Major Change for NC Healthcare Officially Underway

It’s been a long road, but Medicaid Managed Care is finally here in North Carolina.

As you may remember, back in 2015, the General Assembly passed legislation to move the state-run Medicaid program from a fee-for-service model to a managed care model. When it came time to fund the program, however, Governor Cooper vetoed the bill for reasons largely unrelated managed care.

So, what is managed care? Basically, it’s a different kind of payment structure that incentivizes positive health outcomes.

Here’s how it works: the state pays managed care organizations (MCOs) a set monthly fee for each person served by the Medicaid program. It’s the job of the MCO to coordinate and manage people’s care. Because they are paid a set fee, it is in the MCO’s interest to make sure a person’s care is well-managed, that health care services are utilized efficiently, and that people are kept healthy.

If the MCO does poorly and the costs exceed their monthly payment, then it’s a financial loss. If they do well – if individuals are kept healthy and services are properly utilized – then it’s revenue.

One of the main ways that MCOs ensure better health outcomes is by proactively tackling non-medical needs such as food insecurity, transportation, housing that impact a person’s health. If the needs are unmet, the MCO will connect the individual with services to address them. Addressing these factors on the frontend is often better and far less expensive than dealing with the health consequences on the backend.

Here’s what North Carolina can expect to get from Medicaid transformation.;

• Whole-Person Healthcare: Research shows that up to 80 percent of a person’s health is determined by social and environmental factors and the behaviors that emerge as a result. According to NCDHHS, “having an unmet resource need — including experiencing food insecurity, housing instability, unmet transportation needs and interpersonal violence or toxic stress — can significantly and negatively impact health and well-being.” Through Medicaid Managed Care, North Carolina will integrate non-medical services directly into a person’s care, which will lower utilization and costs.
• Food Security: Health plans will invest in managing food insecurity for those on Medicaid. Making sure people have healthy meals will help keep people well, which lowers the cost to the system and improves health outcomes.
• Housing: Health plans will work to ensure Medicaid enrollees have safe and adequate housing. If housing factors are exacerbating an illness, like childhood asthma, then it could be addressed. This investment will keep enrollees healthy, which is far less costly than the medical expense.
• Transportation: If people cannot get to their doctor’s appointment, it’s hard to stay healthy. Under managed care, the health plans will work to make sure transportation isn’t a barrier to care. Access will be increased, which will improve outcomes and lower costs.

These changes are far-reaching and innovative. They are good for taxpayers, and good for the health of some of our most vulnerable and underserved citizens and communities.