A dispute over which health insurers are the best options for the state’s ambitious Medicaid transformation initiative took two new twists this week.
The program is expected to cover between 1.6 million and 1.8 million North Carolina participants beginning July 1, 2021.
A key selling point for transformation is focusing on a patient’s overall health for those experiencing mental health, substance abuse and developmental disability issues.
The N.C. Department of Health and Human Services said Thursday that a state Office of Administrative Hearings judge has affirmed its process for selecting four statewide health insurers as prepaid health plans (PHPs).
DHHS said Judge Tenisha Jacobs notified the affected parties she granted the department’s request for summary judgment. Jacobs ruled in June 2019 to deny the plaintiffs’ request to halt the implementation of transformation, finding they were not likely to succeed on the merits of their claims.
DHHS announced in February 2019 that the four PHPs are Centene (operating as WellCare of N.C.), AmeriHealth Caritas N.C., Blue Cross and Blue Shield of N.C. (operating as Healthy Blue) and UnitedHealth Group.
Meanwhile, on Tuesday, the three health insurers not chosen by DHHS filed a petition for judicial review in Wake Superior Court. Aetna has said it should have been chosen over Blue Cross NC
The three-year PHP contracts for the four insurers are expected to be worth $6 billion a year. With two optional one-year extensions, a contract could be worth a total of $30 billion.
A joint appeal petition was filed in September 2019 by Aetna, Optima and MyHealth by Health Providers, a proposed PHP in which Cone Health, Novant Health Inc., and Wake Forest Baptist Medical Center are three of 12 hospital supporters. They are co-plaintiffs in the Superior Court lawsuit.
State health secretary Dr. Mandy Cohen stressed to legislators in October 2019 she was confident in how the four PHPs were selected through a scoring process.
“Blue Cross NC has confidence that the bid procurement process was conducted fairly and without bias, and it looks forward to continuing to serve the citizens of North Carolina,” Blue Cross N.C. said in November 2019.
Aetna requested in November 2019 that an administrative law judge void the Blue Cross NC contract.
Aetna said in a statement addressing its civil lawsuit that it continues to cite potential conflicts of interests between Blue Cross NC and DHHS officials handling the procurement process.
In particular, it has accused DHHS of manipulating the process for how it determined the four PHP.
Aetna said that Jacobs’ ruling “validates our decision to pursue our Medicaid protests against DHHS in Superior Court.”
“We look forward to the opportunity to present our concerns about the state’s procurement process … to help ensure that Medicaid beneficiaries in North Carolina have the most qualified and experienced health benefit plan to help them achieve optimal health outcomes.”
Moving ahead
Five years’ worth of often-controversial public health and legislative debate culminated July 3 when Democratic Gov. Roy Cooper signed Republican-sponsored legislation that provided pivotal start-up funds.
State health officials told legislators on Aug. 11 they plan to begin open enrollment for the initiative on March 15 in order to launch the program as mandated on July 1.
The main launch challenge is getting the four statewide PHPs operational by the enrollment date.
The state Medicaid program currently serves 2.31 million North Carolinians, or 22% of the state’s population.
That number is projected to increase to 2.39 million by mid-2021, in part as more individuals lose employer-sponsored health coverage along with their jobs as a ripple effect of the COVID-19 pandemic.
About 48% of current Medicaid participants are children in households receiving temporary assistance for needy families.
Those affected by the initiative are scheduled to be enrolled through a federal waiver approved by the U.S. Centers of Medicare and Medicaid Services in October 2018. CMS has to approve the state’s changes.
Managed care is a system under which people agree to see only certain doctors or go to certain hospitals, as in a health maintenance organization, or HMO, or a preferred provider organization, or PPO, health-insurance plan.
Under the current Medicaid system, providers are paid on a fee-for-service model administered by DHHS.
By contrast, the PHPs will pay health-care providers a set amount per month for each patient’s costs. There will be a limited number of special-needs individuals who will remain with fee-for-service providers.
The next big roll-out step for DHHS is formulating the per-patient rates for providers by November and submitting them to CMS.
DHHS will reimburse the PHPs, and people will be able to choose which PHP they want to sign up for, or a provider will be assigned to them by May 14.
Some of the initial Medicaid transformation funding would go toward patient enrollment-broker contracts, provider credentialing, data analytics and other program-design components.
Blue Cross has said it plans to create 500 jobs for its portion of the transformation.
Centene has committed to creating an East Coast regional headquarters and technology hub in Charlotte with an estimated 6,000 jobs and $1.03 billion capital investment.