Are all states destined to have managed Medicaid programs, regardless of how their current Medicaid programs are performing. That's a question that should be top of mind as North Carolina intends to apply for a Medicaid waiver that would allow the state to move from a primary-care case management program to a managed Medicaid program.

North Carolina's $13 billion Medicaid program, a public/private medical home model called Community Care of North Carolina, is nationally recognized and saved the state almost $1 billion from 2007 to 2010, according to healthcare consulting firm Milliman (although some dispute those savings). But Gov. Pat McCrory says he wants to implement managed Medicaid in the state to stabilize costs and provide more coordinated care, even though under the current program, Medicaid recipients are assigned to a primary-care provider who directs their healthcare needs. The program currently has an estimated $333 million shortfall, according to the Triangle Business Journal.

Cost-savings are not a given with managed Medicaid and neither are profits for the managed care organizations. And if things are rushed, managed Medicaid could create more problems than it solves. All state officials have to do is look to Kentucky as an example.

Kentucky expanded managed Medicaid statewide in November 2011, and the expanded program has been fraught with problems, such as late payments to healthcare providers and managed care organizations terminating contracts with providers. One of the Medicaid MCOs, Centene's Kentucky Spirit Health Plan, has filed a lawsuit and intends to end its contract with the commonwealth this July a year early because providing services in Kentucky has been a losing proposition for the MCO.

Despite the problems that some states experience with managed Medicaid, more are jumping on the bandwagon. In 2012, Texas expanded its managed Medicaid program into rural areas; now nearly 85 percent of the state's 4.2 million Medicaid beneficiaries are enrolled in managed Medicaid. In addition, Florida is making managed Medicaid mandatory for more Medicaid populations.

If MCOs do enter the North Carolina Medicaid market, they could eventually profit from an expansion of Medicaid eligibility, although McCrory has said North Carolina will not expand. An expansion would extend Medicaid coverage to approximately 650,000 residents who currently have no health insurance, with 500,000 expected to enroll (The Charlotte Observer).

While many healthcare providers oppose McCrory's plan, North Carolina's Medicaid program will likely be reshaped now that the governor has started the ball rolling. The state tried Medicaid MCOs on a very limited basis in the 1990s, mostly in the Charlotte area, but then converted all members to the PCCM program. Now North Carolina could join the 37 other states that use Medicaid MCOs to manage care for recipients. These include Georgia and South Carolina, states that tried MCOS in the 1990s, became disenchanted (partly because of the MCOs then inexperience with the Medicaid population), but now believe the plans offer a more cost-effective way to deliver care. If North Carolina goes that route, healthcare management may not necessarily improve, but costs would be more predictable as the state pays the MCOs a set amount per member.. Or the state could use a combination of the medical home model and Medicaid MCOs. Whatever happens, it appears that one of the country's more successful Medicaid care management systems will undergo significant change.


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