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Providers key in NC’s push to launch delayed Medicaid plans for complex populations

Kody Kinsley, secretary of N.C. DHHS, left, with Jay Ludlam, the department’s deputy secretary of Medicaid, and Adam Levinson, CFO of health benefits, during a meeting of the Joint Legislative Oversight Committee on Medicaid on Feb. 6, 2024.
NC Health News
Kody Kinsley, secretary of N.C. DHHS, left, with Jay Ludlam, the department’s deputy secretary of Medicaid, and Adam Levinson, CFO of health benefits, during a meeting of the Joint Legislative Oversight Committee on Medicaid on Feb. 6, 2024.

By Jaymie Baxley | North Carolina Health News

After multiple delays, the North Carolina Department of Health and Human Services says it’s “on track” to implement specialized Medicaid plans this summer that are designed for beneficiaries with complex needs.

Now scheduled to launch on July 1, the so-called “tailored plans” are expected to cover about 150,000 existing Medicaid participants who require more extensive care and support than typical enrollees. Many people with intellectual or developmental disabilities, traumatic brain injuries, complex psychiatric disorders and substance use disorders will be moved to the plans, according to DHHS.

Unlike standard Medicaid plans, the tailored plans will be administered by a network of four state-funded behavioral health organizations, or LME-MCOs. For the past decade, these regional managed care organizations have been providing access to behavioral health services for people with complex needs across the state, sometimes operating under a cloud of controversy.

Now, they have been tasked with connecting tailored plan participants to physical and mental health care providers.

The tailored plans were initially scheduled to go live in December 2022, but DHHS delayed the launch to give the LME-MCOs more time to prepare. Additional delays were announced last year, with the department citing a lack of buy-in among some providers.

Jay Ludlam, the state’s deputy secretary for Medicaid, gave lawmakers an update on the plans’ status as part of Tuesday’s meeting of the Joint Legislative Oversight Committee on Medicaid. The LME-MCOs, he said, have “made significant progress in closing any remaining gaps in their networks.”

Push for more providers 

Ludlam told the committee that DHHS established an internal “disruption standard” after the most recent delay. The department’s goal was to ensure that at least 80 percent of tailored plan participants would “not be disrupted in their current relationships” with providers.

“Our focus has been on those families that […] have worked with certain care teams for years, often since birth, to provide care to their loved ones,” Ludlam said. “We also saw pressures from others who wanted, as much as possible, to ensure that we as a department recognize that it's not only just the provision of services, [but] also who's providing those services … that is important to those families.”

He said that federal regulators were OK with the 80% goal last spring, but they want at least 90% of the state’s tailored plan participants to have the option of staying with their current provider in order for the plans to launch this July.

That rankled committee member Sen. Ralph Hise (R-Spruce Pine), even though he’s long been critical of the LME-MCOs.

Hise said he was concerned that the higher standard required by the Centers for Medicare and Medicaid Services would force the LME-MCOs to “sign contracts that might not be in the best interest of their system.” Some providers, he said, were already dissatisfied with the reimbursement rates that the LME-MCOs were offering for services.

“Then CMS kind of steps in and says, ‘First of all, you have to have 80 [percent] and now you have to have 90 [percent],’ and suddenly these contracts are getting signed,” Hise said. “I mean, somebody stuck their nose in a contract dispute, told them who they had to sign with and, in effect, what rates they had to sign for.”

Ludlam responded by pointing out that the issues with provider contracting “are sometimes not about money.”

“They're about how many lives the tailored plans were managing, and that it wasn't sufficient for the systems to basically bother to pick up the pen and sign those contracts,” he said. “By focusing on what the members need, and of course monitoring the potential impact on rates, I do believe that we will not only protect people through this process, but that we will be able to get to go live on July 1.”

One factor in creating a Medicaid plan is the quest for “network adequacy” — the ability for a patient to find the care they want and need close to home. This means the plans’ managers have to contract with hundreds, sometimes thousands of health care providers throughout a region.

Ludlam noted that two of the state’s LME-MCOs recently contracted with a “large system” to accept tailored plans. Ludlam declined to share the system’s name, but Charlotte-based Atrium Health had previously been identified as a significant holdout in the state’s push to enlist providers. A spokesperson for Atrium did not immediately respond to email from NC Health News on Wednesday.

Ludlam said DHHS has not “re-measured” the potential disruption of existing patient-provider relationships since the unnamed system came aboard.

“If I were to highlight any potential risk to go live, it is whether or not the tailored plans will be able to close out some of those other contracts that are going to be necessary to minimize the disruption for consumers and members,” Ludlam said.

He added that DHHS will make a “go or no-go decision” in April on the July 1 rollout date if the LME-MCOs have not contracted enough providers to satisfy CMS’ requirement by then.

“If we really saw a high risk of potential member harm for individuals, we would do what is necessary to protect people,” Ludlam said of the possibility of another delay. “We would want to work very closely with CMS to make sure that if they're declaring that we're unable to go live, that they're doing it based on the best available data and for all the right reasons.”

Rollout riding on LME-MCOs

Ludlam said the burden of contracting enough providers to maintain continuity of care for tailored plan patients will largely fall on the LME-MCOs. They know the “individuals who might be at risk” and “where they are,” he said.

“The work is going to be on them,” he said. “I think generally they are very close to getting contracts with these care teams, and we will continue to monitor it over the next couple of months.”

The implementation of tailored plans will follow a consolidation that left the state with four LME-MCOs instead of its previous six. Sec. Kody Kinsley, head of DHHS, ordered the consolidation in November to streamline the plans’ rollout.

Trillium Health Resources took control of Eastpointe Human Services under the consolidation, creating a single organization to serve 46 counties across eastern North Carolina. Another LME-MCO, the Sandhills Center, was dissolved in connection with the consolidation.

The remaining organizations include Vaya Health, which serves most of the western part of the state, and Alliance Health and Partners Health Management, which together cover a mosaic of counties in central North Carolina.

Ludlam said his “Day One goals” for tailored plans are to “make sure that members have cards in hand, that the health plans have sufficient networks, that providers can get paid and that members can have access to those health plans in order to understand their benefit, understand who they've been assigned to and make sure that they can get care.”

This article first appeared on North Carolina Health News and is republished here under a Creative Commons license.

North Carolina Health News is an independent, non-partisan, not-for-profit, statewide news organization dedicated to covering all things health care in North Carolina. Visit NCHN at

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