As NC seeks to privatize Medicaid, nonprofit touts cost savings

As federal authorities weigh the North Carolina legislature’s request to privatize Medicaid services here, a Raleigh-based nonprofit that manages 1.6 million Medicaid patients for the state said it continues delivering financial savings and improved health outcomes for patients.

The nonprofit organization, Community Care of North Carolina, or CCNC, published its 2015 performance measures in the summer issue of N.C. Medical Journal, the first time that CCNC has publicized its performance in such a fashion. The Journal’s editors requested the submission for a special July/August issue dedicated to the subject of value-based care, an emerging health care trend that seeks to measure quality as it relates to the cost of providing care.

The data is timely because most legislators and the N.C. Department of Health and Human Services want to phase out CCNC’s approach to administering Medicaid and adopt a managed care system instead. The state has asked Medicaid officials for permission to switch to a system in which health care providers are allotted a certain budget for each Medicaid patient, and the doctors and hospitals would be liable for any cost overruns.

CCNC was founded 18 years ago as an alternative to corporate managed care, and its intensive case-management approach is widely supported by doctors and hospitals. The Republican strategy of privatizing Medicaid would end the state’s $110 million contract with CCNC for coordinating care for North Carolina residents on Medicaid, the federal health program for low-income and disabled people.

In the medical journal article, CCNC said that in 2015 the state’s Medicaid results are beating expectations. CCNC said total costs were 5 percent below an established benchmark, emergency room visits were 7 percent below, inpatient hospital admissions were 26 percent below, and hospital readmissions were 51 percent below.

“Per-member spending continues to decline,” CCNC concluded in the 4-page paper.

Among the 1.6 million patients CCNC manages, the average cost per patient per month last year was $543. That amount has fallen every year since 2010, when the average monthly cost per patient was $597.

“We are consistently coming in under expected costs and also continually improving,” said C. Annette DuBard, CCNC’s chief health information officer and senior vice president of population health analytics. “The expected rate reflects the fact that we’re enrolling sicker, more complex patients.”

DuBard said CCNC is one of the nation’s earliest examples of a patient management approach in which doctors and hospitals organize to coordinate patient care. She noted a 2015 state audit that concluded that CCNC reduced the state’s Medicaid expenses by about 9 percent.

“When our people go out of state to make presentations they’re rock stars,” said CCNC spokesman Paul Mahoney. “We’re respected as pioneers.”

DuBard declined to address CCNC’s 2015 performance implications for the state Medicaid privatization effort, but said CCNC would bid on contracts if the change is approved. The decision from Centers for Medicare and Medicaid Services is not expected to come until after the November presidential and congressional elections.

CCNC, with 159 employees, is an umbrella group that oversees 14 regional health care networks that include more than 1,600 medical practices in all 100 counties of the state. Some 600 care managers across the state work closely with Medicaid patients and their families to make sure they are seeing a doctor, taking their medications, getting checkups and managing their symptoms. CCNC manages 1.6 million of North Carolina’s 1.9 million Medicaid beneficiaries.

The state pays $3.6 billion toward Medicaid for state residents and is a huge chunk of the state’s $22 billion budget. The federal government pays the majority of North Carolina’s $15 billion Medicaid program. That money largely pays for doctors, medicine, hospitals and other related costs.

Of the CCNC-managed patients, 53,875 were admitted to hospitals last year. That year there were 3,262 hospital readmissions within 30 days of the original admission, but more than 6,600 readmissions had been expected based on the 2012 performance benchmarks.

This story was originally published September 2, 2016 at 5:45 PM with the headline "As NC seeks to privatize Medicaid, nonprofit touts cost savings."