North Carolina's Medicaid experiment to use a combination of managed care, ACOs

October 19, 2015

North Carolina is in the process of overhauling its Medicaid program. The governor and state lawmakers are using a mixture of managed care and ACO models to put doctors, hospitals and insurers on the hook to keep rising costs in check. The state, which has not expanded Medicaid under the ACA, struggled with huge Medicaid cost overruns from 2010 through 2013. The state will open up its bids to insurance companies and doctor-and-hospital systems. It will also set up quality metrics to track how they do. The N.C. Hospital Association says some doctor-and-hospital systems in North Carolina are already meeting quality metric standards and saving money under Medicare. Some insurance companies are posting similar results. Lawmakers also set a cap of 12% for how much money can go toward administrative costs and profits. Outside of North Carolina, Oregon is also contracting with both MCOs and ACOs, and a few other states are exploring how to encourage provider organizations to play a bigger role in Medicaid managed care.