On March 26, the North Carolina Department of Health and Human Services presented more detail on plans to implement Accountable Care Organizations as one of the three major components of its Medicaid reform plan. These ACOs will give hospitals, doctors and other providers a greater hand in creating a successful physical health care system. As evidenced in legislative meetings this week, this plan has sparked a great deal of debate, and we are already hearing many opinions on the ACO concept.
The good news for North Carolina? Through the current operation of public managed care, were already showing that when providers, managers and the state form a collaborative relationship, great things happen.
Two years ago, North Carolina began a statewide expansion of public managed care for mental health, intellectual and developmental disability and substance abuse services. These services are vital to the care and recovery of some of North Carolinas most vulnerable citizens. The legislature decided to expand managed care for these services after seeing the success of a five-county pilot program in the Piedmont (Cardinal Innovations).
Under public managed care, Local Management Entity-Managed Care Organizations are given a set yearly budget for mental health, developmental disability and substance abuse services. A key component to the successful budget management is the formation of high quality provider networks. These provider networks are critical partners in making sure residents in need are directed to the right services. All LME-MCOs also work with local Consumer and Family Advisory Councils to keep up to date on the needs of individual communities. With the assistance of these CFACs they conduct studies of local community needs. Many LME-MCOs also collaborate on training that helps law enforcement officers recognize and manage mental health crises.
By directing consumers to the right services, streamlining administration of dollars, and creating unprecedented levels of collaboration with providers, the states LME-MCOs have already saved the state over $153 million while raising standards of care to ensure that consumers in need receive the right services in the right amount at the right time. Today, the Medicaid budget for mental health, developmental disabilities and substance abuse services remain within the amount allocated by the General Assembly because the dollars are being managed. When savings do occur, they are reinvested into services.
And that is the true benefit of public managed care: When LME-MCOs, the state, providers and consumers work together to create savings, those savings are reinvested into local services, not shareholder profits.
When legislators ordered statewide implementation of public managed care, it was a contentious decision. Some worried that managed care would simply be a way to cut services. Instead, North Carolina is making its public managed care synonymous with high-quality, outcomes-based care that helps individuals manage their needs, and live productive lives. No doubt, there is still much work to be done. One of the major advantages of the DHHS Medicaid Reform plan is that it builds on what N.C. has already created rather than proposing a damaging overhaul that could hurt consumers.
The plan calls for our LME-MCOs to reduce in number and to take the form of a regional model. The governors Medicaid plan requires the number of LME-MCOs to shrink to four. As they continue to consolidate, it will be important to make sure that we remain accountable and available to our local communities and consumers while also keeping the Medicaid budget predictable.
We have a good start on that accountability through recently updated provider monitoring standards. The Department of Health and Human Services, along with the LME-MCOs, wanted a monitoring plan that continues to hold providers accountable for spending the states dollars wisely and achieving outcomes for consumers. Working with providers, new monitoring standards were created that accomplish those goals while substantially reducing paperwork and redundancies.
Finally, there are many efforts currently underway that integrate care for physical and mental health. We know that providers will play a crucial, and expanding, role in care integration. And we know from the Medicaid task forces work that consumers, families and providers are emphasizing stability. We can look to the system improvements in mental health as a positive example of how collaboration between the state and providers can improve care coordination and provide stability and predictability for consumers.
Mary A. Hooper is executive director of the N.C. Council of Community Programs