STATE NEWS (NC) – Officials give update on tailored Medicaid plans

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[MM Curator Summary]: Expect another delay.



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Jay Ludlam, deputy secretary of Medicaid for N.C. DHHS, speaks at the Hilton Raleigh North Hills hotel on June 14, 2023. Credit: Jaymie Baxley/NC Health News

North Carolina’s Medicaid program “transformed” in the summer of 2021, moving more than a million children, some of their parents and pregnant women off of the long-standing way of paying for every test, visit and hospital stay and moving them into managed care, where private insurance companies receive a set monthly fee for each patient and then set about keeping them healthy.

But some groups of Medicaid beneficiaries remained in the traditional fee-for-service system: people with intellectual or developmental disabilities, people with substance use disorders and traumatic brain injuries, low-income seniors living in nursing homes and many people with severe mental health issues.

During a conference for health care professionals in Raleigh earlier this month, officials from the N.C. Department of Health and Human Services gave an update on the twice-delayed launch of an experimental managed care program for Medicaid enrollees with complex needs.

The program will create specialized health plans tailored to those complex beneficiaries.  The tailored plans are expected to provide “enhanced behavioral health services” that are not available through standard plans, according to the N.C. Medicaid ombudsman’s office

DHHS originally hoped to move eligible enrollees to tailored plans in December, but a lack of buy-in by service providers forced the agency to postpone. The launch was delayed to April before being pushed back again to Oct. 1, the current planned rollout date.

Jay Ludlam, deputy secretary for N.C. Medicaid, addressed the delays during a June 14 symposium organized by the i2i Center for Integrative Health. He said as many as 7,000 beneficiaries would have been forced to find new primary care providers — and in some cases, entirely new health care teams — had the state not extended its timeline. 

“That was really disconcerting to us at the department,” Ludlam said. “Imagine an individual with intellectual developmental disabilities, who has seen the same care team for the whole 10 years of her life, now needing to establish new relationships and assemble a new care team.”

He added: “That felt wrong. That felt like that was not what we were trying to design.”


Kristen Dubay, left, and Loul Alvarez of DHHS give a presentation on tailored plans for Medicaid enrollees. Credit: Jaymie Baxley/NC Health News

Still, Ludlam acknowledged that DHHS “waited too long” before announcing the most recent delay in February, which “left only about 35 days for members to readjust their plans” ahead of the then-anticipated April launch. 

Enrollees will receive more notice this time around, he said, with the state set to make a “go-or-no-go decision” on the October rollout by mid-July.

Another delay?

About 150,000 people, or 5 percent of the state’s Medicaid participants, are expected to transition to tailored plans. These people also are some of the most expensive patients, who have complicated — often multiple — diagnoses, and who need a lot of support. 

Their care will be coordinated by one of six behavioral health organizations that serve different regions of the state: was


Map showing the regions served by the different behavioral health organizations. Credit: NC Medicaid

The organizations are meant to act as intermediaries to connect eligible enrollees with health care providers who will be reimbursed through tailored-plan contracts. Some providers have been reluctant to accept this arrangement, making it difficult for the organizations, all of which serve multiple counties, to ensure that eligible beneficiaries have access to care where they live. 

Federal law requires that Medicaid beneficiaries have networks that are adequate to address their needs, but that doesn’t always happen.

Ludlam said a review of statewide data at the beginning of the year found that a large number of tailored-plan enrollees would be forced to “drive 100 miles each way” from their homes to receive care. The situation has improved in recent months, he said, but one major provider has yet to sign on.

“There are continued gaps in contracting,” Ludlam said. “We are seeing that it’s primarily around one system that is not contracting, and I’m not going to mention them by name. We are trying to encourage them to engage in that contracting. I think that that’s really important.”

DHHS declined to say if the launch would be delayed again if the holdout system did not contract with the regional organizations.

“The Department will always push for what is best for the people of North Carolina and will continue to work to improve access and strengthen the services available to them,” the agency said in a statement to NC Health News on June 20. “We are currently evaluating Tailored Plan network readiness and remain focused on providing the best care possible for the nearly 150,000 people that will benefit.”

In February, The News & Observer of Raleigh reported that the organizations were having difficulty contracting with Atrium Health. A spokesperson for the Charlotte-based system told the newspaper that Atrium needed time to “validate the plans are prepared for their responsibilities to fully and adequately serve the needs of their constituents.” 

The spokesperson added that the state, in its first delay of implementing the tailored plans, had “concluded there are numerable challenges in the submission, processing and payment of claims — which has been a historical challenge with these plans,” according to The N&O.

A new model

The stage was set for tailored plans when the state switched Medicaid systems.

North Carolina had for decades paid providers directly for Medicaid-covered services, paying separately for every test, doctor visit and hospital stay. That changed after the state transitioned to a managed care model, which essentially privatized Medicaid by routing payments through a cadre of insurance companies, in 2021.

Ludlam said the changeover — mandated by the General Assembly in 2015 — was driven by Mandy Cohen, the former DHHS secretary who was recently tapped by the Biden administration to serve as director of the Centers for Disease Control and Prevention.

“Secretary Cohen really challenged us to develop a model of whole-person care that focused on buying health,” he said. “Buying health requires that we think about preventative health and emergent health, but also social determinants of health. It requires us to also think about a whole person, and how we integrate those different treatments or different interventions to support the health of members and develop that program.”

While managed care is not unique to North Carolina, the state’s system differs from conventional models by including tailored plans for Medicaid beneficiaries with complex needs. 

At the Raleigh symposium, Shannon Dowler, chief medical officer for N.C. Medicaid, said the model born from Cohen’s vision has “not been done anywhere else in the country.” She believes the state will receive “national attention as the data starts coming in and we see the outcomes and the impact on our members.”




Not everyone is convinced of the effectiveness of the tailored-plan approach. Some health care advocates worry that the plans will create more barriers to care for individuals who already have limited options. 

“The big fear is, will a very, very vulnerable population — people with profound disabilities — lose access to care that they really need?” Doug Sea, an attorney with the Charlotte Center for Legal Advocacy, asked in a September 2022 interview with NC Health News. “The fact is that the General Assembly set this up in a way that directly discriminates against people on the basis of these profound disabilities.”

Barring any further delays, the implementation of tailored plans could coincide with a transformative moment for the state’s Medicaid program. 


Shannon Dowler, chief medical officer for N.C. Medicaid, speaks during a symposium organized by the i2i Center for Integrative Health. Credit: Jaymie Baxley/NC Health News

Legislation passed in March made North Carolina the 40th state to expand access to Medicaid. The expansion, which will not officially take effect until a state budget is approved, will provide coverage to about 600,000 people who currently lack health insurance. 

At the same time, an estimated 300,000 existing beneficiaries are expected to lose coverage through the unwinding of a federal mandate that prevented states from kicking people off the rolls during the COVID-19 pandemic. DHHS has confirmed that many of these individuals will become eligible for Medicaid again under expansion.






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