State health officials told legislators Tuesday they plan to begin open enrollment for the Medicaid transformation initiative on March 15 in order to launch the program as mandated on July 1.
The program is expected to cover between 1.6 million and 1.8 million North Carolina participants.
Meanwhile, the N.C. Department of Health and Human Services said the state’s Medicaid program was under budget by $116 million, or by 3%, during fiscal 2019-20 after spending $3.8 billion in state funds.
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.
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 main launch challenge is getting the four statewide prepaid health plans, or PHPs, operational by the enrollment date.
The PHPs are Centene (operating as WellCare of N.C.), AmeriHealth Caritas N.C., Blue Cross and Blue Shield of North Carolina (operating as Healthy Blue) and UnitedHealth Group.
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.
Managed care
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 healthcare 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.
Transformation was supposed to debut initially on Feb. 1, 2020, in the Triad and Triangle, and then statewide on June 1, 2020, before being postponed in November by state health Secretary Dr. Mandy Cohen.
The managed care program is expected to be worth up to $6 billion a year for four years, with an option to continue the contract at the same rate for another year. That represents a change from the original proposal of three years and two option years.
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.
Medicaid budget
After having a combined $1.5 billion financing gap during fiscal years 2010-11 through 2012-13, the state’s Medicaid program has been under budget the last seven fiscal years.
The overall state Medicaid budget grew by 7% during fiscal 2019-20 when federal funding and other revenue sources are counted.
The biggest service categories were the $3.12 billion spent by the state’s seven behavioral-health managed care organizations, and the $2.12 billion spend on pharmacy expenses.
DHHS said some of the savings came from “lower claims volume from social distancing,” a federal funding bonus and accelerated hospital supplemental payments.
DHHS is projecting $600 million in COVID-19 treatment, testing and other costs in fiscal 2020-21. DHHS expects that $500 million of those expenses could be offset by federal stimulus bonus payments.