McCrory Announces Changes to NC Medicaid: “The Good, The Bad, and the Ugly”

Governor McCrory held a press conference this morning on North Carolina Medicaid Reform. Good? Bad? Or ugly?

For a full rundown of his comments, please click here.

In essence, Gov. McCrory admitted that the current Managed Care Organization (MCO) situation is not working. Holy cow!! Finally!

Secretary Aldona Wos stated, “We have a system that doesn’t meet the needs of the patient, that doesn’t meet the needs of the taxpayer.” Oh, holy WOW-ness!! (I’m doing the Snoopy dance in my head).

Gov. McCrory stated that, by 2015, three or four MCOs will be the private entities in charge of Medicaid for NC.  Right now we have 11 MCOs.  Hmmmm…so here we have a huge change….Good? Or Bad? Well, one thing to say for it, it’s a change. Anything has to be better than our current situation, right?  Let’s analyze:


The map above depicts the current MCO jurisdictions. So, in the next year and a half, which MCOs will close?

My guess? The smallest MCOs.

Regardless, what did McCrory propose this morning? And is this a fix?

  • Today Gov. McCrory stated that by 2015 only 3-4 MCOs will be in existence.

Good? Bad? Or Ugly?  It depends. Will those 3-4 MCOs act like the current 11 MCOs? Will the Division of Medical Assistance (DMA) be able to supervise these private MCOs? Obviously the answers to those questions determine the answer.

  • Today Gov. McCrory stated that the MCOs would be state-wide.

Good? Bad? Or ugly? Good!!!!  YES! YES! YES! What does that mean? That means (from how I understand this proposal) is that if a Medicaid recipient does not want to deal with East Carolina Behavioral Health (ECBH) (I am only using ECBH as an example), then the recipient could choose to use another MCO.  Whereas, currently, the Medicaid recipient is forced to use the MCO that’s jurisdiction covers the county in which the recipient resides.

I must say, statewide MCOs could be a really good thing. If, and only if, (1) the MCOs are supervised (it does not behoove NC to contract with a few MCOs, which end up putting their own profits ahead of the NC Medicaid recipients); (2) (in my humble opinion) the MCOs are not compensated by the amount NOT spent on Medicaid services (there needs to be an incentive to COVER recipients’ services, not to DENY the services); and (3) if there is some sort of consistency among the 3-4 MCOs (we don’t want Medicaid recipients to have to “shop” MCOs to find services; there should be a statewide consistency).

So, was today a step forward in Medicaid reform? I think so. But there are potential dangers that could make today’s reformation (for lack of better words) NOT good.  If we move forward thoughtfully and understanding of possible downfalls, these new changes could result in positive outcomes in North Carolina Medicaid.

One (of many) of my concerns? What happens to the health care providers that go bankrupt because of the MCOs between now and 2015?


About kemanuel

Medicare and Medicaid Regulatory Compliance Litigator

Posted on April 3, 2013, in Division of Medical Assistance, Health Care Providers and Services, MCO, Medicaid, Medicaid Reform, Mental Health, NC DHHS and tagged , , , , , , , , , . Bookmark the permalink. 4 Comments.

  1. It is my understanding that the Governor and Secretary Wos are not referring to the mental health MCOs which we now recently have when they refer to the “three-ish” medicaid organizations management orgs they hope to have operating in our state soon. These organizations can, if they so choose, contract with one of these LME/MCOs to provide MH/DD/SA service arrangements and quality management. (If this is the case, I hope these three companies do a thorough job of investigating the outcomes of these agencies’ efforts before contracting with them.

    Anyway, I write this to clarify that this discussion goes beyond our mental health mismanagement and strives to integrate all of health care (medicaid) while integrating many of the siloed and inefficient processes we have historically had.

    As a consumer advocate and as the director of the North Carolina Consumer Advocacy, Networking, and Support Organization, I hail all of this as good news! I know our board has been very concerned about the lack of service quality, the frequent disregard for the consumer voice in system developments, and the need for health care and mental health care to be integrated and not segregated.

  2. Interesting, Laurie. So for my own clarification, is it your understanding that the 3-ish organizations will be for all Medicaid services, not just mental health?

  3. That is my understanding as well. That these 3 Comprehensive Care Entities will be the single portals of entry for ALL Medicaid services (primary care, behavioral health).

    • Thanks! I appreciate the input. So every single Medicaid service provider will be going through the same issues as the behavioral health providers are enduring with the MCOs. I can predict some opposition.

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