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Medicaid Transformation

Medicaid Transformation

In 2015, the North Carolina General Assembly enacted legislation to authorize a transition to: Medicaid managed care statewide and regional contracts; the creation of the Division of Health Benefits to administer the State Medicaid and NC Health Choice (CHIP) programs; and the dissolution of the Division of Medical Assistance.  The General Assembly has amended the 2015 legislation in each subsequent legislative session to further clarify and appropriate funding for the incremental transition.  Clarifications have included Health Plan licensure and solvency requirements in collaboration with the NC Department of Insurance; Health Plan contract provisions, including Medical Loss Ratios and State authority to implement withholds for value-based payment; managed care enrollment mandatory and exempt beneficiary populations; and covered service carve-outs.  Please see the relevant Session Laws listed chronologically below:

  • Session Law 2015-245 AN ACT TO TRANSFORM AND REORGANIZE NORTH CAROLINA’S MEDICAID AND NC HEALTH CHOICE PROGRAMS
  • Session Law 2016-121 AN ACT TO REQUIRE FURTHER REPORTING FROM THE DEPARTMENT OF HEALTH AND HUMAN SERVICES RELATED TO TRANSFORMATION OF THE MEDICAID AND NC HEALTH CHOICE PROGRAMS AND TO MODIFY CERTAIN PROVISIONS OF THE MEDICAID TRANSFORMATION LEGISLATION
  • Session Law 2017-186 AN ACT TO CONSOLIDATE THE DIVISION OF ADULT CORRECTION AND THE DIVISION OF JUVENILE JUSTICE INTO A SINGLE DIVISION WITHIN THE DEPARTMENT OF PUBLIC SAFETY, AS RECOMMENDED BY THE JOINT LEGISLATIVE OVERSIGHT COMMITTEE ON JUSTICE AND PUBLIC SAFETY AND TO EXEMPT THE FABRICATION OF EYEGLASSES FROM CAPITATED PREPAID HEALTH PLAN CONTRACTS UNDER MEDICAID TRANSFORMATION
  • Session Law  2018-48 AN ACT TO MODIFY THE MEDICAID TRANSFORMATION LEGISLATION
  • Session Law 2018-49 AN ACT TO REQUIRE MEDICAID PREPAID HEALTH PLANS TO OBTAIN A LICENSE FROM THE DEPARTMENT OF INSURANCE AND TO MAKE OTHER CHANGES PERTAINING TO MEDICAID TRANSFORMATION AND THE DEPARTMENT OF INSURANCE
  • Session Law 2019-81  AN ACT TO MODIFY THE LAWS PERTAINING TO MEDICAID AND NC HEALTH CHOICE AS NEEDED FOR THE IMPLEMENTATION OF MEDICAID TRANSFORMATION
  • Session Law 2020-88  AN ACT APPROPRIATING FUNDS FOR THE DOROTHEA DIX CAMPUS RELOCATION PROJECT AND FOR NORTH CAROLINA FAMILIES ACCESSING SERVICES THROUGH TECHNOLOGY (NC FAST); APPROPRIATING CORONAVIRUS RELIEF FUNDS FOR BEHAVIORAL HEALTH AND CRISIS SERVICES, EARLY CHILDHOOD INITIATIVES, AND COVID‑19 TESTING, CONTACT TRACING, AND TRENDS TRACKING AND ANALYSIS; APPROPRIATING FUNDS FOR THE OPERATION OF THE NORTH CAROLINA MEDICAID PROGRAM AND THE IMPLEMENTATION OF MEDICAID TRANSFORMATION; AND MAKING MEDICAID TRANSFORMATION‑RELATED CHANGES.
  • Session Law 2021-61  AN ACT TO REVISE THE HOSPITAL ASSESSMENT ACT TO ACCOUNT FOR MEDICAID TRANSFORMATION.

Medicaid Transformation Legislation has also yielded a road map for distinct managed care plans:

  • Standard Benefit Plans for the majority of Medicaid and NC Health Choice beneficiaries (implemented 7/1/2021);
  • Tailored Plans for high-risk, high need populations including but not limited to I/DD, TBI, SMI, and SED (projected for 7/1/2022 implementation);
  • Tribal Option managed by the Eastern Band of the Cherokee Indians’ Cherokee Indian Hospital Authority for federally recognized Tribal members and Indian Health Service – eligible beneficiaries (implemented 7/1/2021); and
  • Specialized Foster Care Plan (projected for 7/1/2023).

Plans must deliver integrated, whole-person care that coordinates physical and behavioral health services with pharmacy via care management.

CMS approved North Carolina’s 1115 Demonstration Waiver in October of 2018 with effective dates of January 1, 2019 through October 31, 2024.  Medicaid Transformation has also necessitated State Plan Amendments and the procurement of numerous Health Plan and tangential vendor contracts for Transformation planning and implementation.  You can access related RFPs and RFAs here.

North Carolina Providers Council members are committed MH/IDD/SUD providers and stakeholders in this Transformation. Members serve Medicaid beneficiaries and uninsured individuals under a service delivery system of managed behavioral health care through closed network contracts with seven regional, Local Management Entity / Managed Care Organizations (LME/MCOs) that serve all 100 NC counties.  In 2022, the Cardinal Innovations Healthcare LME/MCO will be dissolved and the counties currently in the LME/MCO will be realigned with the remaining six LME/MCOs as shown below:

realignment table

Members will continue to serve beneficiaries through LME/MCO contracts until July 1, 2022, when the LME/MCOs will become Tailored Plans.  Providers may also contract to render behavioral health services with Standard Plan networks to serve beneficiaries with mild-to-moderate BH/SUD service needs.  The North Carolina Providers Council therefore closely monitors all legislation and other documentation related to Medicaid Transformation and continually communicates policy updates to members.  The Providers Council maintains a collaborative relationship with the LME/MCOs, Health Plans, and State Officials, and sponsors opportunities for members to have a dialogue with representatives during standing Committee meetings, at membership leadership forums, and at the annual conference.  Furthermore, some Providers Council Board members are also active members of LME/MCO Boards or Provider Advisory Councils.

Listed below are “Quick Links” for accessing NC DHHS and Division of Health Benefits documentation related to Medicaid Transformation.

North Carolina Medicaid Quick Links

State Resources

Federal Resources