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Is NC Medicaid Broken Or Award-Winning?

Kaiser Commission on Medicaid and the Uninsured

Governor Pat McCrory's administration is still working on an overhaul of one of North Carolina's most important – and expensive – health programs.

Medicaid serves about one and a half million low-income or disabled North Carolinians. And it costs the state roughly $36 million a day. McCrory has said the program is broken and inefficient, often pointing to an audit that found North Carolina is horrible at managing costs and budgeting.

So you may be surprised to hear that a big part of the state's current program is saving money and recently won a national award. WFAE's Michael Tomsic reports on that part of the program, and why some Medicaid researchers and advocates for the poor are worried about the overhaul. 

April 3 was a weird day for the state's Medicaid program.

That morning, Republican Governor Pat McCrory rolled out a plan to overhaul it, saying the current model does not work and is not sustainable.

Also that day, a major part of the current model won a national award for high-quality care and cost effectiveness – and North Carolina's Republican U.S. senator helped present the award.

"It's not that we're all-consumed with cost," Burr said in a video commemorating the award. "It's that we understand that if we have the optimal outcome, then the cost takes care of itself."

Community Care Of North Carolina

The award was for Community Care of North Carolina. Community Care is a public-private partnership that coordinates services for about 80 percent of the state's Medicaid population.

There are problems in the North Carolina Medicaid program, and we'll get to those in a minute. But a handful of states are making their programs more like North Carolina's because of Community Care. Oklahoma and Connecticut, for example, recently adopted parts of the Community Care model. 

To understand how it works, we're going to meet someone who sits in a cubicle and someone who works out of an SUV.

Checking In With Patients From A Cubicle

Credit Michael Tomsic
Johanna Wilson sits in her cubicle at Elizabeth Family Medicine in Charlotte.

"We are at Elizabeth Family Medicine, and I sit in a hallway in a little cubicle with the doctors' offices behind me," Johanna Wilson said. She's a nurse care manager for Community Care in Mecklenburg County. Her job is to follow up with Medicaid patients, often after hospital or doctor visits.

"When they come home from the hospital, their greatest chance of readmission is within 30 days," Wilson said. "And that's usually because they haven't gotten the medications that the doctor prescribed or they don't understand their medications."

Wilson picks up the phone and makes sure patients have what they need.

"Have you got just a second more for me to go through your medicine list and make sure you got everything you're supposed to have?" she asked a patient over the phone. "OK. Have you got your ADVAIR? That's that purple one."

The patient Wilson is talking to takes more than 16 medications. Wilson realizes the patient is missing several, so she thinks Community Care needs to send someone to the patient's house to help.

Driving To Patients In An SUV

Now it's time to meet the nurse working out of her SUV. Her name is Larri Diggs-Jones.

Credit Michael Tomsic
Larri Diggs-Jones drives her SUV to visit a patient.

"I would say about 90 percent of my role is doing what I'm doing now, which is traveling to visit patients who have Medicaid and just making sure they have all the resources they need to take care of themselves and education provided to them to prevent re-hospitalizations," Diggs-Jones said while driving toward a patient's house on the outskirts of Monroe.

The patient, Kerry Dill, was in the hospital a week or so before. Dill said her air conditioning went out and she couldn't afford to get it fixed, and then the heat made her health conditions worse.

"The doctor kind of explained it to me like the asthma, the bronchitis, the COPD, he said it all kind of ganged up on me at one time," Dill said.

So Diggs-Jones said she'll get a social worker out here to help with the air conditioning. Next, they go through Dill's medications.

"Now, do you know why you're taking all your medicine?" Diggs-Jones asked.

"Yes, I do," Dill said.

"What is this Levothyroxine for?" Diggs-Jones asked.

"That's for my thyroid," Dill said.

"All right, good," Diggs-Jones replied, and then they went to the next drug.

Dill is on oxygen and needs a walker to get around. She said she needs a shower chair and was thrilled to hear Community Care may be able to help with that, too.

Boots On The Ground

Diggs-Jones in her SUV and Wilson in her cubicle are what Community Care refers to as boots on the ground – nurses in the community who know the available resources and, more importantly, know their patients.

Community Care CEO Dr. Allen Dobson said the work they do is essential.

"For every six home visits we make for high-need patients coming out of the hospital, we avoid one hospitalization," Dr. Dobson said. "We're trying to keep people healthier and make sure they get the right care. And the byproduct of that good care is saving the state money."

Studies by Community Care and outside researchers back up those claims. For example, the state audit this year that ripped the Medicaid program reported Community Care saved about $50 million last year. Problem is, the state budgeted for it to save $90 million.

Problems With The Current Program

The head of the Medicaid program, Carol Steckel, likes what Community Care does. But she says the other parts of the program are disjointed.

"I've had people tell me they've had clients of theirs leave a mental illness counseling session to go to a substance abuse counseling session and then also have to go to their doctor," Steckel said.

Steckel wants to overhaul the program so those services are under the same umbrella. Community Care says it can pull that off under the current model. But Steckel and the McCrory administration decided to switch to a new model with a different payment system. 

"We have to start being able to predict and sustain the program," she said.

Fee-For-Service Vs. Risk-Based Models

In the current model, Community Care and the providers in its networks get a small fee for coordinating care. Other than that, payments happen on the back end, after providers bill Medicaid for services. It's called a fee-for-service model.

If the overhaul goes through, the payment would shift to the front end. The state would give a few massive organizations the Medicaid money up front, and they'd be on the hook if they go over budget. It's called a risk-based model, because the organizations take on the risk.

About 40 states now use that model for at least part of their Medicaid programs, but very few use it for the whole thing like Steckel wants to do.   

Jonathan Ingram of the conservative Foundation for Government Accountability says cost is a huge factor driving states toward that model "because it really provides not only stability but predictability."

"You know year after year how much you're going to pay," he said. "The only real flux is how many people come into the system and how many people leave."

Different Models, Different Incentives

Whereas the incentive in the fee-for-service model is to over-treat, the incentive in the risk-based model is to cut services. That’s what some advocates say is already happening in the mental health and disability part of North Carolina's Medicaid program, which recently switched to the risk-based model.

And some advocates and researchers say the program could lose boots on the ground like Diggs-Jones and Wilson. Dr. Darren DeWalt of the UNC School of Medicine says that might work in a risk-based model, but it hasn't happened in other states. 

"They have risk-based managed care, but they don't have networks of practices working together on the local level to improve care delivery," Dr. DeWalt said.

But Carol Steckel, the Medicaid director, said she's confident North Carolina could pull that off because of the groundwork Community Care has laid.

The McCrory administration is still ironing out the details of the overhaul. The legislature has asked for the final plan by mid-March.