July 7, 2015

Let’s compare Managed Care Organizations with ObamaCare style Accountable Care Organizations.

MCOs already save taxpayers money in Medicaid mental health in North Carolina.

From the News and Observer -”There are nine local management entities/managed care organizations, or LME/MCOs, responsible for managing the mental health, substance abuse and intellectual/developmental disability care for residents of our 100 counties.

As a system, these organizations are successfully meeting the mandates our General Assembly has set for the Medicaid program, providing budget predictability and generating savings in excess of $171 million in Medicaid costs over the past two years. The entire public behavioral health system operates on a capitated basis, meaning that the LME/MCOs receive a pre-determined amount of money per month for each individual eligible for Medicaid care. In turn, they bear full financial responsibility for providing an established level of care to some of the most vulnerable of our state’s Medicaid recipients.” (N&O)

But ACOs in North Carolina actually cost Medicare more money.

From Wake Forest University -”So far, Medicare ACOs in North Carolina have not generated substantial savings. Instead, the eight North Carolina ACOs participating in Medicare in 2012 or 2013 spent an average of $677,272 more than what the federal government estimated that traditional Medicare would have cost. In total, only three of the eight ACOs saved money, but those savings were fairly substantial. While Medicare ACOs have done better in other states, the current North Carolina participants are having trouble hitting their savings stride.” (WFU)

Legislators would be wise to avoid putting all our eggs in the ACO basket. Competition between managed care and ACOs makes more sense.