As expected, NC Medicaid managed care won’t begin on time

RALEIGH, N.C. (AP) — North Carolina’s Medicaid program won’t shift to managed-care benefits as scheduled early next year, the largest casualty to date of the monthslong budget stalemate between Democratic Gov. Roy Cooper and Republican lawmakers.

Although the Department of Health and Human Services’ Tuesday announcement about the rollout suspension was anticipated, the indefinite delay still represents a significant failure for both the legislative and executive branches.

Each side quickly blamed the other for the postponement, which will waste state dollars used to prepare for the shift, which is supposed to save taxpayer money.

Legislators and the Cooper administration hadn’t been able to reach an agreement on final spending and program changes to get services started Feb. 1 for about 1.6 million of the state’s 2.2 million Medicaid recipients. DHHS Secretary Mandy Cohen had said a deal was needed by mid-November. Legislators adjourned for the year last week.

“We just can’t go ahead and move on in the face of uncertainty,” Cohen told The Associated Press in an interview, adding that no new start date will be set now. “We’ll wait for the legislature to come back in January and see where we go.”

The impasse largely centered around Cooper’s efforts to expand Medicaid to hundreds of thousands of low-income residents through the 2010 federal health care law. Although managed care can occur without expansion, Cooper has attempted to connect the two. Legislative Republicans largely oppose the expansion sought by Cooper.

The governor has vetoed two bills containing the necessary managed-care language. One is the larger two-year budget approved by GOP lawmakers that he vetoed in June. The other, focused on managed care only, was vetoed in August. Cooper said in his August veto message that health care needed to be addressed "comprehensively."

But the governor and Cohen also have criticized Republicans for proposed cuts to Medicaid as part of the transition and for passing a budget that moved the department headquarters out of Wake County.

“They have been causing seeds of confusion about what’s happening with health care in North Carolina,” Cooper told reporters Monday. Cooper spokeswoman Megan Thorpe said in a news release Tuesday that “Republican legislators were irresponsible to end the session without moving health care forward.”

The GOP-controlled General Assembly began the Medicaid “transformation” process with a 2015 law, and Cooper’s DHHS had been working since he took office to implement these changes. The department awarded contracts, worth about $6 billion annually for up to five years, to five health care entities that will serve Medicaid recipients.

Medicaid is supposed to move from a traditional fee-for-service model to one in which four private insurers — Blue Cross and Blue Shield of North Carolina and UnitedHealthcare among them — and a physicians' partnership will receive fixed monthly payments for every patient seen. Health officials say the changes should lead to improved health outcomes and more fiscal stability for Medicaid, which spends about $4 billion in state tax dollars annually. The federal government pays an additional $12 billion.

Republicans have accused Cooper of blocking managed care simply to stick it to the GOP in their budget fight.

“North Carolina has invested millions of dollars and years of bipartisan planning to create a better system of managed care, yet unfortunately the governor has placed more emphasis on politics than improving the quality of care for existing Medicaid participants,” GOP Rep. Donny Lambeth of Forsyth County said in a release.

Republican Sen. Joyce Krawiec, also from Forsyth County, warned in a news release that Cooper’s veto of the stand-alone bill “will force insurers to lay off thousands of people they’ve already hired” for the switch. Asked about Krawiec’s number, Pat Ryan, a spokesman for Senate leader Phil Berger, wrote in an email that one company alone hired 400 people to handle Medicaid transformation.

Cohen wouldn’t comment on specifics about employment losses except that no DHHS employees will lose their jobs. Krawiec “is correct there are consequences to their actions,” Cohen told the AP.

Cohen said Medicaid consumers will continue to receive health services through the traditional plan and will be alerted to the managed-care delay. The DHHS contracts with the five health plans will remain in place, DHHS spokeswoman Chris Mackey said.