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Companies Lose $3-5 Million/Month Waiting for Medicaid Transition

Things have gotten complicated for the medical insurance providers who signed up to cover North Carolina’s Medicaid population under the new managed care system.

North Carolina was scheduled to transition to managed care in November of last year, but the funding for the program is tied up in the budget vetoed in August by Gov. Cooper. For now, the companies that signed up to manage the state’s Medicaid population have been put on hold, and it‘s costing them millions. As Julie Havlak wrote in Carolina Journal this week:

More than a thousand jobs and a massive reform are at stake now that the budget stalemate has thrown Medicaid transformation into chaos. Managed care companies hired about 1,200 people to manage the health care of 1.6 million Medicaid patients, but each company is now losing $3 million to $5 million each month funding remains delayed, says Taylor Griffin, N.C. Association of Health Plans policy consultant. 

Havlak reports companies are less than thrilled about the delays. Havlak wrote:

[H]ealth care providers complain they are having to eat the costs of reforms, says Chip Baggett, lobbyist for N.C. Medical Society, which will partner with Centene to form a managed care company.

“Small, large, all across the state they’ve made that investment,” Baggett said. “You do all this work, you’re ready to go take care of your patients in this new, innovative, what should be a more cost-effective way — and then you get the rug yanked out from under you.”

Gov. Cooper has made it clear that he will not sign a budget that does not include Medicaid expansion, but the way DHHS has handled the separate issue of Medicaid transformation has many skeptical of the agency’s ability to handle any expansion, which would add roughly 500,000 people to the program. Havlak quotes Sen. Joyce Krawiec, R-Forsyth:

“If our DHHS can’t handle Medicaid transformation, how in the world are they going to handle Medicaid expansion, adding 600,000 new people into the system? This needs to be done first, to provide better outcomes and better services for our beneficiaries. And now here we are in the middle of a mess.”

Read the full article here. Learn more about Medicaid expansion here.

Brenee Goforth / Marketing and Communications Associate

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