On November 20, 2017, North Carolina submitted an amended 1115 waiver application to the Centers for Medicare & Medicaid Services (CMS) seeking authority to invest $1.2 billion over five years in a range of targeted initiatives that, taken together with a transition from fee-for-service to managed care, advance the State’s goals to improve health, maximize high-value care to ensure sustainability and increase access to care. The transition to Medicaid managed care was mandated by the North Carolina Legislature in 2015,1 and in June 2016, the State submitted its original waiver application outlining the State’s goals and requested flexibility. Based on continued engagement with stakeholders, North Carolina’s updated $1.2 billion amended application aims to accelerate the achievement of a high-performing managed care program through a set of focused initiatives described below.

Improving Health and Maximizing High-Value Care

North Carolina seeks waiver authority and federal matching funds to implement the following initiatives aimed at addressing enrollees’ behavioral health and substance use disorder needs, as well as those related to the social determinants of health:

  • Tailored Plans for Enrollees with Complex Needs. North Carolina plans to offer “standard plans” with integrated physical health, behavioral health and pharmacy services to most Medicaid enrollees. However, the State is also developing tailored plans for enrollees with complex needs. For example, a specialized plan for children in foster care will be a single product for children in county-operated foster care, children in adoptive placements and former foster youth who aged out of care, up to age 26. This plan must meet requirements ensuring robust care management and medication management specifically for this vulnerable population, as well as enhanced behavioral health services. Pending State legislative authorization, the State also wishes to launch behavioral health intellectual/developmental disability tailored plans (BH I/DD TPs) to provide integrated physical health, behavioral health, I/DD, traumatic brain injury (TBI) and pharmacy services (beyond benefits available in the standard plans) to enrollees with serious mental illness, serious emotional disturbance, substance use disorder, I/DD and/or TBI needs.
    • BH I/DD TPs will offer robust, whole-person care management services tailored to their enrollees’ unique needs. North Carolina is seeking expenditure authority to help BH I/DD TPs and other agencies build capacity to implement this care management model.
  • Institutions of Mental Disease. Like a host of other states, North Carolina seeks an “Institutions of Mental Disease (IMD) waiver” to permit Medicaid payment for some services delivered to Medicaid beneficiaries in IMDs. North Carolina would limit these payments to individuals receiving acute care for behavioral health or those receiving substance use disorder treatment at or above American Society of Addiction Medicine (ASAM) level 3.1.
  • Evidence-Based Public-Private Regional Pilots. North Carolina proposes establishing public-private regional pilots in two-to-four areas of the State to provide Medicaid enrollees with information, services and benefits targeted to measurably improve health and lower costs. The pilots would provide evidence-based interventions to address needs in housing, transportation, food and interpersonal safety, and toxic stress. Each pilot, comprising multiple collaborating entities, would be required to identify its region, participants, specific target populations, objectives and interventions based on State-defined parameters. They would also be required to meet data collection, measurement and reporting requirements to document progress toward objective outcomes. Ultimately, the State’s goal is to test, strengthen and sustain successful pilots by incorporating them into the Medicaid managed care program.

Increasing Access to Care

North Carolina describes a number of initiatives designed to increase enrollees’ access to care:

  • Strengthening Provider Supports. North Carolina proposes developing a suite of incentive programs, including loan repayment and recruitment bonuses, targeted to address critical Medicaid provider shortages, such as OB/GYNs; psychiatrists; and physical, occupational and speech therapists.
  • Supporting Telemedicine. The State aims to establish a “Telemedicine Innovation Fund” to support provider-health plan collaborations that test evidence-based telemedicine initiatives aligned with the State’s quality strategy goals, such as chronic disease management and wellness promotion. The State will also support the establishment of an independent, statewide telemedicine alliance to administer and evaluate the Telemedicine Innovation Fund, among other educational and training activities.
  • Tribal Uncompensated Care Pool. If approved, North Carolina’s Tribal Uncompensated Care Pool would provide payments to the Cherokee Indian Hospital Authority to offset the Authority’s uncompensated care costs for services provided directly by or referred through the Authority.
  • Cost-Settling Essential Safety Net Providers. North Carolina requests authority to continue cost-settling certain public providers—including local public health departments, public ambulance providers, and state-owned or -operated skilled nursing facilities—with wraparound payments to cover the difference between health plan reimbursement and providers’ costs.
  • Carolina Cares. North Carolina seeks to require premium payments and work requirements as part of the Medicaid expansion “Carolina Cares” program, which is currently pending before the State Legislature. According to the proposed legislation, enrollees with incomes greater than 50% of the federal poverty level, with some exceptions, would be required to pay monthly premiums of 2% of income. Failure to pay within 60 days of the deadline would lead to disenrollment. Re-enrollment would be permitted only after back-due premiums were repaid. Additionally, most enrollees would be required to be employed or engaged in activities to promote employment.

The waiver initiatives described above complement a range of other activities being developed that do not require waiver authority but are key to the State’s goals, such as implementation of primary-care-focused “Advanced Medical Homes” and ongoing provider training through “Regional Provider Support Centers.” These and other program features are described in the State’s “Proposed Program Design for Medicaid Managed Care.”

North Carolina is aiming for a mid-February approval from CMS to begin launching managed care in July 2019. The federal public comment period will be open through January 5, 2018.