A First Look at North Carolina’s Section 1115 Medicaid Waiver’s Healthy Opportunities Pilots
Issue Brief
“About Social Determinants of Health,” World Health Organization, accessed March 22, 2019, http://www.who.int/social_determinants/sdh_definition/en/.
Under federal Medicaid managed care rules, Medicaid MCOs may have flexibility to pay for non-medical services through “in-lieu-of” authority and/or “value-added” services. “In-lieu-of” services are a substitute for covered services and may qualify as a covered service for the purposes of capitation rate setting. “Value-added” services are extra services outside of covered contract services and do not qualify as a covered service for the purposes of capitation rate setting.
The federal court that’s ruled on this issue so far rejected the contention that the Secretary could focus on alternative criteria, including health and well-being, in approving the demonstration project, instead of the objective to promote affordable health coverage. See: https://ecf.dcd.uscourts.gov/cgi-bin/show_public_doc?2018cv1900-58.
Session Law 2015-245, General Assembly of North Carolina, Session 2015, http://www.ncleg.net/Sessions/2015/Bills/House/PDF/H372v8.pdf as amended by Session Law 2016-121, General Assembly of North Carolina, Session 2016, https://www.ncleg.net/EnactedLegislation/SessionLaws/HTML/2015-2016/SL2016-121.html.
North Carolina Amended 1115 Demonstration Application, submitted November 20, 2017, https://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Waivers/1115/downloads/nc/nc-medicaid-reform-pa2.pdf.
CMS did not approve a number of provisions requested by the state. The state notes that it will continue to negotiate the following waiver provisions with CMS: uncompensated care pool for tribal providers, workforce innovation fund, and behavioral health home capacity-building funds. See: https://files.nc.gov/ncdhhs/CMS-1115-Approval-FactSheet-FINAL-20181024.pdf.
North Carolina Amended 1115 Demonstration Application, submitted November 20, 2017, https://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Waivers/1115/downloads/nc/nc-medicaid-reform-pa2.pdf.
Prior to the implementation of BH I/DD tailored plans, BH I/DD qualified enrollees will remain in the FFS Medicaid system for physical health services and in the state’s 1915(b) program for BH I/DD services instead of being mandatorily enrolled in the “standard” plan.
North Carolina Department of Health and Human Services, North Carolina’s Healthy Opportunities Pilots: A Review of Proposed Design for Interested Stakeholders, February 15, 2019, https://files.nc.gov/ncdhhs/documents/Healthy-Opportunities-Pilot_Policy-Paper_2_15_19.pdf.
For waiver budget neutrality purposes, pilot services are being treated as “hypothetical” – meaning, CMS considers these expenditures would have been eligible to receive FFP elsewhere in the Medicaid program (e.g., under section 1915 or under state plan authority). Subsequently, CMS does not require savings to offset these expenditures as part of the Section 1115 waiver. See: SMD # 18-009 Budget Neutrality Policies for Section 1115(a) Medicaid Demonstration Projects, August 22, 2018, https://www.medicaid.gov/federal-policy-guidance/downloads/smd18009.pdf.
North Carolina Department of Health and Human Services, North Carolina’s Healthy Opportunities Pilots: A Review of Proposed Design for Interested Stakeholders, February 15, 2019, https://files.nc.gov/ncdhhs/documents/Healthy-Opportunities-Pilot_Policy-Paper_2_15_19.pdf.
North Carolina Medicaid Reform Demonstration (11-W00313/4), approved October 19, 2018, https://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Waivers/1115/downloads/nc/nc-medicaid-reform-ca.pdf.
North Carolina Department of Health and Human Services, Using Standardized Social Determinants of Health Screening Questions to Identify and Assist Patients with Unmet Health-related Resource Needs in North Carolina, April 5, 2018, https://files.nc.gov/ncdhhs/documents/SDOH-Screening-Tool_Paper_FINAL_20180405.pdf.
North Carolina Department of Health and Human Services, North Carolina’s Healthy Opportunities Pilots: A Review of Proposed Design for Interested Stakeholders, February 15, 2019, https://files.nc.gov/ncdhhs/documents/Healthy-Opportunities-Pilot_Policy-Paper_2_15_19.pdf.
For waiver budget neutrality purposes, pilot services are being treated as “hypothetical” – meaning, CMS considers these expenditures would have been eligible to receive FFP elsewhere in the Medicaid program (e.g., under section 1915 or under state plan authority). Subsequently, CMS does not require savings to offset these expenditures as part of the Section 1115 waiver. See: SMD # 18-009 Budget Neutrality Policies for Section 1115(a) Medicaid Demonstration Projects, August 22, 2018, https://www.medicaid.gov/federal-policy-guidance/downloads/smd18009.pdf.
NC Medicaid, Healthy Opportunities Pilots Fact Sheet, https://files.nc.gov/ncdhhs/SDOH-HealthyOpptys-FactSheet-FINAL-20181114.pdf.