NC Department of Health and Human Services NC Medicaid Transformation

1. NC Department of Health and Human Services NC Medicaid Transformation NC Community Psychiatrists’ Leadership Network Symposium Carrie L. Brown, MD, MPH Chief Medical Officer for Behavioral Health and IDD May 4, 2019

2. Medicaid Transformation Vision The vision is “to improve the health of North Carolinians through an innovative, whole-person centered and well-coordinated system of care which addresses both medical and non-medical drivers of health.” - Mandy Cohen, MD Secretary, NC Department of Health and Human Services

3. Context for Medicaid Transformation • In 2015, the NC General Assembly enacted Session Law 2015-245, directing the transition of Medicaid and NC Health Choice from predominantly fee-for-service to managed care. • Since then, the North Carolina Department of Health and Human Services (NC DHHS)has collaborated extensively with clinicians, hospitals, beneficiaries, counties, health plans, elected officials, advocates, and other stakeholders to shape the program.

4. NC DHHS Committed to EnsuringMedicaid Managed Care Plans: • Deliver whole-person care through coordinated physical health, behavioral health, intellectual/developmental disability and pharmacy products and care models • Address the full set of factors that impact health, uniting communities and health care systems • Perform localized care management at the site of care, in the home or community • Maintain broad provider participation by mitigating provider administrative burden

5. 1115 Demonstration Waiver • NC DHHS is implementing Medicaid Transformation through a 1115 Demonstration Waiver. • DHHS applied for 1115 Waiver in June 2016, amended November 2017 • CMS approvedNC’s 1115 in October 2018 through October 31, 2024.

6. 1115 Demonstration Waiver • Approved Elements include: • Use of Managed Care • BH/IDD Tailored Plans for populations with specific complex needs • Specialized Plan for Former/Current Foster Care Youth • Pilot program to address health determinants – The NC Enhanced Case Management and Other Services Pilot Program (“Healthy Opportunities”) • SUD Treatment in IMDs

7. Funding for Managed Care Health Plans • For Medicaid-funded services, MCOs are paid a monthly, actuarily-sound, risk-adjusted capitation payment based upon their monthly number of Medicaid members (Per Member Per Month – PMPM). • Due to the level of disability/service cost of TP members, PMPMs for TPs will be significantly higher than for SPs, enabling TPs to manage far fewer covered lives. • Plans must have adequate capital to cover any losses they experience.

8. Funding for Managed Care Health Plans • Plans are subject to a Medical Loss Ratio (MLR) of 88%, which measures the percent of premiums used for health care services and health care quality improvement • If Plans do not meet the Medical Loss Ratio they must remit some of their premiums and/or fund community reinvestment • DHHS also may withhold some premium payments if plans do not meet specific quality or performance goals

9. Shift to Value-Based Payment is Well Underway Nationally & in NC North Carolina Medicaid’s increasing focus on value-based payment (VBP) is part of a broader shift in payment models across payers. National Landscape North Carolina • Major NC health systems are signing value-based arrangements across payers. • 34% of U.S. healthcare payments were “value-based” in 2017, up from 23% in 2015, according to research conducted by the Healthcare Payment Learning and Action Network (HCP-LAN).* • Value-based arrangements were most common in Medicare but are widespread across payers. “Blue Cross NC and Five Major Health Systems Announce Unprecedented Move to Value-Based Care” -BCBSNC, 1/2019 Percentage of Healthcare Payments in Level 3 or 4 Payment Models by Payer (2017) “Blue Cross NC, UNC Health Alliance Agreement Lowers Triangle ACA Rates by More Than 21 Percent” - Business Wire, 8/2018 “Duke Physician-Led Network Exceeds Quality Standards, Saves Medicare Millions” -Duke Health, 9/2018 *Payments categorized as level 3 (alternative payment models built on FFS architecture with upside/downside risk) or 4 (population based payment) under the Healthcare Payment Learning and Action Network (HCP-LAN) alternative payment model framework. Source: “APM Measurement: Progress of Alternative Payment Models”, HCP-LAN, 2018. Survey responses were voluntary.

10. NC Medicaid Managed Care Products • Session Law 2018-48 further directed DHHS to create 2 types of managed care products: • Standard Plans for most NC Medicaid/Health Choice beneficiaries (duals not included) • Operated by Prepaid Health Plans (PHPs) 5 contract awards were announced in February 2019: • 4 statewide Commercial Plans (WellCare, BCBSNC, AmeriHealth Caritas, UnitedHealthcare). • 1 regional Provider-led Plan (Carolina Complete Health) • Estimated 1.6 million people covered (of 2.1M beneficiaries).

11. NC Medicaid Managed Care Products • Tailored Plans for select NC Medicaid/Health Choice (duals included) high-need populations with I/DD, TBI, SMI/SED, and/or severe SUD. Offers more robust BH/IDD service array. • Only current LME-MCOs eligible to apply through a RFA, 5-7 regions; replaces current LME-MCO system. • Estimated 25,000-35,000 dual-eligible and 80,000 - 100,000 Medicaid-only

12. Beneficiary Eligibility for Managed Care *DHHS has published final policy guidance for TP eligibility as of 3/18/19 ; **Will require legislative change The majority of Medicaid-only beneficiaries will transition to standard plans beginning in Nov 2019 through Feb 2020. Other populations will have delayed enrollment or will be exempt or excluded from managed care (remaining in FFS coverage): • Excluded from Medicaid Managed Care: • Beneficiaries with limited Medicaid benefits (e.g., partial dual eligible; undocumented aliens; some qualified aliens; NC HIPP; family planning) • Medically needy with a deductible/spend-down • CAP/C and CAP/DA enrollees** • PACE enrollees • Temporarily excluded for up to 5 years: • Beneficiaries with >90day nursing facility stays • Non-TP eligible Dual eligible • Exempt from Medicaid Managed Care: • Members of federally recognized tribes, including members of the Eastern Band of Cherokee Indians (EBCI)

13. Design and Launch Timeline Until early 2020, DHHS will conduct intensive planning for both Standard Plans (SPs) and Tailored Plans (TPs). After SPs launch, DHHS will continue implementation planning for TPs. Aug. 2018 Feb. 2019 Nov. 2019 Feb. 2020 May 2020 July 2021 BH I/DD TP design (8/2018-2/2020) BH I/DD TP implementation planning (2/2020-7/2021) SP implementation planning (8/2018-2/2020) • SPs launch in initial regions – 2 and 4 DHHS awards BH I/DD TP contracts (tentative) DHHS released SP RFP • BH I/DD TPs launch (tentative) • SPs launch in remaining regions; • DHHS releases BH I/DD TP RFA • (tentative) DHHS issued SP contracts

14. Advanced Medical Homes • The AMH program provides a pathway for practices to have a larger role in managing the health outcomes and cost for their patient populations. Goals of AMH Program • Preserve broad access to primary care services for Medicaid enrollees • Strengthen the role of primary care in care management, care coordination, and quality improvement • Allow practices to implement a unified approach to serving Medicaid beneficiaries, minimizing administrative burden • Provide clear financial incentives for practices to become more focused on cost and quality outcomes for populations, thus increasing accountability over time

15. Overview of Advanced Medical Home Program The AMH Program will serve as the primary vehicle for delivery of local care management under Medicaid managed care. Tiers 1 and 2 • AMH Payments • PMPM Medical Home Fees • Same as Carolina ACCESS • Minimum payment floors • PHP retains primary responsibility for care management • Practice requirements are the same as for Carolina ACCESS • Practices will need to interface with multiple PHPs, which may employ different approaches to care management Tier 3 • AMH Payments • PMPM Medical Home Fees • Same as Carolina ACCESS • Minimum payment floors • PMPM Care Management Fees • Negotiated between PHP and practice • Performance Incentive Payments • Negotiated between PHP and practice • Based on AMH measure set • PHP delegates primary responsibility for care management to the AMH • Practice must meet all Tier 1 and 2 requirements, plus additional Tier 3 care management responsibilities • Practices will have the option to provide care management in-house orthrough a single CIN/other partner across all Tier 3 PHP contracts PHPs should attempt to contract with all certified Tier 3 AMHs and must demonstrate a contract with at least 80% of certified Tier 3 AMHs in each of the PHP’s regions. Note: Tier 4 will launch on a later date and will allow practices to enter more innovative, advanced payment arrangements.

16. Working with CINs and Other Partners in the AMH Program AMHs may choose to work with Clinically Integrated Networks (CINs) or other partners* to assist in the fulfilment of AMH practice requirements. CINs/Other Partner May: • Provide local care coordination and care management functions and services • Support AMH data integration and analytics tasks from multiple PHPs and other sources, and providing actionable reports to AMH providers • Assist in the contracting process on behalf of AMHs Although the majority of AMH Tier 3 practices may elect to contract with CINs/other partners for support, practices are not required to do so * Regardless of whether such organizations meet federal standards for clinical integration.

17. Promoting Value, Quality and Population Health • DHHS is developing a longer-term value-based payment roadmap and expects that more advanced providers and systems will take advantage of opportunities to build infrastructure for higher-risk arrangements in the early years of managed care implementation. Value-Based Payments • By end of Year 2, PHPs’ expenditures governed under VBP arrangements must: • Increase by 20 percentage points, OR • Represent at least 50% of total medical expenditures • State’s expectations related to VBP and capabilities of AMH practices will increase over time • The AMH program represents an opportunity for providers—especially larger practices and those affiliated with health systems—to fund population health investments that will be critical in a VBP environment Ensuring Quality • Though the Quality Strategy, PHPs will be monitored on 33 priority quality measures against national benchmarks and state targets • DHHS will require that PHPs implement annual Quality Improvement Projects  

18. Care Management Key Components of Integrated Care Management, Cont.: Multidisciplinary care teams. Each enrollee’s care team, coordinated by his/her care manager, will consist of a multidisciplinary group of clinicians and service providers with the ability to address all of the enrollee’s needs. Clinical consultation. Care managers will have access to clinical consultants across primary care and psychiatry. Addressing unmet resource needs. Care managers will connect enrollees to programs and services that address unmet health-related resource needs (e.g. housing, food, transportation, interpersonal safety, employment, etc.), including through healthy opportunity pilots in regions where available. Data strategy. The BH I/DD TP design will also include strategies for the state and key TP stakeholders to bridge silos, and facilitate the timely and secure exchange of information to support and inform integrated care management.

19. Care Management • A team-based, person-centered approach to effectively managing patients’ medical, social and behavioral conditions, including: • Management of rare diseases, high-cost procedures (e.g., transplant, specialty drugs) • Management of enrollee needs during transitions of care (e.g., from hospital to home) • High-risk care management (e.g., high utilizers/high-cost beneficiaries) • Chronic care management (e.g., management of multiple chronic conditions) • Management of high-risk social environments (e.g., adverse childhood events, domestic violence) • Identification of enrollees in need of care management (e.g., screening, risk stratification, priority populations) • Development of comprehensive assessments/care plans (across targeted populations) • Development and deployment of prevention and population health programs • Coordination of services (e.g., appointment/wellness reminders and social services coordination/referrals)

20. Care Management • Standard Plans • Targeted to populations with special healthcare needs • Addresses physical and behavioral health as well as social determinants • Primarily provided through Tier 3 or 4 Advanced Medical Homes (AMHs), based upon state certification • Tailored Plans • Meets federal Health Home standards • Available to all enrollees. Case management cannot be duplicated for some receiving a comprehensive service or evidenced-based practice • Addresses physical and behavioral health, as well as social determinants • Provided through designated BH/IDD AMHs, Care Management Agencies, or the TPs directly

21. Healthy Opportunities in Medicaid Transformation North Carolina is committed to improving health outcomes and lowering healthcare costs by delivering “whole person” care and addressing non-medical factors of health. • Embedding Healthy Opportunities in the Managed Care Program: • All PHPs will have a role in addressing non-medical factors that drive health outcomes and costs, including: • Screening for non-medical needs • Connecting beneficiaries to community resources using North Carolina’s new platform for closed loop referrals, NCCARE360 • Providing additional support for high-need cases, such as assisting members who are homeless in securing housing • Healthy Opportunities Pilots: • PHPs in two to four geographic areas of the state will work with their communities to implement the “Healthy Opportunities Pilots,” as approved through North Carolina’s 1115 waiver.* • Pilots will test evidence-based interventions designed to reduce costs and improve health by more intensely addressing housing instability, transportation insecurity, food insecurity, interpersonal violence, and toxic stress for eligible Medicaid beneficiaries. *For additional detail on North Carolina’s Approved 1115 waiver, please visit DHHS informational 1115 wavier website, available at: https://www.ncdhhs.gov/assistance/medicaid-transformation/proposed-program-design

22. v What is NCCARE360? Part of a Broader Statewide Framework v v NCCARE360 is the first statewide coordinated network that includes a robust data repository of shared resources and connects healthcare and human services providers together to collectively provide the opportunity for health to North Carolinians. NCCARE360 Partners: NCCARE360 Work Force (Community Health Workers) Standardized Screening Multi-Faceted Approach Promoting the Opportunity for Health v v Align enrollment with existing resources Map SDOH Indicators v Medicaid Managed Care 1. Statewide Core Components 2. Regional Pilots

23. Three Functions

24. Benefits Common to Both SPs and TPs • Hospital Inpatient and Outpatient/ED care, non-hospital clinic services, physician services and telemedicine • EPSDT • Some Behavioral Health (see next slide) • Pharmacy, Prescription drugs • Labs/X-rays • Physicians; Pediatric/Family NPs • Nursing Facilities (up to 90 days, after which point beneficiaries would transition back to Fee For Service Medicaid) • Ancillary (e.g., PT, OT, ST, Respiratory, Dietary Counseling) • Ambulance • Private Duty Nursing, Hospice, Personal Care, DME, Home Infusion • Vision • Services EXCLUDED from managed care: PACE, School Services, CDSA services, Dental, Glasses Fabrication

25. BH Services in Both SPs and TPs • Inpatient (including current IMD option) • Crisis – Mobile Crisis, Facility-Based Crisis (Adult and Youth) • Outpatient – clinic and ED • Partial Hospitalization • SUD – Ambulatory Detox, Non-Hospital Detox, Medical Detox, ADATC, SAIOP*, SACOT, Opioid Treatment • Research-based Intensive Behavioral Therapy (e.g., ABA, TEACCH) • EPSDT • Peer Supports

26. Reasons for Community Behavioral Health Providers to Contract with Standard Plans • Standard Plans must accept ANY willing provider, as long as provider accepts rate and meets objective quality criteria. • There will be one credentialing process and provider contract templates will be approved by the department to aid with standardization. • Individual practitioners can elect to only contract with the insurer’s Medicaid Product. • Standard plans will be incentivized to participate in evidence based practices such as collaborative care.

27. Centralized Credentialing Application & verification Procurement & Contracting PHP Process DHHS Process PHP and provider negotiate contract PHP PNPC reviews & approves/denies Provider applies PDM/CVO verifies credentials • PHP Provider Network Participation Committee (PNPC) • Established and maintained by PHP • Reviews and makes objective quality determinations • Cannot request more information for quality determinations • Meets nationally recognized accrediting organization standards • PHP network development staff secures contracts with providers credentialed and enrolled in Medicaid • PDM/CVO certified by national accrediting organization (e.g., NCQA, URAC) • Ensures meaningful, rigorous, and fair processes • Application is single point-of-entry for all credentialing information • Medicaid Managed Care and Medicaid Fee-for-Service

28. Tailored Plan ONLY Services • Most enhanced/residential services for youth with SED • Day Treatment, IIH, MST, Child Residential (all levels), PRTF • Most enhanced services for adults with SMI • ACTT, CST, PSR • Most residential services for those with serious SUDs • ASAM 3.1, 3.5, and 3.7 (except ADATCs which are in both plan types) • Specialty/Waiver services for those with IDD/TBI • ICF-IID, Innovations Waiver, TBI Waiver* • Most current (b)(3) services* • State Single Stream and Federal Block Grant funded services

29. Tailored Plans Are A Single Plan Tailored Plans will NOT be two separate insurance products (LME-MCOs and Standard Plans) separately providing physical health and behavioral health services in a region. • Legislation requires LME-MCOs, operating a Tailored Plan, to contract with a Standard Plan; however, the Department will establish requirements that ensure these contracts are consistent with the principles of integrated care. • Every aspect of Tailored Plan design will aim to promote integrated care in line with these principles, and stakeholders will have opportunities to engage with the Department on these design topics to ensure integration remains central to the planning effort. • Enrollees will have a SINGLE: • Insurance Plan • Insurance Card • Member Handbook • Member Services Line

30. BH I/DD Tailored Plan Enrollment Process: Eligibility Identified Post-Standard Plan Launch On an ongoing basis, DHHS will review encounter, claims and other available data to identify Standard Plan beneficiaries who meet BH I/DD Tailored Plan eligibility criteria. Depending on which eligibility criterion the beneficiary meets, he/she will either be auto-enrolled or have the option of enrolling in a BH I/DD Tailored Plan DHHS identifies Standard Plan beneficiary as BH I/DD Tailored Plan eligible Optional Enrollment into BH I/DD Tailored Plan Auto-Enrollment into BH I/DD Tailored Plan* • Have a qualifying I/DD diagnosis code • Have a qualifying SMI, SED, or SUD diagnosis code, and used a Medicaid-covered enhanced behavioral health service within 18 months • One or more state psychiatric hospital or ADATC admissions within 18 months • Have had two or more behavioral health crisis events (ED, other crisis, inpatient) in the past 18 months health crisis services within 18 months • Innovations Waiver/Waitlist • TBI Waiver/Waitlist • TCLI participant • Meets “Children with Complex Needs” definition • Using a Medicaid or Non-Medicaid service that will only be available through a BH I/DD Tailored Plan • Approved request by a member who is able to demonstrate s/he meets TP eligibility criteria *Prior to BH I/DD Tailored Plan launch, these beneficiaries will be auto-enrolled in FFS/LME-MCO. They will have the option to move to a Standard Plan.

31. TP Beneficiary Eligible Examples • 34yo M with Bipolar I and an Opioid Use Disorder, discharging from Central Regional Hospital • 27yo F with Schizophrenia, recently discharged from ACTT, now receiving outpatient and PSR • 15yo M with Conduct Disorder and DJJ involvement, with 2 recent behavioral health crisis events • 7yo F with PTSD and ADHD, requesting IIH services to prevent out-of- home placement • 55yo F with Moderate IDD receiving Innovations Waiver services • 2yo M with Down Syndrome • 45yo M with Alcohol Use Disorder, moderate and MDD, moderate with chronic renal impairment requesting SAIOP • 17yo M with first episode psychosis, one voluntary community hospital admission, referred for a FEP program (e.g., Oasis) funded with federal MH block grant funding

32. Key Differences: LME-MCOs vs. Tailored Plans 3 Includes TBI waiver; with managed care implementation the (c ) waiver will operate under the 1115

33. Significant Change/New Opportunities Although LME-MCOs will end, with Tailored Plans beginning in 2021, opportunities exist for system improvements: • Leverage experience of and build on successes of LME-MCOs • Implement fully integrated, whole-person care • Offer beneficiaries choice of Care Management provider • Implement funding model that supports integration • Move to value-based payments

34. Significant Change/New Opportunities • Address and pay for unmet social needs • Implement new supports for providers • Ombudsman • Centralized Credentialing • Implement new supports for beneficiaries • Ombudsman • Enrollment Broker • Support county engagement with PHPs, Enrollment Broker, Ombudsman

35. Questions? Contact: Carrie L. Brown, MD, MPH Chief Medical Officer for Behavioral Health & IDD NC Department of Health and Human Services Office: (919) 733-7011 Carrie.Brown@dhhs.nc.gov Thank you!