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What New NC Medicaid Overhaul Means For Budgeting, Mental Health


The McCrory administration wants doctors and hospitals to play a much larger role in managing the state's Medicaid program. The administration submitted its new Medicaid overhaul to the General Assembly Monday.

One of the McCrory administration's goals is figure out a way for the state's Medicaid program to save taxpayer money, or at least stay on budget. Large cost overruns have become an annual problem in North Carolina.

The new plan asks groups of doctors and hospitals to take on more responsibility for the cost of care in their areas, and in return, share in any savings or losses with the state.

Mardy Peal is a senior advisor to the North Carolina Secretary of Health and Human Services. She said the state will figure out whether the groups, called accountable care organizations or ACOs, save or lose money based on budget targets the state sets.

"If there are particular regions where epidemiologically, let's say there's a greater risk of diabetes, the budget that develops under that ACO may be greater than in another part of the state where diabetes is not as prevalent," she said.

So the budget targets will factor in how Medicaid patients in Charlotte may be different from patients in Wilmington. And as the accountable care organizations get more experience serving them, they'd share in bigger chunks of the savings as long as they hit quality benchmarks, too. They'd also share in bigger chunks of the losses.

That's how it would work on the physical health side of the Medicaid program. On the mental health side, there'll still be a separate system that the accountable care organizations don't manage. But the plan does try to create a way for those separate systems to work together. 

Courtney Cantrell is the state's acting director of the mental health side of the system.

"Both sides have committed to integrating and to working better together, but you don't get that fully until you can get some incentives on each side for it and really have there be a payoff for each side," she said.

So Cantrell said the state's plan includes financial incentives for the accountable care organizations and the mental health organizations to actually coordinate care. 

Exactly how that'll work still needs to be ironed out. The McCrory administration is aiming for state lawmakers to take up the Medicaid overhaul in May.