Providers fret, insurers hail N.C. move to Medicaid managed care

North Carolina hospitals and doctors say the state's push to institute Medicaid managed care will reduce services for the poor and shortchange providers despite the legislation giving them the opportunity to bid on the contracts.

Late last month, Republican Gov. Pat McCrory signed legislation enabling changes that will move the state's $12.7 billion Medicaid program serving 1.9 million residents from fee-for-service payments made directly to providers to capped payments to managed care insurers. North Carolina must get approval from the CMS before making the change.

The legislation allows the state to award three statewide managed-care contracts to insurance companies. But at the same time, it authorized the creation of as many as 12 regional “provider-led" entities—physicians and hospitals in a Medicaid ACO, for instance—that can sign agreements with the state to manage Medicaid populations within their territories.

“Under the current system, we wait until people get sick to provide care and pay for tests—not outcomes," McCrory said in a statement. "This new system will focus on keeping people healthy and delivering care where it makes the most sense for patients. We're going to accomplish this reform by paying providers based on improving patient's health—not how many services patients receive.”