North Carolina Receives 1115 Waiver Approval, a Major Milestone for Medicaid and NC Health Care System


North Carolina today received federal approval to implement the transition to Medicaid managed care and integrate physical health, behavioral health and pharmacy benefits. Receiving approval from the Centers for Medicare & Medicaid Services (CMS) of the amended 1115 Demonstration Waiver application submitted by the North Carolina Department of Health and Human Services in 2017 is a major milestone in implementing North Carolina’s Medicaid Transformation and in moving the state’s health care system toward further integration and coordination.
“Our highest priority is the health and well-being of the people we serve,” said DHHS Secretary Mandy Cohen, M.D. “Receiving this waiver approval from the federal government will help us continue to build an innovative and whole-person centered system that addresses both medical and non-medical drivers of health.”
This transition toward whole person care includes the authority to create Tailored Plans to serve people with intellectual/developmental disabilities (I/DD) or higher intensity behavioral health needs and a specialized behavioral health home model to ensure strong care management for those individuals. To support broader state efforts to combat the opioid crisis and improve access to treatment, DHHS received authority to implement new flexibilities that allow for treatment of substance use disorder in institutions of mental disease (IMD).
The approved waiver also gives North Carolina federal authority to implement through its managed care plans an innovative Healthy Opportunities pilot program to improve health and reduce health care costs. These pilots will identify the most cost-effective ways for managed care plans to deliver whole person care and ensure that Medicaid dollars are purchasing value.
In 2015, the General Assembly directed the transition of Medicaid from a predominantly fee-for-service structure to managed care. Since then, DHHS has solicited extensive feedback from clinicians, beneficiaries, hospitals, counties, health plans, elected officials, advocates and other stakeholders in developing the components of the 1115 Waiver Demonstration. The approved waiver focuses only on the aspects of North Carolina’s Medicaid managed care transformation that require CMS approval.
Documents for the 1115 waiver, including a fact sheet of key components, the original and amended waiver applications, a copy of the approval letter from CMS and other related transformation information, may be found on the NC Medicaid transformation website at