As lawmakers consider ending it, audit finds Medicaid program saves money, helps patients



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RALEIGH, North Carolina — The nonprofit program in which primary care physicians keep close tabs on most of North Carolina's Medicaid recipients saves the state more than $300 per patient annually and probably improves their health, according to a state audit released Thursday.

The review of Community Care of North Carolina by State Auditor Beth Wood's office, requested by lawmakers in 2013, comes as the organization faces an uncertain future as General Assembly negotiators near agreement on how to overhaul paying to treat Medicaid patients.

Community Care is essentially a managed-care program in which regional doctor networks and local case managers oversee the medical care of 1.4 million Medicaid consumers statewide. They seek to control chronic patient medical conditions and specialty care access, which in turn avoids more costly medical expenses.

The state pays Community Care several dollars per month per patient to cover their activities, while doctors get a few dollars to perform extra duties.

The audit, performed with the assistance of an outside medical researcher looking at data of non-elderly Medicaid patients from mid-2003 through 2012, determined Community Care saved the state on average $312 per patient annually, or about 9 percent of state spending on Medicaid. That would equate to hundreds of millions of dollars for the joint federal-state program.

The researchers also found evidence of improve health outcomes, such as a 25 percent reduction on inpatient hospital admissions. Other previous studies have calculated savings from Community Care, which has been mimicked by other states.

"The audit confirms that effective use of local resources to improve care returns significant savings to the state," Dr. Tom Wroth, CCNC's acting director, said in a news release.

Community Care could be on the verge of a tremendous upheaval.

That's because leaders of both chambers and Gov. Pat McCrory's administration want to move away from paying for each itemized treatment a Medicaid patient receives and toward paying flat rates per month for each patient. The idea shifts the risk of cost overruns away from the state and gives medical providers financial incentives to keep patients healthy. The shift could eliminate the need for Community Care to perform current responsibilities.

House and Senate Republicans confirmed Thursday they are converging on a Medicaid model in which private managed-care companies and insurers, as well in-state hospital and doctor medical networks will enter into contracts to manage and treat patients.

The House had preferred only the regional networks, called provider-led entities, to receive the contracts, but House Republicans agreed this week in principal to back the Senate's position of having both insurers and local networks, said Rep. Donny Lambeth, R-Forsyth, a negotiator. This year's General Assembly could end in a few weeks.

Senate Republicans want the state to end its Community Care contract next May and redistribute most of the $75 million in projected savings to raise payment rates to doctors for services they perform. But the House wants the Community Care contact to remain in place until the provider-led entities and managed-care companies take on patients, perhaps in four years, Lambeth said

Sen. Ralph Hise, R-Mitchell, a Senate negotiator, said the audit appears to show Community Care cost savings tailed off in the last five years of the study. While the audit shows "there's a lot of value" in coordinated care, Hise said, "it's also quite evident that it's time to move to a more aggressive system."

House Republicans have said the Community Care networks ultimately could decide to form their own provider-led entities, or subcontract with medical groups to perform case management.

Community Care has "played a very valuable role," Lambeth said. "But at some point CCNC has to re-engineer and re-invent themselves."

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