Medicaid Officials Tout Effectiveness of New Plan

Raleigh, N.C.

Medicaid Officials Tout Effectiveness of New Plan

David Sinclair
The Southern Pines Pilot
April 3, 2014

The man leading efforts to reform North Carolina’s Medicaid program is going around the state educating community leaders about a plan that would allow hospitals, doctors and clinics to form networks called accountable care organizations.

“This is a good plan,” said Dr. Robin Cummings, who stopped by The Pilot Wednesday to talk about the proposal. “It puts providers first. It’s patient centric. It addresses costs. I have totally bought into it.”

Cummings, a cardiovascular surgeon who lives in Pinehurst, is the deputy secretary of the N.C. Department of Health and Human Services (DHHS). He was tapped to head the Division of Medical Assistance and lead a team to transform Medicaid’s operations.


This proposal, outlined to state legislators earlier this month, calls for setting up so-called accountable care organizations (ACO) and enrolling providers in July 2015.

Cummings said as an example FirstHealth of the Carolinas, along with the Pinehurst Medical Clinic and Pinehurst Surgical could make “the backbone of an ACO that could hit the ground running.”

State health officials say it avoids a battle with health care providers over the future of the $13.5 billion government health insurance program that covers about 1.8 million poor children and their parents, elderly people and disabled people in North Carolina.

McCrory has made changing Medicaid a priority. The federal government pays about about two-thirds of the program’s cost, but expenses have been difficult to predict in recent years, forcing the state to scramble to shift money to fill Medicaid budget holes.

Medicaid is about $3.5 billion of the state’s $20.6 billion budget.

Under ACOs, doctors and hospitals treating Medicaid beneficiaries would band together to treat patients more efficiently, which state officials think will lower costs and improve patient health. And, in a first for the state, these ACOs would share in any savings or losses with the state and federal government.

Cummings said the ACOs would agree to health quality measures for patients and to spending limits. If they spend less than projected, the organizations would keep some of the money they save. If ACOs spend more than budgeted, the organizations would have to cover some of the costs.

“Here is what we will judge you on,” Cummings said of the measures. “If you don’t meet them, you do not share the savings. It is that black and white.”

The state’s goal is to have 90 percent of state Medicaid beneficiaries in ACOs in five years.

The state would spend $987 million less on Medicaid over five years than it would without the changes, according to estimates in the report to legislators. The state would save $326.3 million over five years, the report says.

The state legislature and federal government must approve the new plan. Currently, doctors and hospitals bill Medicaid for individual services.

North Carolina’s Medicaid program is the nation’s 10th largest. The average Medicaid enrollment at any one time is 1.8 million. Total expenditures in 2013 were $13 billion, roughly double the amount 10 years ago, according to the report.

The reform plan consists of three components. The first is the delivery of physical health care, which consists of preventive, acute and therapeutic care. The second component covers services for mental health, substance abuse and intellectual and developmental disabilities.

The third is long-term services and supports, which is composed of services for individuals with functional limitations and chronic illnesses who need assistance with routine daily activities, though not including those with primarily intellectual and developmental disabilities.

Cummings said a “fairly sophisticated process” would be used to evaluate the patient population to determine what it costs “to take care of these patients.” After the first year, the state will review the actual costs.

“We have got to come to a number on the budget,” Cummings said.

Cummings said North Carolina will not have to reinvent the wheel on this approach. He said eight other states are using it.

“We plan to look at these states and look at the lessons they have learned,” he said.

He added that Community Care of North Carolina (CCNC), a nonprofit organization that operates North Carolina Medicaid’s primary care case management program through 14 regional networks — including one based in Moore County that serves seven counties — also has a proven track record.

Dr. L. Allen Dobson Jr., president of Community Care of North Carolina (CCNC), said in a previous story in The Pilot that he thinks this is a “better approach” because it moves the delivery of care down to the provider level.

Dobson said CCNC plans to work with the McCrory administration and legislature to find a solution.

Cummings said the state simply cannot continue to afford the $500 million budget overruns for Medicaid.

“We’ve got to be creative,” he said. “We have got to cut costs or at the least make it more predictable.

Cummings said he hopes to generate public support for the proposal in hopes that will help persuade legislators give it their blessing. He said there will no doubt be pressure from lobbyists for various health care providers when the General Assembly convene in May.

“If everyone starts going off in their own direction, we’re dead,” he said. “The DHHS secretary has put this plan out. If you blow it up, and we end up with managed care, it is on you.

“We are moving in the right direction. We have got to get down to the nuts and bolts of caring for human beings.”