NC Medicaid Transformation

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Overview

With enactment of Session Law 2015-245 in 2015, the North Carolina General Assembly directed the North Carolina Department of Health and Human Services (NC DHHS) to transition Medicaid and NC Health Choice from fee-for-service to managed care. 

Under the fee-for-service model (now called Medicaid Direct), NC DHHS contracted directly with providers and reimbursed them for the number of services provided. Under NC Managed Care, NC DHHS will contract with commercial prepaid health plans (PHPs) and pay them a set rate per person (or capitated rate). 

Most Medicaid beneficiaries (about 1.6 million out of 2.1 million) will transition to Managed Care standard plans during staggered enrollment periods beginning in summer 2019. Beneficiaries must select a Primary Care Provider (PCP) and enroll with a PHP and will receive the same services they do today. 

Beneficiaries with more specialized behavioral and health needs will transition to tailored plans that will be procured in mid-2021. Local Management Entities-Managed Care Organizations (LME-MCOs) will continue to exist until becoming tailored plans in 2021.

Goals and Vision

NC DHHS has collaborated with healthcare providers, health plans, government officials, beneficiaries, advocates, and other stakeholders with the goal of developing Medicaid managed care plans that:

  • “Deliver whole person care through coordinated physical health, behavioral health, intellectual/developmental disability and pharmacy products, and care models
  • Address the full set of factors that impact health, uniting communities and health care systems
  • Perform localized care management at the site of care, in the home or community
  • Maintain broad provider participation by mitigating provider administrative burden”

Source: “NC Medicaid Transformation Section 1115 Demonstration Waiver Webcast Presentation," NC DHHS Secretary Mandy Cohen, M.D., 10/26/2018

NC DHHS’s vision for Medicaid Transformation is:

"To improve the health of North Carolinians through an innovative, whole-person centered, and well-coordinated system of care that addresses both medical and non-medical drivers of health.”

With these goals and vision in mind, NC DHHS is launching NC Medicaid Healthy Opportunities Pilots as part of Medicaid Transformation to provide healthcare providers, human services organizations, and health plans with resources to integrate non-medical drivers of health into the delivery of care. Up to $650 million in Medicaid funding will be provided to pilots for:

  • Delivery of federally approved pilot services related to food, housing, transportation, and interpersonal violence/toxic stress;
  • Capacity building in the first 2 years of the 5-year demonstration for Lead Pilot Entities (LPEs) and Human Services Organizations (HSOs) to prepare for effective delivery of pilot services.

NC Medicaid Transformation Timeline

Open enrollment for Phase 1 counties has been extended to coincide with open enrollment of Phase 2 counties. There will be one statewide implementation date on February 1, 2020. NC DHHS will coordinate with DSS and others to ensure Beneficiaries in Regions 2 and 4 know they have more time to enroll with a Prepaid Health Plan (PHP) and select a Primary Care Provider (PCP).

October 2018

1115 waiver approved by CMS

February 2019

Managed Care Standard Plan contracts awarded to PHPs

June 28, 2019

Enrollment packets mailed for Phase 1 standard plans

July 15, 2019

Phase 1 open enrollment begins

Summer 2019

Standard Plans contract with providers; and NC DHHS assesses network adequacy

October 1, 2019

Enrollment packets mailed for Phase 2 standard plans

October 14, 2019

Phase 2 open enrollment begins

December 13, 2019

Open enrollment ends for both Phase 1 and Phase 2

December 16, 2019

Auto-assignment for both Phase 1 and Phase 2

February 1, 2020

Health Plan coverage begins for both Phase 1 and Phase 2

July 2021 (Tentative)

Behavioral Health and Intellectual/Developmental Disability (BH I/DD) Tailored Plans launch

* Dates are approximate and subject to change. Visit https://www.ncmedicaidplans.gov for updates.

Source: Medicaid Managed Care Update, NC DHHS Secretary Mandy Cohen, M.D., September 4, 2019

NC DHHS will continue working with the North Carolina General Assembly on a budget package for Fiscal Year 2019-2020 with the goal of implementing Managed Care statewide in February 2020. They project a new budget must be passed by mid-November to adhere to this new timeline.

Please consult the NC DHHS website for the September 4, 2019, webcast on updates for NC Medicaid Transformation for answers to questions and concerns impacting beneficiaries, health plans, and providers.

Key Terms

  • NC MEDICAID DIRECT: this is the current fee-for-service model where NC DHHS reimburses physicians and healthcare providers based on the number of services they provide, or the number of procedures they order. (Approximately 0.5 million beneficiaries will remain on Medicaid Direct.)
  • NC MEDICAID MANAGED CARE: NC DHHS will contract with insurance companies, called Prepaid Health Plans, PHPs, or Health Plans. These insurance companies will be paid a pre-determined set rate per person (or capitated rate) to provide all services to each beneficiary. (Approximately 1.6 million beneficiaries will transition to NC Medicaid Managed Care.)
  • ELIGIBILITY: refers to whether a person qualifies for Medicaid or North Carolina Health Choice (NCHC). Eligible individuals may need to enroll in a Health Plan.
  • ENROLLMENT: the process of joining a Health Plan that is responsible for that person’s Medicaid health coverage.
  • BENEFICIARY: a person who is eligible for Medicaid or NCHC.
  • MEMBER: once a beneficiary enrolls in a Health Plan.
  • STANDARD PLAN: integrated physical & behavioral health services under NC Medicaid Managed Care.
  • TAILORED PLANS: specialized plans for members with significant behavioral health needs and intellectual/developmental disabilities. Tailored plans will be coming in 2021.

Please see Medicaid Transformation Fact Sheet 1 for more information about key terms and the roles and responsibilities of key partners in Medicaid Managed Care.

For More Information

For more detailed information about NC’s Medicaid transformation, please visit the following pages: