R-McDowell. It’s also the largest procurement in the state history.

“This is a hard change,” Cohen said. An area as complex as health care doesn’t lend itself to simple fixes.

Oversight safeguards are built into the system. Cohen said DHHS staff will require Prepaid Health Plans to reach measurable standards. Plans which don’t could face financial sanctions or even termination of a contract.

The 1.6 million people moving to the managed care programs will be on standard plans that roll out in two phases.

The first launch in November will include beneficiaries in Alamance, Alleghany, Ashe, Caswell, Chatham, Davidson, Davie, Durham, Forsyth, Franklin, Granville, Guilford, Johnston, Nash, Orange, Person, Randolph, Rockingham, Stokes, Surry, Vance, Wake, Warren, Watauga, Wilkes, Wilson and Yadkin counties. Beneficiaries will be able to pick their plan in July.

The second phase for all other counties is set to begin in February 2020.

Patients with more severe clinical diagnoses will be moved later into tailored plans operated by the state’s existing LME/MCO entities.