North Carolina: Implementing landmark Medicaid reform through a Health Transformation Center


In September 2015, the North Carolina General Assembly passed historic reform legislation that aimed to move the state’s Medicaid system from a fee-for-service model to a managed care model. Earlier this year, as a follow-up to that legislation, state officials released an innovative, multi-year draft plan for implementing the new reforms over approximately 36 months. In North Carolina, Medicaid covers nearly two million citizens at an annual cost to the federal and state government of $13 billion. About 80,000 healthcare providers in the state serve Medicaid clients.

The Medicaid reform law in North Carolina did more than just ignite a major system change to how beneficiaries will receive care. It also directed the North Carolina Department of Health and Human Services to develop a transformation innovation center (called the North Carolina Health Transformation Center, or NCHTC) that would assist providers and prepaid health plans to achieve better health and better care for state beneficiaries, improve provider and clinician engagement, and ensure predictable costs for the state. On May 1, 2016, state officials released a legislative report outlining the program design and budget while also defining the functional and operational details, organizational structure, and governance of the Medicaid reform plan for the state. The NCHTC will need to be up and running prior when larger Medicaid reform is implemented in the state, and the plan outlined in this report aims to meet that 2-3 year timeline.

Measuring performance, engaging stakeholders key to success

Among other responsibilities, the NCHTC will be responsible for capabilities around performance measurement and analytics that will evaluate the implementation of Medicaid reform in North Carolina. These strategies will play a crucial role in ensuring that Medicaid reform is implemented successfully and efficiently, while maintaining access to care for all beneficiaries in the state. The NCHTC’s measurement and evaluation capabilities will be further defined in the coming months and may include:

  • Performing measurement against metrics to identify how health plans and the state are performing.
    • The state will measure and incentive health plan performance based on predetermined metrics and expects that health plans would do the same to providers in their networks.
  • Establish and track baseline performance measures.
  • Identify opportunities for improvements by performing analysis using outputs from the measurement activities together with information gathered as part of environmental scans.
  • Evaluate reward mechanisms to appropriately incentivize plans and providers using lessons learned from other states, prepaid health plans, and clinicians.

In addition to performance measurement and analysis, the NCHTC will also help facilitate stakeholder engagement activities throughout the state as a means for stimulating innovation and systems improvement. Some of the stakeholder engagement activities include:

  • Identifying internal and external stakeholders in the state and establishing regular channels of communication to provide program transparency.
  • Communicating results of performance measurement and analysis to the appropriate stakeholders.
  • Gathering information from stakeholders to help understand the challenges and opportunities that may impact improvement in the state.
  • Disseminating innovation and improvement activities to stakeholders and provider organizations.

The NCHTC is intended to facilitate implementation of Medicaid reform, but will rely on engagement from provider organizations, health plans, and other stakeholders in the state to help ensure that the implementation steps are approached appropriately. For example, the NCHTC implementation plan calls for the development of tools that will facilitate activities such as performance measurement and evaluation. North Carolina has taken on massive changes to the state Medicaid system, and these changes should make a positive impact on individuals in the state who rely on public systems for healthcare.

Photo Credit: lendog64

Further reading:
Radiology & MIPS Reporting: Everything You Need to Know
Expert Commentary: Nathan Bays on MACRA in 2018

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