North Carolina Medicaid Reform
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1 North Carolina Medicaid Reform Sandy Terrell Director, Clinical Policy Health and Human Services
2 NC Health Care History c.1952 Good Health Act 1965 Medicare & Medicaid c.1972 Office of Rural Health 1877 State Board of Health
3 NC Health Care History c.1952 Today Good Health Act 1965 Medicare & Medicaid c.1972 Office of Rural Health 1877 State Board of Health ACA & Medicaid Reform
4 Health Care Costs vs. Outcomes The US spends 17 cents of every U.S. dollar on health care yet significant challenges remain to overcome Fewer physicians per person Lower number of hospital beds Lower life expectancy at birth On the bright side, the US leads the world in health care research and cancer treatment, for instance
5 US Medicaid Spend NC s growth rate of 4.8% is in line with the national average * Figures are from 2010 as reported by the MacArthur Foundation s State Health Care Spending on Medicaid published in July 2014.
6 National Medicaid Priorities Medicaid programs driving broad-based quality improvement in health care system Close to 3 out of 4 states are currently studying, planning, or implementing 4 or more reforms Every state Medicaid program is engaged in some kind of reform effort Episodic Payment ACOs Health Homes Managed Care Initiatives Long Term Services & Supports Behavioral Health Integration Super-utilizers Initiatives Number of Payment & Delivery System Reforms undertaken by Medicaid Program 5 or more initiatives, 40% 1 Initiative, 11% 2 Initiatives, 4% 4 Initiatives, 33% 3 Initiatives, 11% NAMD State Medicaid Operations Survey: Third Annual Survey of Medicaid Directors, November 2014
7 NC Medicaid Funding Sources North Carolina 10 th largest Medicaid program in the U.S. Covers more than 1.8 million North Carolinians Approx. $14 billion in expenditures $3.6B $1.4B $8.8B Provider payments are the most significant part of the budget: 92% Federal match rate: 66% Federal State Other Other includes drug rebates (approx. $630M), bed taxes, fraud recoveries and cost settlements
8 A Snapshot of North Carolina Medicaid 1971 today 256K Beneficiaries 1.8M 10K Providers 90K $307M Budget $13.8B
9 Food for Thought Major NC Insurer NC Medicaid 3.8M Beneficiaries 1.8M $5B 48.6M Value of Claims Paid Claims Processed $10.3B 200M
10 Medicaid Reimbursement Services are reimbursed at the Federal Medical Assistance Percentage (FMAP) rate Average state FMAP is 57% (can range from 50% to 82% based on per capita income) Usually paid through the MMIS system Providers must registered as a Medicaid provider and have a Medicaid provider number NY PA OH NC SC WV 50.00% 51.82% 62.64% 65.88% 70.64% 71.35% Source: Kaiser Family Foundation
11 NC Medicaid Enrollees & Expenditures 100% 90% 80% 70% Adults Adults Children Small portion of beneficiaries are responsible for a disproportionate share of costs 60% 50% 40% 30% Children Aged, Blind & Disabled 62% 20% 10% 0% Aged, Blind & Disabled Duals Medicare & Medicaid BENEFICIARIES 28% Duals Medicare & Medicaid COSTS Source: CCNC Informatics Center
12 Medicaid Spend Medicaid spending is concentrated on the elderly and disabled Small segment of population, yet More complex health care needs, and More costly acute and long-term care services Elderly and disabled costs range from $8,000 in Alabama to $26,000 in New York Elderly and Disabled Parents and Children North Carolina $13,366 $2,989 Ohio $18,080 $2,352 Texas $12,985 $3,058 Arizona $15,945 $4,108 Georgia $9,472 $2,109 Figures are from 2010 as reported by the MacArthur Foundation s State Health Care Spending on Medicaid published July 2014 via PCG
13 Medicaid Budget Predictability
14 Medicaid Budget Predictability 2 nd consecutive fiscal year with cash on hand
15 Better Care. Smarter Spending. Healthier People. Paying Providers for Value, Not Volume. W hether you happen to be a patient, a provider, a business, a health plan or a taxpayer, it s in our common interest to build a health care delivery system that s better, smarter and healthier a system that delivers better care; a system that spends health care dollars more wisely; and a system that makes our communities healthier. - Sylvia M. Burwell The New England Journal of Medicine January 26, 2015
16 Why Reform Medicaid? Better value for North Carolina taxpayers Strengthen Medicaid fiscally Flatten cost growth trend Make budget more predictable Improve beneficiaries health outcomes Address population-wide needs Consider whole person in coordinating care Reward quality explicitly
17 Medicaid Reform: From Volume to Value TODAY Fee-for-service: Rewards volume & intensity Beneficiary selects a PCP or one is chosen in ZIP code Providers fragmented CCNC coordinates primary care and case management VALUE Capitated managed care: Rewards value & quality Beneficiary selects a PCP, is assigned to that PCP s MCO/PLE Providers linked in organized systems of care MCOs/PLEs may contract with CCNC for care management
18 MCOs and PLEs MANAGED CARE ORGANIZATION Insurer governs Statewide service area PROVIDER-LED ENTITY Provider system governs Regional service area for provider system
19 Medicaid Reform Key Features FEATURE Oversight Coverage Timeline Health Plans Capitation REFORM New DHHS Division of Health Benefits, including rate setting Excludes dual eligible beneficiaries Excludes dental LME/MCOs continue under existing waivers 3-4 years Up to 10 PLEs in 6 regions Up to 3 statewide MCOs Full capitation
20 Where We are Today
21 Continue to LISTEN Next Steps March 1, 2016: Report Medicaid reform plans and progress to new Joint Legislative Oversight Committee June 1, 2016: Submit waivers to Centers for Medicare & Medicaid Services 18 months after CMS approval: Capitation begins 12 months after capitation begins: Transition to Division of Health Benefits completed
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