The three managed-care organizations stitching together a proposed western region for behavioral health services have circled July 1, 2016, as a merger date they believe is conservative and realistic.
However, that start-up date could be a year too late if July 1, 2015, remains the Medicaid reform implementation goal of the McCrory administration.
The year’s difference could determine whether the groups (CenterPoint Human Services, Partners Behavioral Health Management and Smoky Mountain Center) survive as a joint overseer of behavioral health in 35 counties, potentially take on individual subcontractor roles or just go out of existence.
CenterPoint, based in Winston-Salem, oversees mental health, substance-abuse and developmental disability services for more than 70,000 eligible Medicaid recipients in Davie, Forsyth, Rockingham and Stokes counties.
It has 189 full-time and 19 part-time employees, of which 122 were hired in the past year as part of its MCO transition. Counting the other two MCOs, there could be more than 750 jobs affected by a potential merger.
Gov. Pat McCrory and state health Secretary Dr. Aldona Wos announced in April their Medicaid reform initiative, including a start date of the beginning of the 2015-16 fiscal year.
Since then, they have provided few details aside from confirming that Wos will make a presentation to the General Assembly on March 17.
Ricky Diaz, a spokesman with N.C. Department and Health and Human Services, said Friday there is no update on the Medicaid reform timeline.
“It is still a process, and the governor just recently named the Medicaid reform advisory group, which will collaborate with DHHS in our development of a detailed plan to reform the system,” Diaz said.
Betty Taylor, executive director of CenterPoint, provided a merger timeline for getting to July 1, 2016, at Thursday’s board meeting. She also acknowledged that the three MCOs must have “a Plan B” ready to go if Wos and DHHS don’t agree to push back the implementation date.
At Tuesday’s meeting with local advocate groups, Taylor said DHHS officials “are focused on reaching the goal they want to achieve, and we won’t know what that is until the secretary presents her plan to the legislature March 17.”
“We’re in an interesting dance in that we don’t want to get ahead of DHHS, but we also want to show them we are ready and capable of continuing to play our public management role.”
The focal point of McCrory’s plan is putting two to four for-profit companies or nonprofit agencies in charge of all aspects of the state’s $13 billion Medicaid program – physical, behavioral and dental – in a “whole person” approach.
The program serves more than 1.5 million North Carolina residents, most of whom are poor children, older adults and the disabled.
Meanwhile, advocates are eager for DHHS to provide a first-year evaluation of MCOs to see if they actually contributed to cost savings without reducing patient services, as well as lowering hospital emergency department visits and admissions by helping people experiencing behavioral health issues get access to pre- and post-crisis alternative care. The MCO initiative began statewide coverage in February.
The McCrory administration is forming a nonprofit group, the N.C. Economic Development Corp., to handle corporate recruitment efforts.
A nonpartisan Washington research center, Good Jobs First, has warned North Carolina about the strategy’s viability and effectiveness through stark criticism of public-private efforts in eight states. McCrory and Commerce Secretary Sharon Decker have objectives similar to several of the featured states.
Although Decker said state officials have looked at partnership models in Arizona, Florida, Indiana and Virginia, she’s confident North Carolina will come up with a strategy that best fits its economy.
DHHS spokeswoman Julie Henry said in April “the intention is not to privatize the state Medicaid program. We expect to receive applications from for-profit and nonprofit and community groups.”
There has been speculation among analysts and advocates that Blue Cross Blue Shield of N.C. – which would have to add a behavioral health service element – and the Community Care of N.C. network may apply to serve as one of the statewide entities.
“Each group would set up networks of medical providers that would provide statewide coverage,” Henry said.
Henry said CenterPoint and the other MCOs could find themselves in the position of auditioning the quality and efficiency of their services between now and early 2015.
Dave Richard, the state’s head of behavioral health services, said Nov. 9 that the state may be willing to carve out a behavioral health niche for the MCOs.
“If we can get the MCOs down to the right size, we certainly can consider going forward with the MCOs having a role in reform,” Richard said. “'But we don't know what that will look like yet.”
Richard has asked CenterPoint, Partners and Smoky Mountain to let DHHS know their merger intentions as soon as December.
With just those few public details in hand, the three MCOs began merger planning in six service categories in October.
After Wos’ speech, Taylor said the MCOs expect the legislature to approve, modify or reject their merger proposal by the end of the 2014 short session, which could be as late as August.
She said it may take the state Division of Medical Assistance at least six months to finalize approved merger documents to present to the federal Centers for Medicare and Medicaid Services.
Because the federal agency usually takes about a year to review the documentation and make a decision, that puts getting approval in the early 2016 timeframe, thus the July, 1, 2016, start-up date.
Bryan Thompson, CenterPoint’s vice chairman, said during the board meeting he doesn’t believe that July 1, 2015, is a “drop dead deadline” for DHHS because of recent legislative pushback related to the heavily criticized July 1, 2013, rollout of the NCTracks payment-processing system for Medicaid.
However, one reason for DHHS to hold to the July 1, 2015, start-up date is that pushing back to July 2016 could mean implementation glitches occurring in the four months before a likely contested re-election campaign for McCrory.
John Dinan, a political science professor at Wake Forest University, said Medicaid is likely to be an issue during the 2016 governor’s campaign, particularly if the issue of Medicaid expansion hasn’t been resolved.
“I expect that will be a major topic of discussion in a campaign, as signaled by (N.C. Attorney General) Roy Cooper focusing heavily on that issue this week,” Dinan said. Cooper is being speculated as the front-runner for the Democratic nominee for governor.
“There are also issues concerning how the state delivers and structures its Medicaid program, which involves the rollout of the NCTracks system and the governor’s proposed overhaul of the provider system,” Dinan said,
“These are not likely to be high-profile campaign issues in 2016, in the same way as other hot-button issues.
“But to the extent that Medicaid delivery issues become or remain troubling, there is always the possibility they could be raised in a campaign.”
Among the outstanding questions about a merger western region MCO are: Who would run it, where would it be based, what jobs would be affected, and what influence would the four CenterPoint counties have?
When asked by a board member about whether one of the three MCOs is dominating consolidation discussions, Taylor said that is not happening.
Rather, she said the MCO executives want to create a new entity “drawing on the strengths of the three.”
When asked about who is leading the merger effort, Taylor stressed that none of the chief executives are, and that Brian Ingraham, the head of Smoky Mountain, is not the “heir apparent” to run the merged entity.
“We have tabled such discussions to begin building the combined entity,” Taylor said.
Ingraham could not be reached for comment about the MCO merger initiative.
Taylor said the MCOs are committed to provide at least a one-page merger update to employees and their local communities.
Merger presentation updates are set tentatively for 11:30 a.m. Dec. 16 at Rockingham Community College and 5:30 p.m. Dec. 17 at CenterPoint. Taylor said the MCO executives are trying to arrange a breakfast meeting with local legislators and state officials in Raleigh to discuss the merger process.
Because of the uncertainty about Wos’ overall Medicaid reform plan, Taylor said CenterPoint will not sign any merger-related agreements involving financing and autonomy.
“There is no legitimate reason to move forward on those aspects until we see what the secretary, the legislature and CMS are willing to approve,” Taylor said.
“But we have to be able to show we are improving the system in the meantime.”