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by Rose Hoban, North Carolina Health News
July 2, 2021
Dave Richard woke up at midnight on July 1, sent a few emails to legislators and to people on his work team, and went back to sleep.
It was a rather unremarkable evening, and by his account, a peaceful sleep for Richard, given that something remarkable was happening. Midnight was the time that the state’s Medicaid plan made the big switchover from being a state-run and managed program to care for millions of low income North Carolinians to being a program managed by private insurance companies.
Richard is the program’s director.
About 1.6 million out of the state’s more than 2.5 million beneficiaries were moved into the managed care system at midnight. About 1.2 million of those people are children under the age of 21.
The remaining people – primarily people with mental health, intellectual and developmental disabilities, people with traumatic brain injuries and other beneficiaries who need more intensive services, will be moved to managed care in the middle of 2022.?
Five companies were chosen to provide managed care services to the state’s beneficiaries:
Until Wednesday, North Carolina’s Medicaid program was wholly administered by state employees who paid the bills submitted by doctors, made the decisions around authorizing some forms of specialty care and managed all of the logistics of the program. All that work cost about $14.8 billion in 2019 (the price tag bumped up to $16.8 billion during 2020 with spending on the pandemic).
State expenditures for the past two years have come in just at $3.8 billion, with the rest of the tab being picked up by the federal government.
According to the Kaiser Family Foundation, about 70 percent of the nation’s Medicaid beneficiaries have their care administered by a managed care company. Before July 1, North Carolina was the largest state in the U.S. that did not have a significant number of patients being managed by commercial managed care.
In the past, Medicaid was a fee-for-service system, where doctors, hospitals and other health care providers were paid for each visit, test, procedure and intervention. For instance, a doctor treating a patient with diabetes would get paid separately for the provider visit, each blood test, the check on that patient’s feet (people with diabetes frequently have problems with their extremities because of poor blood flow) and a nurse to teach that patient about how to manage their insulin.
Those costs could add up.
For patients, at least at first, things could seem pretty much the same. The differences may be subtle at first.
With managed care companies, those same doctors, hospitals and other health care providers deliver the care for patients for a set fee, for those providers “manage” that patient’s care. In the past, there were few parameters around delivery of quality care, so the managed care companies and providers would make money by cutting corners on patient care, or denying those patients their care outright.
With managed care these days, there’s more of a focus on delivering quality outcomes. Now, for that same patient with diabetes, the doctor might be paid a set fee for the visit, the check on the feet, the blood test and the medication teaching session. That patient teaching session? It might be done in a group setting where three or four patients work together with a nurse, thus trimming the costs.
Many states have seen good results with managed care, said Matt Salo, head of the National Association of Medicaid Directors, who called North Carolina’s transition to managed care, “an important journey designed to refocus the health care system on improving outcomes.
“Moving to managed care means creating a public-private partnership where the accountability around better care is a joint responsibility of the state and the plans,” he said.
For now, there’s little for patients to notice about the switch to managed care, but many expect there will be bumps in the road.
Many patients didn’t understand what was happening to their Medicaid. Despite a media blitz by DHHS, only about 15 percent of patients made a choice of which managed care company to have deliver their care, the rest were auto-assigned. That’s actually typical across the country.
“You’re not going to make this big of a change without some problems,” said Greg Griggs, who heads the NC Academy of Family Physicians.
He said he’s got to give credit to the state Department of Health and Human Services for getting everything ready to meet the deadline set by the state legislature last year, even as the department was scrambling to respond to the coronavirus pandemic. There were contracts to negotiate, people to hire, computer systems to switch over, regulations to write and lots of federal paperwork; making such a transition takes a lot of effort.
“A lot of this happens in the weeds,” said Elizabeth Hudgins, head of the North Carolina Pediatric Society. “And then there’s figuring out how each and every plan does something just slightly different.”
“They’ve been very responsive to us going into this and trying to anticipate as many problems as they have, they’ve had a ton of webinars for providers,” Griggs said. “The last couple of [webinars] they’ve had all the chief medical officers for all the plans. All the chief medical officers have given people like me and Elizabeth [Hudgins] their cell phone numbers.”
Resources for providers: DHHS created a one-page first day of managed care tip sheet for providers that can be accessed here. DHHS created a FAQ here with a check list, answers to provider questions and answers to the types of questions patients will be asking.
By now, patients should have received a card in the mail listing their managed care company. The medical billers in some providers’ offices need to learn the systems for the managed care companies managing their offices’ patients. They’re headed to online listservs and Facebook groups to ask basic questions such as where are the patient numbers on the new cards, how can they determine eligibility for new patients, and how to submit claims.
Each managed care company may be using third-party claims processors who each have different forms, different software and different ways to submit claims for the care they’ve delivered. Providers may not know which managed care company their patients are covered by and are tuning into endless webinars on how to learn all these new tasks.
And those providers are wary. They now have to sign contracts with two, three, maybe even five managed care companies so they can see patients from around the state.
“From a practice perspective, you’re going from contracting with Medicaid, to maybe [contracting] with five different plans,” Hudgins said.
Griggs said he worries about the administrative burden for providers and their billing staff. The big worry, he said, is that when claims get filed there might be snafus and delays in getting paid. That’s what happened in 2014, when the state rolled out its glitchy software system, NC Tracks.
When it comes to long term outcomes, that’ll take more time.
“If you’re talking about a healthy birth for somebody who just walked through the door for a pregnancy test,” finding out how that patient fared will take months, Hudgins said.
“Up to date on immunizations for two year old? You need to be two,” she said. We’re not going to know what the outcomes are, but we’ll know if there are patient claims being filed, are patients being seen?
“We can know from anecdote how things seem to be going,” she said.
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