- Associated Press - Tuesday, August 8, 2017

RALEIGH, N.C. (AP) - Gov. Roy Cooper’s administration wants the state’s pending Medicaid overhaul to integrate physical and mental health treatment more quickly and expand coverage to more of the working poor in North Carolina, according to its plan unveiled Tuesday.

The Department of Health and Human Services released a report explaining how it wants the Medicaid program to look when a 2015 state law directing the reorganization takes effect, possibly in July 2019.

Two years ago, the Republican-controlled General Assembly agreed to shift Medicaid from a traditional fee-for-service program to one in which statewide managed-care companies or regional hospital and doctor networks - called “prepaid health plans” - get flat monthly amounts for each patient covered.

Supporters say the model will control costs and improve health outcomes for the roughly 2 million people in the state who qualify for Medicaid, which covers mostly poor children, older adults and the disabled. The Division of Medical Assistance, which includes Medicaid, is expected to spend nearly $3.7 billion in state funds this fiscal year, not including billions of dollars more from the federal government.

The department needs federal regulators to sign off on the overhaul and began the formal waiver process more than a year ago, when former GOP Gov. Pat McCrory was in charge. Tuesday’s report reflects updated priorities of the new Democratic governor.

Department Secretary Dr. Mandy Cohen said the proposal incorporates some ideas from Tennessee, Arizona and California and requires some alterations that would need additional General Assembly approval.

“We believe this proposal lays out the strongest possible program design for the Medicaid managed-care program based on best practices in other states and building on existing resources and infrastructure in North Carolina’s current health care system and the Medicaid program,” Cohen told reporters.

One provision would take advantage of the option through former President Barack Obama’s federal health care law to expand Medicaid coverage to potentially 375,000 more people in the state. It’s based on legislation offered by a few state House Republicans earlier this year in which most participants would have to pay insurance premiums and be working or preparing for work.

State Republican legislative leaders have not warmed to the expansion idea, however, even as the federal government would cover at least 90 percent of the expenses. Cooper has said the state is missing out on billions of additional dollars to benefit rural hospitals and economies by saying no to expansion.

“As we think about building the strongest Medicaid program we can, we want to make sure folks have access to affordable health care,” said Cohen, who previously worked in Washington on carrying out Obama’s health care law.

The state already uses managed care for treating the mentally ill through several regional agencies. The 2015 state Medicaid law directed that these managed-care agencies be excluded from the upcoming contracts with “prepaid health plans” for physical health needs until at least 2023. After that, behavioral and mental health services could be merged.

Tuesday’s blueprint would accelerate the shift to “whole-person care” as soon as mid-2020 so that people who qualify for Medicaid with mental illness, substance abuse and developmental disabilities would get their coverage though the new prepaid health plans. People with the most serious forms of mental illness or disabilities would qualify special insurance plans for their needed treatments.

It’s possible that some regional mental health agencies would be eliminated, or they could partner with prepaid health plans to provide services.

“We want them to deliver high-quality care for a whole person, whether that is physical health of behavioral health,” Cohen said in a conference call. A quicker merger of physical and behavioral health would also need legislative approval. Senate Republicans have shown interest in merging them as soon as the overhaul takes effect.

The department is taking public comment on its proposal through Sept. 8. The department also will seek information this fall from insurance companies and other networks interested in becoming prepaid health plans.

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