MCOs (NC)- Study: Medicaid transition still facing problems

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[MM Curator Summary]: Punchline- the challenges are par for the course according to researchers, and the switch actually went really well for the majority of Medicaid members.


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When North Carolina swapped its Medicaid system from a program run by the state to a program run and managed by five insurance companies, researchers at the Urban Institute — a D.C.-based think tank — took note. Among other policies, the organization’s researchers took a look at how transitions to Medicaid managed care impact patients nationwide.

In October, they released a report on North Carolina’s transition so far. They found that the initial transition didn’t lead to disruptions in primary care for most people. Nonetheless, the change still came with plenty of problems: providers didn’t enroll with all of the managed care plans because of the added administrative burden, patients were confused about what exactly the transition meant for them, and some people even ended up with big bills after mistakenly going to out-of-network providers. 


“What we found in North Carolina is pretty consistent with experiences in other states that have a transition to Medicaid managed care,” said Urban Institute researcher Eva Allen. “Any changes tend to bring some sort of amount of confusion and challenges for providers and for patients.”

For their analysis, Allen and her colleagues interviewed state Medicaid officials, staff from the insurance plans, provider groups, and advocates and conducted focus groups with Medicaid patients. 

The program’s main success is that, according to the report, about 97 percent of people who were auto-enrolled in a plan were able to keep seeing the same primary care provider after the switch to managed care. Officials attributed that success to an algorithm that used previous Medicaid claims to put patients in a plan that their current doctors had joined.  

Things didn’t go as smoothly afterward. 

Communication issues

Even though the majority of people who were automatically enrolled in a plan were able to keep seeing their primary care doctor, there were still other reasons people might need to switch plans: to keep seeing certain specialists, to make sure all their kids were on the same plan, etc. NC Health News has previously reported that some Medicaid patients who tried to navigate this process said it was excessively complicated and they struggled to find help. 

Also, once patients were put on a plan, a care manager from the managed care organization was supposed to reach out to them. But none of the participants in the researchers’ focus groups reported receiving any such communication. 

Part of the care management process is supposed to include screening for other unmet needs, such as housing or food. 

“Though screening for unmet social needs is reportedly a priority for the state and among plans,” the researchers wrote, “little information was available in spring 2022 about the extent to which and how screenings are being conducted or whether plans and providers are using NCCARE360, an online platform, to connect members to resources.” 

The state Department of Health and Human Services said that all of the managed care organizations “are expected” to screen patients for unmet social needs and offer care coordination, but there aren’t standardized rules that determine how the managed care companies do so.

There’s another part of the state’s Medicaid transformation — the Healthy Opportunities Pilot — which is tasked with addressing unmet needs for some Medicaid patients in a handful of rural counties. The administration of that program is different, but it has seen similar problems with the referral process, as NC Health News has previously reported

More like private insurance than Medicaid 

Participants also noted all the ways in which the new system looks and acts much more like private insurance, rather than Medicaid. In the old system, there was no such thing as in-network and out-of-network providers — doctors either took Medicaid, or they didn’t. Also, providers never had to submit requests for prior authorization for certain services, and patients knew which of their medications would be covered at the pharmacy.

After the switch, that all got more complicated. Some patients reported having to pay high costs at the pharmacy for medication they’d been on for years, and others said they had to wait for care that they’d received before without issue because the insurance company hadn’t yet told their doctor if they could do it and get paid for it. 


All those changes also contributed to providers’ hesitation to enroll with all the plans. Whereas before, they had one plan to work with — the state Medicaid system — now providers had six. Providers anticipated higher administrative costs and burdens, and many chose to only enroll with some of the plans, all issues NC Health News has previously covered. Some of their fears felt founded, as many had to wait weeks to receive payment due to paperwork issues. 

Needing to bill six systems instead of one is an issue that providers repeatedly bemoan. DHHS said it anticipated this problem and that the managed care companies have created a committee “made up of providers and plans who focus on reducing the administrative burdens on providers when working with so many plans.”

The administrative burden is something that almost always arises during the transition to managed care. “Unfortunately,” Allen said, “I am really not aware of any good examples of other states where the state was able to figure out how to make this a better system. It is inherently challenging.”

Incorrectly switching from Medicaid direct to managed care plans

While all of those issues added up to significant burdens for patients and providers, one of the largest single issues the researchers document is how around 7,500 people with significant mental health needs moved onto managed care plans, even though they shouldn’t have. These people were supposed to stay on the state-run Medicaid program until tailored plans aimed at people with significant behavioral health issues roll out (now slated for April 2023). 

Once those people moved onto the managed care plans, they lost many of the services they needed and the state had to switch them back. What confused researchers and advocates was why these patients were even offered the option to switch when it meant losing access to the care they needed. 

“It’s puzzling to me that the state provided this as an option when it was not in the best interest of the beneficiary,” Allen said. 

Medicaid patients in general have questioned who this new system benefits. In the focus groups “some participants reported that with health plans they have a new worry that services they or their children need will be denied. 

“Some wondered why the state decided to implement a more complex system when Medicaid Direct was working well in their experience,” the researchers wrote.

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Study finds Medicaid managed care transition still impacted by poor communication, patient confusion and administrative burden

by Clarissa Donnelly-DeRoven, North Carolina Health News
December 7, 2022