Friday, 01 March 2019 13:59

Medicaid managed care won’t save money at first, lawmakers told

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RALEIGH — The handoff of the state-operated single-payer Medicaid program to a private managed care system won’t provide taxpayers any immediate relief.

That was the report Mark Collins, a member of the legislative Fiscal Research Division, gave Thursday to a joint legislative committee.

“We’ve taken ourselves away from some of the risks surrounding utilization, and mix of services, and cost of services,” Collins said. “I think there will be more budget predictability. But at least in the first couple of years I think there would not necessarily be savings relative to our existing system.”

Collins said most parties agree a smooth transition will be the first way to indicate success. Preparations should begin now, though, to determine how to measure success and effectiveness of the changeover in five to 10 years including whether Medicaid recipients are being served better by the new system.

The shift to commercial managed care companies will end most Medicaid fee-for-service functions. Instead of providers getting paid for every service during a visit, a capitated payment plan will be installed. Providers will receive a set monthly amount to cover all services, and be on the hook if they can’t meet a patient plan for healthy outcomes at that reimbursement rate.

Four commercial plans, known as Prepaid Health Plans, received statewide contracts: AmeriHealth Caritas North Carolina, Inc.; Blue Cross and Blue Shield of North Carolina; UnitedHealthcare of North Carolina, Inc.; and WellCare of North Carolina, Inc.

The state was divided into six regions to allow coalitions of doctors and/or hospitals to seek Medicaid network contracts. Carolina Complete Health Inc. was the only qualifying bidder. It will give Medicaid members more options in Regions 3 and 5.

About 1.6 million of the state’s 2.1 million Medicaid recipients will move into the managed care system. The rollout will come in two phases: the first in November, and the rest in February 2020. Patients can choose a PHP or regional provider. Most, however, are unlikely to choose. They’ll be assigned to a network.

“I think even under ideal circumstances there’s going to be some disruption," Collins said of the launch.

State Department of Health and Human Services Secretary Mandy Cohen said during her presentation six major technology and operational functions have to be created from whole cloth. Beneficiary enrollment, eligibility checks, verifying addresses, provider contracting support, data management, and procurement and oversight of the PHPs are all part of the process.

Sam Gibbs, DHHS deputy secretary for technology and operations, said the transition will be difficult because the systems are linked by 144 unique data connections. That’s three times as many as is now required to link the systems.

Dave Richard, DHHS assistant secretary for Medicaid, said beneficiaries will maintain the same level of services, and eligibility criteria won’t change. County departments of social services still will implement the plan. DHHS discussions are ongoing among them, boards of county commissioners, and county managers.

The transition requires lawmakers to pass several pieces of legislation this session. They include replacing $700 million in state payments to hospitals to care for Medicaid patients. Another bill must pass before insurance premium taxes can be collected from the managed care companies.

Rep. Greg Murphy, R-Pitt, a urologist who co-chairs the joint health care appropriations committee, is not a fan of the managed care format.

“The money comes from taking away services. Let’s just be very clear of that,” Murphy said. His main concern was making sure the most vulnerable people weren’t harmed.

“This will be a cluster to start off with. Everybody agrees with that,” Murphy said. He and Sen. Floyd McKissick, D-Durham, worried that the launch could mirror the months-long enrollment and payment problems associated with NC Tracks, the multi-payer Medicaid management information system.

“I don’t want a cluster at all,” Cohen said. “We have learned a lot of lessons from that first rollout of NC Tracks.”