Medicaid Recipients With Disabilities May Lose Doctor

People who use Medicaid and have severe mental illness, substance use disorders or developmental disabilities soon might have to switch doctors if their health care providers don’t sign on with new managed care plans.  

These providers include many of the state’s large health systems, major hospitals and their physicians’ offices. They have been slow to sign on to Medicaid managed care networks that the state calls “tailored plans.” These plans are supposed to cover both the physical and mental health needs of people with behavioral health or cognitive disorders.  

If their doctors don’t join these new managed care networks, patients could soon be forced to change doctors or pay out of pocket.   

About 2.9 million people in the state use Medicaid as their health insurance. Of those, 1.8 million people are enrolled what the state calls “standard plans.” Roughly 200,000 are expected to be covered under the new tailored plans.

The state has already delayed the launch of tailored plans once, pushing the date from Dec. 1, 2022 to April 1.  

Earlier this month, Dave Richard, deputy director of Medicaid at the NC Department of Health and Human Services, acknowledged in a brief interview that health systems are concerned about signing on to the regional mental health offices’ managed care plans.  

The health systems include hospitals, doctors’ offices and other practices. “We need them to be a part of it,” Richard said. “We don’t want to disrupt any of the relationships that individual members have with their physicians.”

Under federal law, tailored plans are required to ensure that 95% of people enrolled have medical care close by.

Six regional offices, formally called Local Management Entity/Managed Care Organizations, operate the tailored plans. The offices use Medicaid money and state and local funds to hire companies that provide care for people with mental illnesses, substance use disorders, or intellectual or developmental disabilities.  

Contract negotiations turned out to be harder than anyone thought, Richard said, but he expected more hospital systems to sign on this month. In early February, ECU Health reached an agreement with Trillium Health Resources, a regional office that serves residents of eastern and southeastern counties.

“Frankly, it’s just a lot of work and trying to get through all of that is harder than I think we all imagined,” Richard said.

Health systems have been reluctant to sign on for several reasons, NC Healthcare Association spokeswoman Cynthia Charles said in an email earlier this month. One is a foundational question: whether it’s a good idea to have tailored insurance plans for people with severe mental illnesses and developmental disabilities separate from standard plans for almost everyone else. 

“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,” she wrote.

Snags in a new state payment system

In July 2021, the state changed the way it paid for health services for most people who use Medicaid. Rather than pay for every doctor’s visit or procedure, the state switched to managed care. Under that system, insurance companies are paid a set fee per person.  

Four insurance companies offer managed care plans for people enrolled in Medicaid, and another group, a partnership between the NC Medical Society and a health insurance company, covers 41 counties.

Charles, spokeswoman for the NC Healthcare Association, a group that represents hospitals and health systems, said it supported managed care and the move to comprehensive care for behavioral health patients.

But treating people using Medicaid who are not enrolled in managed care plans requires less administrative work. Hospitals and health systems are already worried that they aren’t being paid properly under the standard plans, she wrote. Insurance companies deny about 20% of hospitals’ claims, Charles wrote.

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