Challenges to North Carolina Medicaid contracts now over with voluntary dismissal request

Published 7:55 am Thursday, January 27, 2022

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The end of appeals by two insurance providers fighting how North Carolina’s health department decided who would run its new Medicaid managed-care initiative means legal challenges over the awarding of the contracts are now over.

The Court of Appeals last week agreed to accept the voluntary dismissal request by the two providers that lost out on contracts awarded in 2019 by the Department of Health and Human Services. Four conventional insurers and one physician partnership received the awards to run the program, which began last July and covers 1.6 million Medicaid consumers.

My Health by Health Providers — composed of 12 local hospital systems and a New Mexico-based insurer — contended the DHHS process was flawed and biased against provider-led organizations like My Health. Aetna Better Health Care of North Carolina also challenged the process, but a Superior Court judge limited its involvement in the case. The judge last year affirmed the decision of an administrative law judge upholding DHHS award decisions.

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The two providers appealed and were scheduled to participate Wednesday in oral arguments before a three-judge panel. But the groups’ lawyers asked last week that their appeal be withdrawn.

“Although My Health still believes in the merits of its appeal and the promise of provider-led managed care, My Health and its North Carolina health system owners have decided that they do not want to disturb the management of care for over 1.6 million North Carolina Medicaid beneficiaries during this global pandemic,” the motion reads. Aetna also asked for a dismissal given My Health’s decision, the motion read.

The dismissal means there are no pending challenges involving the awarding of the managed-care contracts, a DHHS spokesperson said Tuesday.

DHHS Deputy Secretary Dave Richard, who oversees Medicaid, said this week in a news release that agency leaders are “pleased at this outcome and believe it affirms the integrity and fairness of the department’s procurement process.”

Under managed care, the state Medicaid program has moved most of its recipients from a traditional fee-for-service model to one in which organizations receive fixed monthly payments for every patient its providers see and treat.