North Carolina

North Carolina is in the process of overhauling its Medicaid program. The governor and state lawmakers are using a mixture of health care models to put the major players — doctors, hospitals and insurers — all on the hook to keep rising costs in check.

For many of the Republicans who control the state legislature, the reason for the change is simple: budget predictability.

In a consumer breakthrough tied to new ways of organizing health care, UnitedHealthcare will offer many of its Medicare Advantage members in North Carolina lower co-pays when they receive care from primary care providers and most specialists affiliated with Cornerstone Health Care, Eagle Physicians & Associates, Guilford Medical Associates, Novant Health and Triad HealthCare Network.

North Carolina hospitals and doctors say the state's push to institute Medicaid managed care will reduce services for the poor and shortchange providers despite the legislation giving them the opportunity to bid on the contracts.

Late last month, Republican Gov. Pat McCrory signed legislation enabling changes that will move the state's $12.7 billion Medicaid program serving 1.9 million residents from fee-for-service payments made directly to providers to capped payments to managed care insurers. North Carolina must get approval from the CMS before making the change.

Until this year, it was impossible for healthcare consumers in North Carolina to find out the average out-of-pocket cost for medical and surgical procedures.

But in January, Blue Cross and Blue Shield of North Carolina unexpectedly launched an online site that allows the general public to see how much it pays particular providers for certain services. The insurer's move was spurred in part by a state price transparency law. 

A political and philosophical brawl among providers, insurers and policymakers in the Tar Heel State is reaching a possible resolution as North Carolina's Legislature attempts to coalesce around a bill that would overhaul the state's Medicaid program.

Republican Gov. Pat McCrory has made Medicaid reform one of his top priorities since he entered office in 2013. North Carolina's two Republican-led chambers have disagreed sharply over how to accomplish that, but legislators say they are close to nailing down a final, compromising pact.

The North Carolina Hospital Association and the North Carolina Medical Society, hoping to break the deadlock between proponents of a provider-led state Medicaid system and supporters of straight Medicaid managed care, in May unveiled a plan for “provider-led entities,” or PLEs, that would take capitation in the Medicaid program.

Senate leaders have inserted into their budget proposal their quest for reducing, then eliminating, the N.C. Community Care Networks.

Community Care of N.C. is a homegrown, nonprofit series of Medicaid managed-care networks that has significant statewide support among doctors and health care providers, as well as several federal and state lawmakers.

The state Medicaid program covers about 1.9 million North Carolinians and has about a $14 billion annual budget.

In 2008, state legislators and Medicaid administrators asked Community Care of North Carolina (CCNC), initially launched as a managed care program for the state's Medicaid recipients, to expand the system's scope of practice to integrate Medicaid's aged, blind and disabled recipients into its medical home model. Although this group represents only about 30 percent of the N.C. Medicaid population, it generates about 70 percent of the program's health care costs because of the patients' complex chronic conditions and related high hospitalization and readmission rates.