From the beginning of his administration, Gov. Pat McCrory has been committed to reforming North Carolina Medicaid into a system that puts people first and is centered on patients.

On Wednesday, after nearly three years of discussions with North Carolinians from every corner of our state, and we finalized our reform plan and submitted it to the Centers for Medicare and Medicaid Services.

This is a historic milestone that sets forth our state’s vision for population health improvement in North Carolina. As a result of its clinical, financial and health informatics scale, Medicaid has the potential for driving systemwide transformation toward this vision.

Currently, 20 percent of all North Carolinians receive Medicaid services, and 56 percent of all children born in our state are born to mothers receiving Medicaid. In total, our Medicaid budget is $14 billion per year. Clearly, Medicaid is an important commitment by our taxpayers to serve fellow citizens in need. We have an obligation to make sure financing is sustainable, and we are getting the best health outcomes possible for that investment.

To do so, we will transform health and health care in North Carolina:

▪ From paying for how many services patients receive to paying for improved patient outcomes.

▪ From focusing on physical health to clinically integrating physical and behavioral health.

▪ From not having flexibility with payments to having the flexibility to address social, cultural and environmental barriers to health.

▪ From discontinuing care in families with substance-use disorders after their children are placed in foster care to extending care to those parents to increase the likelihood of family reunification.

▪ From no financial incentives to providers to transform care to incentive reform payments tied to quality measures.

▪ From only the state facing financial risk to providers sharing responsibility with the state for achieving healthy outcomes.

Did our department address all needs and interests of all stakeholders in the June 1 submission? No. Like virtually all major change initiatives – whether in the public or private sector – we operate within budgetary, operational, regulatory, legal and political constraints. However, we made important revisions between the March 1 draft and the June 1 submission.

So, what’s next? The pathway to approval will involve discussions between CMS and our Department of Health and Human Services. Our team is committed to ongoing collaboration with CMS to produce the best results for North Carolinians. We expect this process to take 18 months. Including preparations for implementation, we expect the process to take three years.

Meanwhile, we will work on “the foundation” for implementation. We will work with our partners to define the priorities for improving health and health care of North Carolinians. We will develop the contract framework for prepaid health plans to accomplish transformation goals. We will implement a Health Information Exchange, a secure electronic system where providers will be able to share and view real-time patient health information to improve coordination and care. And we will put in place a Health Transformation Center to rapidly spread the state’s best quality improvement ideas among clinicians and prepaid health plans.

Most importantly, we will continue to listen to beneficiaries, advocates and stakeholders. They will continue to be invaluable partners in our process of transformation.

Our state has a history of innovating nationally recognized practices in Medicaid. Our Medicaid reform plan builds on that history, advances whole-person centered care and contributes to addressing health disparities in underserved areas of our state, while accelerating systemwide transformation of our health care system for all.

Rick Brajer is secretary of the N.C. Department of Health and Human Services.

The submission

Find a complete copy of the June 1 submission to Centers for Medicare and Medicaid Services or to see a summary of the feedback received through public hearings and submitted comments at

Transforming health care in North Carolina with Medicaid reform
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