Hospital Group Fights Rejection Of Medicaid Management Contract

Mar 1, 2019

Credit Jason deBruyn / WUNC

The consortium of hospitals that was denied a contract to manage Medicaid beneficiaries has appealed its rejection. The appeal will be considered by North Carolina Department of Health and Human Services Secretary Mandy Cohen.

My Health by Health Providers is a consortium of the state's 12 largest health systems. It filed a proposal to serve as one of the managed care organizations that will receive taxpayer money from DHHS to pay medical claims. This replaces the model of taxpayers paying healthcare providers directly. DHHS approved four statewide contracts to commercial insurers and one regional contract, but denied the My Health application.

In 2015, the North Carolina General Assembly passed a law that moves Medicaid from a fee for service structured system to managed care. These prepaid health plans will get a fixed amount of money from the state and use that money to pay Medicaid claims. If they get more from the state than they pay out in claims, that difference becomes profit for the managed care groups.

State leaders wanted to move toward this kind of a model to reduce costs and improve budget projection accuracy. Opponents of this model say it and funnels state dollars to large corporations and that the groups may deny needed medical claims in order to keep profits for themselves.

My Health is a provider led entity, which means it is made up of health care providers – hospitals in this case – and not health insurers. My Health CEO Lisa Farrell argues this is a better model because she says it allows for innovative payment models that cut down on overall cost.

"Providers have long been asked to come to the table and accept value based payment and take accountability for populations, for quality outcomes, for experience. And in our model, our twelve North Carolina health system owners did just that," said Farrell.

Approved plans include:

  • AmeriHealth Caritas North Carolina, Inc.
  • Blue Cross and Blue Shield of North Carolina
  • UnitedHealthcare of North Carolina, Inc.
  • WellCare of North Carolina, Inc.
  • Carolina Complete Health (regional provider led entity)

If Cohen rejects the My Health appeal, the group has said it will appeal to the North Carolina Office of Administrative Hearings.

North Carolina Medicaid managed care regions.
Credit N.C. Department of Health and Human Services