North Carolina Selects Prepaid Health Plans in Medicaid Transformation

The North Carolina Department of Health and Human Services (DHHS) recently announced its latest step toward the transformation of North Carolina’s Medicaid program from a fee-for-service model to a managed care program. Medical practice leaders across the state should stay informed of ongoing developments related to the transition, as these changes are likely to affect their patients and practices.

The latest announcement identifies five health insurance organizations selected to participate as Prepaid Health Plans (PHPs) and awards them with contracts worth a combined $6 billion per year, making this the largest procurement in DHHS’s history. While DHHS will maintain oversight over the Medicaid and NC Health Choice programs, the PHPs will contract directly with health care providers to deliver services, and they will assume financial risk for the provision of member care.

The Selection of PHPs

Last fall, we outlined the history of North Carolina’s Medicaid transformation. Since then, a formal request for proposal, issued in Aug. 2018, invited organizations interested in offering Standard Plans to submit bids for either statewide or regional contracts. DHHS engaged in a lengthy evaluation process of the bids and announced the selected PHPs earlier this month.

According to DHHS, approximately 1.6 million current Medicaid and NC Health Choice beneficiaries will enroll in the aforementioned Standard Plans, receiving integrated physical health, behavioral health, and pharmaceutical services. Behavioral Health Tailored Plans, which will be designed for populations with specialized behavioral health needs (and will cover about 500,000 current Medicaid beneficiaries), will be part of a later procurement process.

Based on the results of the evaluation process, DHHS awarded statewide PHP contracts to the following organizations:

• AmeriHealth Caritas North Carolina, Inc.
• Blue Cross and Blue Shield of North Carolina
• UnitedHealthcare of North Carolina, Inc.
• WellCare of North Carolina, Inc.

A regional PHP contract also was awarded to Carolina Complete Health (CCH), a provider-led entity involving the North Carolina Medical Society, Centene Corporation, and the North Carolina Community Health Center Association. CCH will offer plans in Regions 3 and 5 (indicated on the map below).

Organizations that were not awarded PHP contracts have until March 6 to appeal the selection decisions. Although appeals are expected, DHHS has stated that it is moving ahead with implementing the transition at this time.

Implementation Process—What’s Next?

Due to the size and complexity of switching Medicaid to a managed care system, DHHS is launching the transition in two phases. Regions 2 and 4 will transition to Medicaid Managed Care in November 2019 as part of the first phase, and the remaining regions will transition to managed care in February 2020 as part of the second phase.

Despite DHHS’s attempts to ensure a smooth process, the transition to Medicaid managed care may pose some challenges to patients and physician practices. To help minimize any potential challenges, practices should be aware of important upcoming events and milestones related to Medicaid transformation, including:

• Physician contracting: The selected PHPs must now begin contracting with health care providers. Physicians may contract with any number of PHPs in their area. PHPs must contract with enough healthcare providers to ensure that their networks meet required adequacy standards.
• Call centers: Each enrollment broker must have its call center operational and have required staff located in North Carolina by July 2019.
• Plan selection by beneficiaries: Beneficiaries in regions 2 and 4 will receive information about the PHPs providing Medicaid health coverage in their areas in June 2019 (Sept. 2019 for regions 1,3, 5, and 6). Beneficiaries in these areas will then select a PHP in July-Sept. 2019 (Oct. – Dec. 2019 for regions 1,3, 5, and 6). Individuals who do not select a PHP will have one automatically assigned to them by DHHS in Sept. 2019 (Dec. 2019 for regions 1,3, 5, and 6).
• Welcome packets for beneficiaries: Beneficiaries will receive welcome packets and identification cards from their PHP in Sept.-Oct. 2019 (Dec. 2019-Jan. 2020 for regions 1,3, 5, and 6).
• Continuity of care information: DHHS will provide PHPs with transition of care information for their beneficiaries to help support continuity of care and care management in Sept.-Oct. 2019 (Dec. 2019- Jan. 2020 for regions 1,3, 5, and 6).
• Launch of Phase 1: Medicaid beneficiaries in Regions 2 and 4 will begin to receive services through their PHPs in Nov. 2019 (Feb. 2020 for regions 1,3, 5, and 6).

As this transition continues, we encourage physicians and practice leaders to consult our blog for updates on important developments. Members with specific questions also are encouraged to reach out to Curi for additional assistance.

Disclaimer: This post is written in general terms and is not a substitute for legal advice or intended to create an attorney-client relationship.