Our Perspective: North Carolina Medicaid Rollout Suspended

On November 19, the North Carolina Department of Health and Human Services (NCDHHS) announced that the transition to Medicaid managed care would be indefinitely suspended. The release points to the General Assembly’s failure to pass a budget that would provide NCDHHS spending and program authority to implement and operate the new program. Senate Republicans argue that they provided the transformation funding and that the Governor’s choice to veto and delay puts the result squarely on his shoulders. While this sort of political gamesmanship and gridlock is not uncommon these days, the finger-pointing does nothing to manage the fallout that providers and beneficiaries will experience as a result.

So, what is happening? According to NCDHHS, they will maintain the status quo. In short, the existing delivery system does not change. Beneficiaries continue to receive services as they do today, and providers will continue to submit claims through NCTracks and under the existing Local Management Entities (LMEs).

If only it was that simple…

On a call with provider groups, NCDHHS leadership explained that suspension was a word used deliberately. Whereas previous announcements indicated that go-live was delayed to a later date, the suspension is indefinite. There is no future date predicted for go-live and NCDHHS was very clear that this was “not a day-for-day delay.” In other words, while suspension occurred at 73 days until go-live, if a new budget were passed on January 1 it would not result in a go-live 73 days later. Activities and plans that were underway to achieve a February 1 start date are now winding down with many active efforts such as Open Enrollment being “turned off” as soon as operationally possible. The Department indicated that restarting these activities would take additional time that is indeterminable at this time.

What should we do now? In response to a myriad of these questions from provider groups, NCDDHS indicated that prior to the suspension they “were ready to go live February 1” and that this suspension should not be seen as an indication that they were less than ready. Furthermore, the NCDHHS lead for Medicaid Transformation said that they were so fully committed to managed care that they had no contingency plan for not going live. And it was not a matter of if they would go live, but rather when. Yet their lack of contingency plans means that they have very little in the way of real answers for what is next.

NCDHHS leadership, however, did say that while much of the day-to-day work to achieve implementation will stop, they intend to continue moving forward with other planned procurements (i.e., EQRO, member ombudsman, Healthy Opportunity Pilots RFP, and Tailored Plan RFA). However, these procurements are all contingent on the implementation of managed care so it is hard to say how much time and effort vendors and providers may be willing and able to commit given this new level of uncertainty.

Given NCDHHS’s commitment to managed care, leadership encouraged providers to stay the course and continue engaging in contracting and developing the partnerships necessary for managed care.

But at a time when the Department is backing down and removing resources from this effort, how can providers, stakeholders, and vendors continue to sustain such investments? Many providers have made significant investments in preparation for managed care and without the influx of new funding, they are finding themselves at a financial cliff. The ramifications go beyond the organizational level impacting clinicians and staff working within these entities, many of whom have jobs contingent on transformation. The potential for job loss is very real for these people.

For patients, this uncertainty can be significant. Just last week, the NCDHHS mailed over 200,000 notices to Medicaid beneficiaries that they needed to select a prepaid health plan. And in the coming weeks, they will then receive notices advising that they do not need to take any action. Instead, they will continue to receive benefits as they do today.

While less than 10 percent of the eligible population has actively selected a plan since open enrollment began in July, there are still tens of thousands of beneficiaries who made the choices they did with the expectation of having access to certain providers and benefits. In some cases, the PHPs offer benefits beyond what is available in fee-for-service Medicaid. Some Medicaid beneficiaries may have made decisions about coverage based on that additional coverage that now they will not have. Further, when the next open enrollment happens, Medicaid beneficiaries are less likely to take action, not trusting that this time it is real. That further decreases beneficiary active engagement.

Finally, Medicaid beneficiaries and their representatives or advocates need to be careful that they do not confuse notices of no action required for open enrollment with notices of renewal of eligibility or other actions that they may be required to take in order to keep their existing benefits.

To undertake the kind of systemic change that North Carolina Medicaid has embarked on for more than five years takes trust and commitment among all stakeholders. That trust and commitment are eroding because the General Assembly and the Administration are unwilling to compromise. This puts the health and wellbeing of almost 2 million Medicaid beneficiaries, 75 percent of whom are children under the age of 18, and the providers who care for them at risk. It is well past time for the parties to come together and find a rational path forward that puts the well-being and health of the North Carolinians they represent first.