Confidence high that delayed Medicaid plans will finally launch on July 1

About 150,000 North Carolina residents are expected to be covered by “tailored plans” for people with complex care needs.

By Jaymie Baxley / April 4, 2024

North Carolina’s regional managed care organizations that will administer specialized Medicaid plans for people with complex needs say they’re ready for the plans — which have had multiple delays — to finally go live on July 1.

CEOs for the four organizations, known as LME-MCOs, appeared Tuesday before the state legislature’s Joint Legislative Oversight Committee on Medicaid. They assured lawmakers that the so-called “tailored plans,” which are expected to cover about 150,000 Medicaid participants, will launch on that schedule.

The tailored plans will serve people with intellectual or developmental disabilities, traumatic brain injuries, complex psychiatric disorders and substance use disorders — all conditions that require more extensive care and support than that for typical enrollees. The N.C. Department of Health and Human Services originally hoped to implement the plans in December 2022, but the rollout was pushed back multiple times to give the LME-MCOs more time to prepare and nail down contracts with providers.

“We all feel highly confident and highly prepared about going forward,” Rhett Melton, CEO of Partners Health Management, told the committee. He added that his organization has “passed the readiness reviews” and the “re-reviews of the re-reviews of the re-reviews.”

Partners will be administering 15 counties, and Alliance Health seven counties across a swath of central North Carolina Vaya Health will manage 32 counties, most of them in the western part of the state. Trillium Health Resources will handle 46 counties in the east.

Melton’s comments were echoed by Jay Ludlam, the state’s deputy secretary for Medicaid. He said his department has “spent a lot of time working with the health plans to validate that they are ready for this launch.”

“The key point of all of this is to be sure that the [LME-MCOs] are ready to do the work, and that we at the department are ready to oversee the health plans to ensure that they’re doing the work correctly,” he said.

‘Shared goal‘

Rob Robinson, CEO of Alliance Health, told lawmakers that LME-MCOs have been part of North Carolina’s health care system for more than 50 years, in one form or another. 

He explained that the agencies began life in the 1970s as “community mental health centers.” These centers, Robinson said, were tasked with both “providing services and managing the funding to deliver that care” — a conflict that eventually led to reform.

After being ordered to contract with outside care providers in 2001, the centers rebranded themselves as local management entities, or LMEs. Additional restructuring came in 2013, when the LMEs were told by the state to change their business model. The LMEs shifted from being organizations that administered fee-for-service plans paying providers for every visit and every test, to managed care companies, which are paid a lump monthly sum to provide all the services needed by a beneficiary within that budget. 

The twist is that these managed care organizations care for some of the most challenging — and expensive — Medicaid participants, those with mental health problems or who have intellectual and developmental disabilities. 

The LMEs morphed into LME-MCOs.

The implementation of tailored plans follows a consolidation that left the state with four LME-MCOs instead of the six that existed last year. Sec. Kody Kinsley, head of DHHS, ordered the consolidation last November to streamline the plans’ rollout. 

Trillium took control of Eastpointe Human Services under the consolidation, creating a single organization for eastern North Carolina. Another LME-MCO, the Sandhills Center, was dissolved in connection with the consolidation. 

“We all have a shared goal to make sure that the people with the most complex behavioral health, intellectual developmental disabilities, addiction and TBI needs get their needs met,” said Joy Futrell, CEO of Trillium. “We all do that throughout those local communities, which are all different. Things that work in smaller rural areas like Bladen County won’t work in Guilford County, and things that work in Wake won’t work in Camden.”

Tracy Hayes, CEO of Vaya Health, told the committee that she believes the LME-MCOs are uniquely suited to meet the diverse needs of the regions they manage. 

“We are local in each and every one of your counties in all of your communities,” she said. “We have staff living and working in all of the counties that we serve, whether these are care managers or county liaisons who interface directly with county staff to make sure that we are responsive to your needs, or provider network staff who are able to identify in real time what are the gaps and needs.”

North Carolina, she added, is “one of only a handful of states remaining in the country that have a public system of care like this.”

“We believe that public system should be preserved,” she said. “We believe that we are the best organizers of care to manage this complex population.”

Providers on board

State regulators’ level of confidence surrounding the state’s ability to launch the tailored plans on schedule has increased since February. 

At that time, Ludlam had warned lawmakers that the plans’ rollout could be delayed yet again if the LME-MCOs failed to meet a requirement set by federal regulators. To ensure that patients would not be forced to part ways with their longtime doctors, therapists and other care providers, the Centers for Medicare and Medicaid Services mandated that at least 90 percent of the state’s tailored plan participants be given the option of staying with their current caregivers. 

On Tuesday, Ludlam told the committee that the LME-MCOs have since contracted with enough providers to meet that threshold. 

“While our tailored plan partners have met our threshold of 90 percent of their members not being disrupted by this transition, we encourage our tailored plan partners to continue to contract to continue to find primary care providers,” he said. “And as they bring more providers into their networks, we want people to have the flexibility to switch and get care from those individuals that they best feel will give them that care.”

Before closing the meeting, Sen. Jim Burgin, a Harnett County Republican who co-chairs the committee, pushed Ludlam and the CEOs for one final assurance.

“What I’ve heard from all four of you is you are ready for July 1, is that right?” he asked.

In his response, Ludlam acknowledged the many delays that had come before. Still, he said it was important for the department to be “deliberate” in its approach “because of the populations that we serve.”

“We put together a very rigorous testing plan for [the LME-MCOs], and they passed,” he said. “So we feel confident that they will be able to go live on July 1.”