North Carolina’s Medicaid program needs a lot of help, but how best to reform the system is still being debated. As the Senate welcomes both provider-led organizations and private managed care companies to take on full financial risk for providing and coordinating holistic medical care to all North Carolina Medicaid patients, the House advocates for providers and hospital systems (aka The House of Medicine) to play the role of both medical provider and insurance company for about 90 percent of medical assistance enrollees. Those who qualify for Medicare and Medicaid — the state’s most expensive patients — are excluded from their reform plan.

This morning, the House Health Committee explained in more depth on how these provider-led entities (PLEs) would operate:

  • North Carolina’s Department of Health and Human Services (DHHS) would contract with multiple PLEs. In return, each PLE would be responsible for delivering, coordinating, and managing physical health needs for a minimum 30,000 Medicaid patients under a fixed payment.
  • Payments to each PLE will adjust for its Medicaid pool’s health status.
  • A governance board will oversee PLE networks to ensure that defined quality metrics are met, such as patient satisfaction and improved outcomes.
  • PLEs will have to abide by a medical loss ratio where 90 percent of their budgeted Medicaid spend shall be devoted to patient care, with the remaining amounts covering administrative needs.
  • Complete reform is scheduled to phase in over a five year period.

Stay tuned for more information later this afternoon.