Eastpointe and Sandhills to merge into second-largest NC Medicaid mental health provider [The News & Observer (Raleigh)]

News & Observer (Raleigh, NC)

Two North Carolina Medicaid plan providers announced Thursday they had reached an agreement to consolidate, becoming the second-largest of such behavioral health organizations in the state.

Eastpointe and Sandhills Center will combine to manage public behavioral health benefits for more than 100,000 members in 21 counties, according to a news release issued Thursday by the organizations. It will have a budget of approximately $1.4 billion and employ almost 900 people, the release said.

The proposed consolidation, which is subject to approval by the state’s Department of Health and Human Services, comes amid persistent delays in authorization for such organizations to administer plans to Medicaid beneficiaries with niche needs.

Patsy O’Donnell, a DHHS spokesperson, said “ensuring that all North Carolinians have access to quality whole-person health care is central to the Department’s mission.”

“This is especially true when it comes to management of the Medicaid Tailored Plans that will serve people with complex behavioral health conditions, Intellectual/Developmental Disabilities and traumatic brain injury,” she said in an email.

“To that end and pursuant to our authority, we will evaluate the intent to consolidate the two Local Management Entity/Managed Care Organizations (LME/MCOs) and work with the entities on a path forward that best serves improving outcomes for the people of our state.”

Managed Care

Eastpointe is a managed care organization that covers large swaths of eastern North Carolina, including Edgecombe, Robeson, Wilson and more. Sandhills is a managed care organization covering parts of the state’s southwestern areas, including Guilford, Randolph and Montgomery counties.

Managed care organizations work with providers to help uninsured people and those with Medicaid to access behavioral health care.

The consolidated organization will serve Anson, Davidson, Duplin, Edgecombe, Greene, Guilford, Harnett, Hoke, Lee, Lenoir, Montgomery, Moore, Randolph, Richmond, Robeson, Rockingham, Sampson, Scotland, Warren, Wayne and Wilson Counties.

It will retain all of the two companies’ employees and office locations and will be headquartered in Moore County, operating under the Sandhills Center name until a new name is selected, according to the release.

Currently, the two organizations’ board members include 19 county commissioners. The consolidated organization will pull about half of its board members from each organization.

“We are excited to join forces with Sandhills Center,” said Sarah Stroud, who led negotiations for Eastpointe as its current CEO and will lead the consolidated organization as CEO, according to the release.

“This consolidation perfectly positions us to successfully compete in North Carolina’s changing Medicaid landscape. Our combined talent and geographic reach will give us an unmatched ability to deliver quality benefits and support our provider partners while also meeting the objectives of the state’s policymakers.”

Current CEO for Sandhills, Anthony Ward, appointed in April, said in the release that the consolidation “offers the best opportunity to preserve local management of services for individuals in our communities.”

Behavioral health care plan delays

In North Carolina, people on Medicaid used to receive care via a fee-for-service mechanism by which the state reimbursed providers for services. But the state shifted to Medicaid managed care over two years ago and beneficiaries now receive care from a standard plan offered by insurance companies, which reimburse providers, while the state pays a fixed per-member cost.

Some Medicaid beneficiaries, including those with intellectual or developmental disabilities and people with substance use disorders and traumatic brain injuries, remain on the fee-for-service system.

The state planned to roll out tailored plans offered by one of six of the current managed care organizations for these individuals with behavioral health needs. But the implementation of these tailored plans, which had been scheduled for October, and which would serve about 160,000 people and offered the same services as the standard plans in addition to more niche services, was delayed in July. A new start date has not been determined. The program had previously been delayed from April to October.

During a legislative committee hearing in March, DHHS Secretary Kody Kinsley said delays were largely due to managed care organizations not having large enough provider networks to meet member needs once the tailored plans roll out.

It’s unclear whether the consolidation of Eastpointe and Sandhills stems from these delays. Asked about this, O’Donnell said that “without having seen the specific proposal at this time, it is hard for NCDHHS to comment on the consolidation.”

Meanwhile, representatives for the local management organizations said they were having difficulties contracting with Charlotte-based Atrium Health, which affects their network of providers, as previously reported by The News & Observer.

DHHS, in its July release announcing the delay, said “while gaps remain in provider networks, progress has been made” by the organizations on technical capabilities.

Also in limbo is the implementation of Medicaid expansion, which would open the door for thousands of low-income residents to enroll in the federal-state insurance plan. Expansion in North Carolina won’t happen until the state budget becomes law, with a stalemate between the Senate and the House causing delays.