NCMS Tells Medicaid Reform Advisory Group To Expand Existing Value-Driven Models of Care

The President of the North Carolina Medical Society (NCMS), Devdutta Sangvai, MD, associate chief medical officer for Duke University Health Systems, told the Medicaid Reform Advisory Group on Wednesday that it is possible to achieve the state’s goals of reforming the Medicaid system using existing infrastructure, and on a timeline consistent with Governor McCrory’s objectives, in less time than it would take to implement a traditional managed care program.

“Change is not easy,” Sangvai told the panel. “We encourage you to look at the infrastructure that’s been put in place to implement new value-driven systems for the private sector and Medicare.”

Sangvai was one of 50 representatives of health care groups and individuals who addressed the panel during their all-day public forum in Raleigh.

Adoption of value-driven principles, which are already proving effective in Accountable Care Organizations (ACO) like Coastal Carolina Health Care in New Bern, would accomplish the state’s goals of budget predictability and sustainability for Medicaid as well as treating the whole patient. Coastal Carolina recently shared quarterly results of 25-30 percent savings for their Medicare/Medicaid dual eligible patients.

Shifting from the fee-for-service model, which has led to the current “silos” where the basis for payment is on the volume of services delivered, to a reimbursement system based on coordinating care across all providers to serve the patients’ entire spectrum of needs would help break down the silos and provide powerful incentives for everyone to work together. 

As Sangvai pointed out, “Right now there are Medicare-approved ACOs that geographically cover 50 percent of North Carolina’s population. With the addition of other qualified ACOs, the large majority of Medicaid recipients could be in a value-driven arrangement in less time than it would take to implement a traditional managed care program.”

Part of that success would depend on NOT dividing the state into regions as the North Carolina Department of Health and Human Services has stated it is considering. Such regionalization would undermine competition and prevent Medicaid from using private sector and Medicare infrastructure already in place.

As the ACO gains expertise it would begin a gradual shift to increase the financial risk to providers when costs exceed projections.

Dr. Sangvai concluded: “It is important to consider that this approach to payment reform is being embraced by private sector plans, primarily because they are facing the same challenges as Medicaid, and strategies of managed care companies of the past 30 years have not been successful.”

The NCMS will continue to work as partners with the NC Department of Health and Human Services as well as other stakeholder groups to strengthen the state’s Medicaid program and increase access for our state’s most vulnerable citizens.


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  • Kerry Willis MD

    Medicaid ACO’s are a valid idea if done properly. The trick is in creating savings above the administrative costs of saving money going from a totally un-managed population to a managed system. Risk based contracting without mature highly skilled systems and it support is unreal to consider.

  • no organizational model will succeed until the individual consumer of health care has some vested interest in and takes some responsibility for his own personal health. There is not enough money, manpower or time to bring back to health someone who pays no mind to his or her own health!

  • matthew mlot

    The cost structure of Medicaid is not sustainable as a business model no matter how you dress it up.

    The money in the pot is not enough to cover costs, and the solution seems to force inadequate reembursement on physicians. WHen will our medical leadership realize this?

  • Cathy M. Poole

    Compare the profits of insurance companies and CEOs versus the income losses experienced by physicians, including our best medical institutions such as Wake Forest Baptist Medical Center. Healthcare providers are under constant threat of penalty by federal regulations requiring tremendous expenditures for IT hardware/software and additional staffing. The looming ICD-10 mandate adds to the financial and physical stress.

    Shifting financial risk to providers is unconscionable. Naturally this approach is being embraced by private sector plans. Our most vulnerable citizens are our healthcare providers.

  • “As the ACO gains expertise it would begin a gradual shift to increase the financial risk to providers when costs exceed projections.”

    I thought insurance handled the risk, not providers. I doubt we’ll be handed any reward for assuming risk, talk of “bonuses” to the contrary.

    As far as the patient-physician relationship, will those in ACOs be required to disclose to the patient that they are at financial risk for providing care?