March 1, 2023 – In July 2021, North Carolina changed the way that it pays for health services for most people using Medicaid. Instead of a fee-for-service (FFS) model, they switched to managed care. Under this value-based payment system, insurance companies are paid a set fee per person. 

However, due to this change, those who use Medicaid and have severe mental illness or substance use disorders or developmental disabilities might be required to change doctors soon. That is because there has been a slow transition and not all health care providers have signed contracts to join managed care networks.  

Many of these providers include North Carolina’s large health systems, like hospitals and their physicians’ offices. They have been slow to sign onto Medicaid managed care networks that the state is calling “tailored plans.” These special plans cover both physical and mental health needs of people with behavioral health or cognitive disorders.

If these doctors do not join the managed care networks, patients will either be forced to pay out of pocket or change providers. The state has already delayed the launch of tailored plans once. The launch date was pushed from December 1, 2022, to April 1, 2023. 

Dave Richard, deputy director of Medicaid at the NC Department of Health and Human Services has been facing questions about the issue, stating, “We don’t want to disrupt any of the relationships that individual members have with their physicians.” He also added some commentary around the delayed launch date by acknowledging that it is a lot of work and getting through the paperwork is harder than they imagined.

So, why are providers slow to sign on to the new Medicaid managed care plans? The first is a foundational question on whether it even makes sense to have tailored plans, according to NC Healthcare Association spokeswoman Cynthia Charles.

Charles was quoted earlier this month as saying, “NCHA is growing concerned that the design and implementation of the tailored plans continues to carve-out this vulnerable population and does not really integrate physical and behavioral health in a way that will improve the patient’s health outcomes.”

Another issue is that the state has a new payment system that makes getting paid more difficult and cumbersome for providers.

“Hospitals and health systems understand the importance of serving this Medicaid population and desire to be in-network with as many Medicaid Managed Care plans as possible,” Charles wrote. “There are concerns that the tailored plans do not have the standard processes expected of payers to support providers. NCHA members are concerned about payments not being received from standard plans and the extensive administrative burden when compared to Medicaid direct.”

While negotiations take place, it is important to consider what is at stake – the health and wellbeing of some of the most vulnerable population.