April 3, 2024
The Jt. Legislative Oversight Committees on Health and Human Services and Medicaid convened this week to receive updates from the NC Department of Health and Human Services related to child care, behavioral health investments and challenges, Medicaid expansion, Medicaid transformation, Medicaid pharmacy benefit managers, an overview of LME/MCOs, and more.
The Department shared that over 400,000 North Carolinians have enrolled in Medicaid expansion since it launched in December 2023. This number represents two-thirds of the original 600,000 individuals that the state expects to enroll over the next two years. An average of 1,000 people have enrolled each day, which is a pace far faster than other states who have expanded Medicaid.
The first presentation in the Jt. Legislative Oversight Committee on HHS highlighted North Carolina’s child development and early education system. The legislature enacted a law last year that allowed NCDHHS to modernize its quality rating and improvement system (QRIS). The NC Child Care Commission has led the QRIS modernization through 11 months of outreach efforts with more than 1,800 stakeholders across the state. The Commission is working to propose rules and draft legislation to adopt these updates. Child care facilities are also facing staffing shortages and the Department requested additional funding to address financial shortfalls.
The committee then received an update on recent investments in behavioral health initiatives. The legislature made an historic $835 million investment in behavioral health in 2023, supporting increased Medicaid reimbursement rates for behavioral health providers, improvements to the crisis system of care, continuum of services for justice-involved individuals, improving the behavioral health workforce pipeline, and child and family well-being. In year 1, the Department plans to fund infrastructure to allow current successful programs to expand their impact and reach and focus on maximizing investments by identifying Medicaid funding opportunities. In year 2, the Department will enhance existing programs to improve service quality and create a path for long-term sustainability by targeting state funds and braiding with Medicaid and other federal funds. The Department will engage community partners, rely on data for investments, and track measures of success.
The Department also provided an overview of Chapter 122C policy updates. The 122C statutes that govern our behavioral health system are nearly 40 years old and have never been comprehensively updated. Piecemeal changes over the years have resulted in a fractured set of laws, and modernization is needed to ensure the statutes reflect the current system. Policy modernization is needed now due to the large number of North Carolinians waiting in the ED for access to behavioral health care. Also, current outpatient commitment laws don’t clearly define required treatment and are ineffective for the most vulnerable and high-risk psychiatric patients. The Department is engaging stakeholders to solicit feedback with a wide range of external partners. Discussions are ongoing and NCDHHS is working to finalize a set of proposed changes.
The committee received an update on healthcare staffing challenges in state operated healthcare facilities. The facilities are struggling with high rates of vacancy and turnover and are relying heavily on temporary employees. 34% of beds in the state’s psychiatric hospitals are not in service due to lack of staff, and an average of 225 people are on a wait list to receive care. Higher pay, sign-on and retention bonuses, and labor market adjustments are helping some, but challenges remain with keeping pay competitive and addressing staff burnout.
The Jt. Legislative Oversight Committee on Medicaid began with a financial update from NC Medicaid. NC Medicaid is still predicting to end the fiscal year within 1% of its budget. The Department also provided an update on Medicaid transformation and were confident that tailored plans for individuals with behavioral health needs and intellectual/developmental disabilities (I/DD) will go live on July 1. NCDHHS is working to ensure that the health plans can meet contractual deliverables to operationalize the program, have strong provider network coverage in their regions, and the necessary technology to support operations.
The committee also received an update on the Healthy Opportunities Pilots through NC Medicaid, which provides evidence-based, non-medical interventions to address social determinants of health. Currently the program operates in 3 regions across the state, but NCDHHS requested an 1115 waiver renewal last year to allow for expansion of HOP statewide. Early findings of the program show that participation in HOP significantly lowered health care expenditures, decreased ED utilization, and reduced risk of food insecurity, housing instability, and lack of access to transportation. As of November 30, 2023, 50,585 beneficiaries in Pilot Regions screened for qualifying needs, 13,271 unique individuals enrolled, 198,291 services were delivered, and 88% of HOP members with an unmet need received at least one HOP service.
CEOs from the four Local Management Entities/Managed Care Organizations (LME/MCOs), including Alliance Health, Partners, Trillium Health Resources, and Vaya Health, provided the committee with an overview of their entities and their commitment to move forward with tailored plans on July 1. LME/MCOs manage mental health, intellectual/ developmental disabilities, substance use disorder, and traumatic brain injury services for the state’s Medicaid and uninsured populations.
The committee also received an update on Medicaid expansion. With over 400,000 beneficiaries enrolled since the December 1 launch date, NCDHHS is starting to see the number of enrollees leveling out. This is not unexpected given the rapid pace at which beneficiaries initially enrolled. The Department is leaning on community outreach to enroll additional beneficiaries. This includes planned media campaigns and a new “NC Medicaid Ambassador Initiative” which uses a strategic network of volunteer organizations throughout North Carolina to help potential beneficiaries navigate the Medicaid application process. NC Medicaid provider enrollment and participation continues to increase, and primary care provider enrollment is rebounding.
The last presentation included an update on NC Medicaid’s Pharmacy Benefit Manager. NC Medicaid ensures beneficiaries and providers have access to evidence-based, cost-effective medications at the best overall value to beneficiaries. The Medicaid Drug Rebate Program (MDRP) uses the Single State Preferred Drug List (PDL) to maximize supplemental rebates negotiated by the state. A Single State PDL is a list of drugs by therapeutic class, which are most cost-effective to the state. NC Medicaid pioneered this Single State PDL model, and all NC Medicaid plans follow the Single State PDL. By requiring a Single State PDL in managed care, NC Medicaid has saved NC hundreds of millions of dollars. NC Medicaid’s pharmacy program has given beneficiaries access to prescriptions they need a minimal cost, supports whole person care, produces healthier populations, and provides fair reimbursement and less administrative burden for providers.