NC Gov. proposes Medicaid overhaul

By Anthony Brino
12:20 PM

After declining to expand Medicaid earlier this year, North Carolina Republican Governor Pat McCrory unveiled what he called a “comprehensive framework for reform” that would offer recipients integrated physical and behavioral healthcare while simplifying billing and administration for providers.

“We’re spending a lot of money and yet the system does not focus on improving overall results,” McCrory, who took office in January, said at a press conference.

“Because the system is so complex and operates in silos, it is often difficult for people in need to know where to get services,” thereby leading to expensive and unnecessary ER visits, McCrory said. “The system doesn’t treat the whole person; it separates physical health from mental health and even substance abuse.”

The proposal, called Partnership for a Healthy North Carolina, would have Medicaid recipients covered through a statewide system “comprehensive care entities” that form provider networks. Beneficiaries would have a single point of entry to a variety of care services, with the comprehensive care networks given authority to conduct functional needs assessment to determine best treatment courses, while also taking on more accountability, paid on a risk-adjusted per-member per-month model.

The care entities would also have to use one system for financial reimbursement, NC Tracks, the state’s Medicaid Management Information System, which could bring providers much needed administrative simplification.

“Right now healthcare professionals are telling us the system is too complex because of the administrative hoops, complex billing and uncertainty over high costs,” McCrory said, citing estimates that North Carolina’s Medicaid administrative costs are about 30 percent higher than the national average.

The plan would require a federal 1115 demonstration waiver, and McCrory said Department of Health and Human Services Secretary Kathleen Sebelius is already open to it, despite his rejection of Medicaid expansion and the creation of a state health insurance exchange.

Sebelius recently reached out to his office, McCrory said, to offer advice on designing the waiver application, and McCrory said he’s inviting her to North Carolina for a meeting.

If the waiver is granted, the state plans to issue RFPs in 2014 and aim for July 2015 implementation.

Last month, McCrory proposed a budget funding Medicaid with an additional $575 million over two years — the state’s annual contribution is about $13 billion — and also creating a $180 million reserve for any future shortfalls.

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