AIS Health: North Carolina Medicaid Waiver Approval Clears Tailored Plans

North Carolina Medicaid Waiver Approval Clears Tailored Plans

Reprinted with AIS Health’s permission from the November 1, 2018, issue of Radar on Medicare Advantage

North Carolina’s major transformation from fee-for-service to managed Medicaid is moving right along, as CMS on Oct. 19 approved the state’s 1115 demonstration waiver, which includes the implementation of Tailored Plans to provide integrated care to beneficiaries with high behavioral health needs. Meanwhile, bidding on the first phase of its managed care transition closed on Oct. 19, with eight managed care organizations vying for standard Prepaid Health Plan (PHP) contracts with the state.

As directed by a North Carolina General Assembly law passed in 2015, the Dept. of Health and Human Services (DHHS) will enter into capitated PHP contracts to cover all Medicaid and NC Health Choice services. The agency on Aug. 9 issued a request for proposals (RFP) from MCOs interested in serving as Standard Benefit Plans that will provide integrated physical health, behavioral health and pharmacy services to the majority of Medicaid and NC Health Choice beneficiaries with lower intensity behavioral health needs.

Most Publicly Traded MCOs Bid

Nearly all publicly traded Medicaid insurers bid on the opportunity, with the exception of Molina Healthcare, Inc., which had previously stated it will not participate in the RFP as it refocuses on its margins and health plan businesses. Those bidders were: Aetna Inc., Anthem, Inc.’s Amerigroup unit (in partnership with Blue Cross and Blue Shield of North Carolina), Centene Corp. (in partnership with the North Carolina Medical Society), UnitedHealthcare and WellCare Health Plans. Other bidders were AmeriHealth Caritas, My Health by Health Providers and Optima Health.

During a recent call to discuss third-quarter 2018 earnings, Centene Chairman and CEO Michael Neidorff said the insurer has been preparing for the North Carolina RFP “for several years” and established Carolina Complete Health as a physician-led plan with a statewide, member-focused approach.

“We feel we are well-positioned due to our joint venture, which is consistent with our local approach. Furthermore, our participation in [the] North Carolina marketplace will be recognized in the Medicaid RFP scores,” he asserted.

But the RFP was complicated and placed myriad expectations on health plans, which may have scared off other potential competitors, Neidorff later acknowledged during the question-and-answer portion of the call. The state expects to announce winners in early February 2019 and to implement the first standard plans in November 2019.

Tailored Plans Are in Talks With Partners

Entities that won’t have to bid but instead will undergo a comprehensive readiness review process to serve as Tailored Plans are the seven local management entities (LME)/MCOs that currently manage the behavioral health needs of about 170,000 individuals. The CEOs of four such plans during a recent session at the Medicaid Health Plans of America Annual Conference, held Oct. 22-23 in Washington, D.C., explained that there will be roughly a 22-month period where individuals with “mild to moderate” behavioral health needs will be pulled out of capitation, while the higher need individuals continue to receive behavioral health services from the LME/MCOs and physical health care on a fee-for-service basis.

These MCOs would continue to serve about 85,000 beneficiaries with serious behavioral health issues and intellectual/developmental disabilities (I/DD), but may serve many more as there will not be a cap on the number of individuals in Tailored Plans. By implementing Tailored Plans, the state expects to save approximately $28 million to $38 million a year, driven by reducing overlapping or redundant care coordination, avoiding unnecessary utilization, and providing integrated care management to enrollees with co-occurring chronic medical and behavioral conditions.

The state is currently on track to implement Tailored Plans around July 2021. Initially, only LME/MCOs may qualify in the first four years. The legislation said between five and seven may serve as Tailored Plans.

“The big part of the evolution for our organizations [will] be going from purely being a behavioral health provider to one that actually does integrated care, so the population will get smaller but the array of services will broaden,” explained Trey Sutten, CEO of Cardinal Innovations Health Care, one of the four MCOs on the panel.

Furthermore, LME/MCOs will be required to partner with a standard plan, and Sutten said a lot of the behavioral MCOs have been communicating with the potential bidders “about what form that might take on.”

CMS Administrator Seema Verma in the approval letter to DHHS observed that North Carolina’s five-year demo will likely assist in improving health outcomes through a pilot program aimed at addressing select social determinants of health such as housing, transportation and food. And in an Oct. 24 Health Affairs blog post, Verma praised the state’s “groundbreaking” use of enhanced case management services in the pilot regions, where health plans will identify and target populations of high-need Medicaid beneficiaries and determine a package of specific services tailored to individuals’ needs.

CMS Rejected Community Engagement

Meanwhile, the agency turned down a request to impose monthly premiums and community engagement requirements on nonexempt adult participants in the Carolina Cares program. Introduced in the state house last year, Carolina Cares would meet the needs of people who are ineligible for Medicaid due to their income levels but are otherwise unable to afford health insurance.

CMS said it cannot consider this program since the state does not currently have state legislative authority for Carolina Cares.


Contact Sutten via Cardinal spokesperson Ashley Conger at (704) 467-3808.

by Lauren Flynn Kelly

Article from AIS Health