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Questioning the Widely Publicized Savings Reported for North Carolina Medicaid
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Questioning the Widely Publicized Savings Reported for North Carolina Medicaid

Al Lewis, JD
Savings claims for Community Care of North Carolina raise many questions, concerning both arithmetic/epidemiologic plausibility and omission of presumably authoritative but contradictory source materials/citations.
Perhaps there is another explanation for this substantial differential, but, as with the utilization figures themselves, one must question how a state saving this much money managing large majorities of the adult and children’s populations through CCNC could nonetheless be as high cost overall for those same 2 beneficiary categories when all members are included.

Implications for Policy

Many states are considering or implementing programs similar to this one, based partly on these consistently positive reports.15 The pending federal subsidy of $9-to-$1, which contributes to that momentum, is itself based partly on previous North Carolina reports.16 Yet this commentary has raised many questions about these conclusions. There is no reason to believe that CCNC and its consultants are not acting in good faith when trying to determine the impact of their program. It is also possible that the consultants did not purposefully overlook the contradictory data but rather were simply unaware of it. Therefore, now that most North Carolina Medicaid eligible non-disabled adults and children are in CCNC and now that the discrepancies with public statewide data are apparent, the recommendation would be to redo the analysis on a full statewide basis, reconciling the savings and admission reduction claims with the state and federal data cited above and/or clearly explaining why seemingly authoritative statewide and state-to-state data on medical event rates and costs would not apply.

To view the Milliman and Community Care of North Carolina rebuttals go to:

Author Affiliation: From Disease Management Purchasing Consortium, Waltham, MA.

Funding Source: None.

Author Disclosures: The author reports that he presented this material at the 4th National Medical Home Summit, Thomas Jefferson University School of Population Health, Philadelphia, PA, February 27, 2012.

Authorship Information: Concept and design; acquisition of data; analysis and interpretation of data; drafting of the manuscript; critical revision of the manuscript for important intellectual content; and statistical analysis.

Address correspondence to: Al Lewis, Disease Management Purchasing Consortium, 890 Winter St, Ste 208, Waltham, MA 02451. E-mail:
1. Cosway R, Girod C, Abbott B. Analysis of Community Care of North Carolina Cost Savings: Milliman Report for the North Carolina Division of Medical Assistance. Published December 15, 2011. Accessed December 16, 2011.

2. US Department of Health & Human Services. Agency for Healthcare Research and Quality Healthcare Utilization and Quality Project. http:// Published 2009. Accessed May 2011.

3. MACPAC June 2011 Report to the Congress: The Evolution of Managed Care in Medicaid. Medicaid and CHIP Payment and Access Commission. Revised June 25, 2011. Accessed September 8, 2011.

4. Peikes D. Medical Home Evaluations: Why They Fail, How to Structure Them. Webinar for the Medical Home Audioconference Series. Mathematica Policy Research, Inc. Published May 26, 2010. Accessed May 26, 2010.

5. Lewis A. Fictional outcomes reporting: the “back story” of the North Carolina Medicaid PCMH and other demonstrably invalid outcomes. Presented at: The Sixth National Medicaid Congress; June 13-15, 2011; Washington, DC. index.html. Accessed June 17, 2011.

6. Brown R. Strategies for Reining in Medicare Spending Through Delivery System Reforms: Assessing the Evidence and Opportunities. Mathematica Policy Research. The Henry J. Kaiser Family Foundation. Published September 2009. Accessed October 1, 2009.

7. The Henry J. Kaiser Family Foundation. Medicaid Enrollment: June 2010 Data Snapshot. Kaiser Commission on Medicaid Facts. Published February 2011. Accessed April 15, 2011.

8. Ellis ER, Roberts D, Rousseau DM, Schwartz T. The Kaiser Commission on Medicaid and Uninsured. Medicaid Enrollment in 50 States: June 2008 Data Update. Published September 2009. Accessed November 11, 2011.

9. Al Lewis. Community Care of North Carolina: the Disease Management Care Blog isn’t going to quote it without a big caveat. Disease Management Care Blog. Published February 5, 2009. Accessed February 5, 2009.

10. Lurito K. CCNC/ACCESS Cost Savings–State Fiscal Year 2005 and 2006 Analysis. Phoenix, AZ: Mercer Government Human Services Management Consulting. September 19, 2007.

11. Reid RJ, Larson EB. Financial implications of the patient-centered medical home. JAMA. 2012;308(1):83-84. doi:10.1001/jama.2012.7661.

12. Burns J. North Carolina PCMH’s data offer promise, spur debate. Managed Care. 201203/index.php#/26. Published March 2012. Accessed March 3, 2012.

13. Schoen C, Fryer A-K, Collins SR, Radley DC. State Trends in Premiums and Deductibles, 2003–2010: The Need for Action to Address Rising Costs. The Commonwealth Fund. Published November 17, 2011. Accessed December 3, 2011.

14. The Henry J. Kaiser Family Foundation. Medicaid-to-Medicare Fee Index, 2008. The Henry J. Kaiser Family Foundation. Published 2008. Accessed March 12, 2012.

15. Robeznieks A. Remodeling required. Modern Healthcare. 1140. Published February 18, 2012. Accessed February 18, 2012.

16. The Henry J. Kaiser Family Foundation. Medicaid’s New “Health Home” Option. Published January 2011. Accessed October 23, 2012.
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