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Medicaid transformation initiative remains on pace for July 1 launch

Medicaid transformation initiative remains on pace for July 1 launch


Dave Richard, the state's deputy secretary for Medicaid, said that “we’re on target, we’re on schedule and our commitment to you is that we’re going to do everything possible" to go live with the managed care plans.

The ambitious Medicaid transformation initiative remains on track for a July 1 debut, state health officials told legislators Tuesday.

Dave Richard, the state's deputy secretary for Medicaid, said that “we’re on target, we’re on schedule and our commitment to you is that we’re going to do everything possible" to go live with the managed care plans.

At stake with Medicaid transformation: three-year prepaid health plan contracts for four insurers that are projected to be worth $6 billion a year starting with the 2021-22 fiscal year which begins July 1.

With two optional one-year extensions, a contract could be worth a total of $30 billion — among the largest vendor contracts awarded in state history.

The state Department of Health and Human Services announced in February 2019 that the four PHPs are Centene (operating as WellCare of N.C.), AmeriHealth Caritas N.C., Blue Cross and Blue Shield of N.C. (operating as Healthy Blue) and UnitedHealth Group.

The next rollout steps are an online tool launching Jan. 25 that lists providers and the four PHPs, and insurers submitting their tailored plans by Feb. 2.

Statewide enrollment is projected to begin March 15 and end May 14. There is a 90-day "change period" that allows beneficiaries to switch PHPs. 

Richard said the transformation is designed to insure that Medicaid recipients will continue to see the same medical provider if available through the PHP, and that providers will get paid.

"There's nothing more fundamental to getting this right than to having that kind of commitment," Richard told legislators. "This is Job 1 when we go live.

"If we implement this transformation this way, we will be the best in the country."


Richard said the COVID-19 pandemic has affected the transformation rollout, particularly with medical providers who are strained in handling surge after surge in cases and hospitalizations.

"When we decided to start again with transformation we were in the middle of a pandemic." Richard said.

"There was a lot of hope at that time that we would be out of the pandemic by July 1, but our communities are still struggling with this and we're using all staff to assist, including the Medicaid staff.

"We're pleased with the progress we're making and we're going to get to where we need," Richard said. "We need everyone to pay attention, particularly to contracting."

Richard cautioned legislators that DHHS and the state Medicaid program will require additional assistance with the rollout during the 2021 session.

"I don't want to scare you, but there will be something legislative ... that will be important to get done this year," Richard said. "How we do hospital assessment will be important."

Richard stressed the 2021-22 state budget must include funding for implementation to sustain the initiative once operational.

"The department has made good progress and has made the commitment to implement the transformation on July 1," said Rep. Donny Lambeth, R-Forsyth, and co-chairman of the joint health-care oversight committee.

"We will keep the pressure on to keep us on schedule. With the General Assembly back in session, we will be closely monitoring results and assuring we are on schedule and to push the implementation across the finish line."

Sen. Joyce Krawiec, R-Forsyth, and co-chairwoman of the committee, said that "after several delays, Medicaid transformation will finally become reality."

"I look forward to seeing improvements to access and the quality of care for our Medicaid beneficiaries."


The state Medicaid program currently serves 2.31 million North Carolinians, or 22% of the state’s population.

That number is projected to increase to 2.39 million by mid-2021, in part as more individuals lose employer-sponsored health coverage along with their jobs as a ripple effect of the COVID-19 pandemic.

Five years' worth of often-controversial public health and legislative debate culminated July 3 when Democratic Gov. Roy Cooper signed Republican-sponsored legislation that provided pivotal start-up funds.

Transformation was supposed to debut initially on Feb. 1, 2020, in the Triad and Triangle, and then statewide on June 1, 2020, before being postponed in November 2019 by state health Secretary Dr. Mandy Cohen.

The transition to PHPs is expected to cover between 1.6 million and 1.8 million North Carolina participants.

A key selling point for transformation is focusing on a patient's overall health for those experiencing mental health, substance abuse and developmental disability issues.

Managed care is a system under which people agree to see only certain doctors or go to certain hospitals, as in a health maintenance organization, or HMO, or a preferred provider organization, or PPO, health-insurance plan.

Under the current Medicaid system, providers are paid on a fee-for-service model administered by DHHS.

By contrast, the PHPs will pay health-care providers a set amount per month for each patient’s costs. There will be a limited number of special-needs individuals who will remain with fee-for-service providers.

DHHS will reimburse the PHPs, and people will be able to choose which PHP they want to sign up for, or a provider will be assigned to them by May 14.



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