Can it be?! Is it true?! NC General Assembly Passing Law to Supervise the MCOs? And Giving Counties a Choice of MCOs?

Am I living in some alternate universe?

Surely, I have misread or misunderstood Session Law 2013-85!

Surprise

I cannot believe my eyes.  Even more so, I cannot believe the General Assembly could possibly make a good law regarding the Managed Care Organizations (MCOs). 

To all lawmakers, I am truly sorry for my obvious and apparent cynicism.  But forgive me, the potential NCGS 108D statutes had not made me hopeful for the future of health care providers.

Session Law 2013-85 (SL 2013-85) was signed by Gov. McCrory  on June 12, 2013 (last Wednesday).  SL 2013-85 is entitled, “An Act to Ensure Effective Statewide Operation of the 1915 (b)/(c) Medicaid Waiver.”  Its status is “completed legislative action.”

SL 2013-85 requires:

1.  The Secretary to certify whether the MCOs are in compliance with certain requirements and must be made every 6 months.

Can we say…is it possible…dare we say….DMA must supervise the MCOs?

According to SL 2013-85, the Secretary’s certification evaluations will be every 6 months beginning August 1, 2013.  Not sure whether that means the first evaluation will be on August 1, 2013, or whether the 6 month period begins to run August 1, 2013, meaning the first evaluation would be January 1, 2013.

2. The Secretary’s evaluation will be based on an internal and external assessment made by an independent external review agency.

Hmmmm….this is starting to sound like an audit…an audit on the MCOs!!!! Can we hire CCME??? (they never find anything good).

So what requirements will the Secretary be determining are or are not in compliance?

I.  MCO has made adequate provision against the risk of insolvency. 

II.  The MCO is making timely provider payments. (Of course, the implementation of this clause, I wager, will be to pay only providers the MCOs determine worthy).

III. The MCO is exchanging billing, payment, and transaction info to the Department.

Ok, so the Secretary will be, or, at least, making an effort to ensure compliance of the MCOs.  That’s better than no supervision, right? And the Session Law shows the intent of lawmakers to begin supervision of MCOs.

Going to county choice of MCOs…

According to SL 2013-85, a county that wishes to disengage with a particular MCO may realign with another MCO with permission by the Secretary.

Counties get to choose MCOs?????????

Right now, the MCOs are jurisdictional and regional.  Here is a map of the MCOs currently.

MCO_map_small

As you can see, across North Carolina each MCO is basically assigned a catchment area.  So, as a health care provider, if you provide mental health services to Medicaid recipients in Pitt County, you must contract with East Carolina Behavioral Health (ECBH) because Pitt county is in the yellow ECBH area.

BUT…..In a system in which counties could choose which MCOs with whom to contract, I wager, that system would create new MCOs….ones that were more “county/health care provider friendly” (i.e., authorizes medically necessary services, does not terminate provider Medicaid contracts without merit, etc.).  Let me explain:

For example:

(People, this is a hypothetical) ECBH, in Pitt County, determines, for whatever reason, that personal care service hours (PCS) cannot exceed 40 hours/week without exceptions (even if a Medicaid recipient requires 24-hour care).  In my hypothetical, in Pitt county, many, many Medicaid recipients get denials from ECBH to receive PCS in excess of 40 hours.  All these recipients complain to the providers.  The providers are losing money because services are not getting authorized.  The providers feel as if their clients are getting a disservice because a medically necessary service is not being provided to the Medicaid recipients.  The providers complain to the county commissioner and other local politicians.  Eventually, Pitt county gets sick of it and determines that Pitt county no longer wants to work with ECBH.  Pitt County requests and receives authorization from Secretary Aldona Wos to realign with MCO Smokey Mountain Center (SMC) (in the west). Unlike, ECBH, SMC is absolutely willing to authorize PCS service in excess of 40 hours/week upon a showing of medical necessity.

So what happens?

ECBH loses a county.  I would guess that if an MCO loses a county that the MCO would receive less Medicaid funding, which would mean potential less profit for the MCO.

SMC gains a county.  I would guess that SMC would receive more Medicaid money with an additional county.

A-HA!

The MCOs, all of a sudden, have a monetary incentive to make the counties happy in their own catchment areas.  Because if too many providers complain and the county switches MCOs, then the MCOs’ potential profit decreases.

Suddenly, customer service becomes, if not important, a factor in the MCOs’ minds. (Minds of the board members).

Suddenly MCOs do not have a monopoly on its catchment area.  If choice of MCOs exist for the counties, then counties have more persuasion with the MCOs.

Why is this so important?

Let me give a very simplistic hypothetical:

I live in Wake County.  Because I live in Wake county and, in my hypothetical, Wake county has a contract with Harris Teeter as the Wake county grocery store, and only Harris Teeter.  In my hypothetical, I am only allowed to get my food at Harris Teeter.  HT knows that it has Wake county’s business no matter what. To increase profits, HT begins to put 4 lbs of potatoes in bags, but sells the bags for 5 lb. prices.  Or, instead of throwing away rotten produce, keeping it for sale and requiring the customers to buy the rotten produce first, in order to get the fresh produce.  The customers complain, but HT merely laughs, saying, “We don’t care, Wake county, you can’t choose to go to Kroger anyway.” 

BUT …What if?   What if….Wake county DOES have the authority to determine that Wake county no longer wants to buy from HT, and, instead, can make a contract with Kroger.  Kroger has the incentive to keep prices fair and produce fresh, because Kroger knows that if Kroger does the same practices that HT did, that Wake county will go to Piggly Wiggly.  (Don’t you just love a Piggly Wiggly?)

This is the heart of an argument for competition in the market…capitalism, if you will.

The thought is, generally, that if the MCOs have to compete for business, the MCOs have incentive to provide good services to keep the client-county.

“Capitalism is like a child: if you want the child to grow up free and productive, somebody’s got to look over the shoulder of that child.”  Tavis Smiley.

If, by chance, I have misread SL 2013-85 or, by chance, I am in some alternate universe, and SL 2013-85 is not real, then I just had a great idea. I’m kidding.  I gives kudos to the General Assembly on this one. 

Let’s just hope that it is implemented fairly.

About kemanuel

Medicare and Medicaid Regulatory Compliance Litigator

Posted on June 17, 2013, in Accountability, Aldona Wos, Behavioral health, CCME, DHHS, Division of Medical Assistance, Health Care Providers and Services, Legislation, McCrory, MCO, Medicaid, Medicaid Contracts, Medicaid Funds, Medicaid Recipients, Medicaid Reform, Mental Health, Mental Health Problems, Mental Illness, North Carolina, Termination of Medicaid Contract, Wos and tagged , , , , , , , , , , , , , , , , , , . Bookmark the permalink. 1 Comment.

  1. This is absolutely jaw dropping! It looks like we’ll have fewer MCOS by August 1 2013! The bill does seem to protect providers; which is a welcomed change!

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