Featured in Health Business Daily, Nov. 14, 2017

Insurers Form Pacts, Set Stage For NC Medicaid Transformation

Reprinted from MEDICARE ADVANTAGE NEWS, biweekly news and business strategies about Medicare Advantage plans, product design, marketing, enrollment, market expansions, CMS audits, and countless federal initiatives in MA and Medicaid managed care. Subscribe today!

By Lauren Flynn Kelly, Managing Editor
May 25, 2017Volume 23Issue 10

Far in advance of an RFP for three statewide managed care contracts, insurers are already laying the groundwork for a major overhaul of North Carolina’s Medicaid program. As the state anticipates transitioning its 1.9 million Medicaid enrollees from a fee-for-service delivery model to managed care as early as mid-2019, Amerigroup and Blue Cross and Blue Shield of North Carolina have just embarked on the latest in a string of collaborations among managed care and other organizations to serve low-income enrollees in North Carolina.

The North Carolina General Assembly in September 2015 passed a law calling for the state to enter into capitated Prepaid Health Plan (PHP) contracts to cover all Medicaid and NC Health Choice services, including physical health services, prescription drugs and long-term services and supports. Those would also cover behavioral health services for NC Health Choice recipients unless they are already provided by the established local management entities/managed care organizations, which will be excluded from the capitated contracts until four years after PHP implementation.

The law calls for the Dept. of Health and Human Services (DHHS) to award three statewide contracts to “commercial” MCOs; the state would also form capitated contracts with regional “provider-led” entities that meet certain criteria. DHHS in June 2016 submitted a Section 1115 demonstration waiver application to CMS. Following federal approvals and the procurement of PHP contracts, MCOs are anticipated to begin serving enrollees on July 1, 2019. In the meantime, new DHHS Sec. Mandy Cohen, M.D., has been hosting public input sessions on the proposed changes during a month-long comment period that ended May 25.

Medicare Advantage News

Reform Includes Capitated Duals Contracts

A section of the law also called for DHHS to develop a strategy to serve Medicare-Medicaid dual eligibles through capitated PHP contracts. That process is still ongoing, but DHHS and an advisory committee in a January 2017 joint report to the Joint Legislative Oversight Committee on Medicaid and NC Health Choice made several recommendations on the development of the duals initiative, including that the state allow the PHP program serving non-duals to operate for approximately two years before launching any program involving the integration of Medicaid capitated contracts with Medicare Advantage plans.

“North Carolina is the last big state to not have converted to managed care at least for its TANF [Temporary Assistance for Needy Families] population, and a lot of companies now see Medicaid managed care as an important business opportunity, so this is now on a considerable number of companies’ targets,” observes Bob Atlas, president of the EBG Advisors consulting unit of health care law firm Epstein, Becker & Green, who has advised the state on its Medicaid transformation. “And the way things are taking shape, the competition is really building for the statewide contracts.”

Centene Corp., for one, in January unveiled a partnership with the North Carolina Community Health Center Association and the North Carolina Medical Society to establish a joint venture that would create, organize and operate a physician-led health plan to provide Medicaid managed care services in the state. And Atlas says there is at least one other plan that is being formed by 11 hospital systems and intends to be a statewide commercial plan, “even though on the face of it, it looks like they’re provider-led.” And other national players are likely keeping an eye on this, he says.

Meanwhile, Blue Cross and Blue Shield of North Carolina and Anthem, Inc. unit Amerigroup Partnership Plan, LLC on May 17 said they’d begun collaborating on the reform effort with the intention of bidding together to serve the PHP program. While both companies will retain their existing brands and ownership, how the partnership may evolve over time — including how risk and revenue will be shared if they win a contract — and health plan naming in the North Carolina Medicaid market are yet to be determined, according to Brad Wilson, president and CEO of Blue Cross and Blue Shield of North Carolina. At this point, the partners are “collaborating by sharing expertise to design and build solutions that would best serve the North Carolina Medicaid program and its participants,” Wilson tells AIS Health.

Amerigroup Louisiana in December 2016 formed a similar partnership with Blue Cross and Blue Shield of Louisiana to serve Louisiana’s Medicaid, Medicaid expansion and LaCHIP programs.

As the largest health insurer in its state, Blue Cross and Blue Shield of North Carolina serves more than 3.74 million individuals, including approximately 1 million served on behalf of other Blues plans, and has more provider partnerships than any other MCO in the state. Amerigroup, meanwhile, serves 6.5 million Medicaid members across 20 states.

Brian Shipp, Amerigroup South Region Medicaid president, says the partnership combines the Blues plan’s “strong local presence, community-based expertise and established local relationships” with “Amerigroup’s national Medicaid expertise and unique insight on addressing diverse and evolving needs of Medicaid beneficiaries.” By working together, the two companies can connect stakeholders to social services agencies, community advocates and local experts to “create solutions and offer tools that help close care gaps and make measurable impacts” on members’ health, asserts Shipp.

Atlas calls the combination a “logical partnership,” given that “Amerigroup has a big track record in Medicaid and they both have Blues connections.”

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