Health Plans Under Medicaid Transformation

Blog | October 24, 2018


By Berkeley Yorkery


The deadline for submitting a proposal to be a Standard Prepaid Health Plans (PHP) vendor under Medicaid transformation passed last week and federal approval for the Medicaid Transformation is expected any day. This means Medicaid transformation in North Carolina is moving toward the implementation stage, and stakeholders should prepare for change.


One of the biggest changes under Medicaid Transformation will be the move from one Medicaid plan to many. Currently, the vast majority of Medicaid beneficiaries are in the same program, and Medicaid is administered by the state. Under transformation, there will be multiple types of PHPs and multiple PHP vendors.


NC DHHS has announced two types of PHPs:


  • Standard PHPs, which will cover physical, behavioral, and pharmacy services for most Medicaid and NC Health Choice enrollees. The PHP contracts that will be awarded in February are for Standard Plans. Standard plans will be available upon launch of Medicaid Transformation.
  • Tailored PHPs, which will be targeted to serve special populations with unique health care needs (e.g., foster children tailored plan, behavioral health tailored plan, intellectual/developmental disability tailored plan).
    • The behavior health intellectual/developmental disability (BH IDD) Tailored Plans are expected to launch “at the start of the first fiscal year that is one year after the implementation of the first contracts for Standard Benefit Plans [1].” If the first contracts for Standard Plans launch in November of 2019, then BH IDD Plans would be operational in July of 2021. During the first four years of BH IDD Plans, Local Management Entity-Managed Care Organizations (LME/MCOs) are the only approved vendor and must contract with an existing approved PHP vendor.
    • The tailored plan for children in foster care will be designed to “provide a high level of coordination among the many individuals and entities involved in providing for the physical, behavioral, developmental, social, and educational needs [2]” of foster care children. The tailored plan for children in foster care is expected to launch one year after managed care implementation (February of 2020 on the current timeline) [3].


Both types of plans will cover the same benefits and populations and will have to meet the same requirements. Tailored plans will offer some enhanced benefits.


Current Timeline [4]


The NC Department of Health and Human Services will award Standard Plan PHP contracts in February. There are expected to be up to four commercial Standard PHPs offered statewide and up to 12 regional provider-led entity Standard PHPs [5]. Once contracts are awarded, PHPs will begin contracting with providers and preparing for enrollment by opening call centers. NC DHHS has announced that the transition to Standard Plan PHPs will take place in two phases but has not announced which regions will be included in each phase. Medicaid enrollees in regions in phase 1 will enroll between July and September of 2019, with the PHPs launching November 1. Those in regions in phase 2 will enroll between October and December of 2019, with the PHPs launching in February of 2020.


If these timelines hold, the next year will be one of rapid acceleration of Medicaid Transformation in North Carolina.







[5] North Carolina Department of Health and Human Services has designated six Medicaid regions for Medicaid Transformation.