N.C. Saves Nearly $1 Billion in Medicaid with Medical Homes

Governor Beverly Perdue announced late in December that North Carolina's Medicaid program saved nearly $1 billion between 2007 and 2010 by implementing medical homes. The state-commissioned Milliman study found that North Carolina avoided spending $984 million through enrolling 1.1 million Medicaid beneficiaries in medical homes.

Medical homes provide coordinated health services, especially preventive and primary care services, to improve health outcomes and lower health costs. In the press release, Lanier Cansler, N.C. Department of Health and Human Services, said the study is “further validation that we are on the right track to ensuring high-quality medical care with the most efficient use of taxpayer dollars.”

According to  Milliman, an independent actuarial and consulting company, cost savings increased as more Medicaid enrollees participated in the medical homes —$103 million in fiscal year 2007 (July 1, 2006-June 30, 2007); $204 million in FY 2008; $295 million in FY 2009; and $382 million in FY 2010.

Importantly, the study found that savings were realized for the sickest Medicaid enrollees, those eligible for Medicaid under the aged, blind and disabled criteria. These persons are generally less healthy and more costly than other Medicaid enrollees. Milliman found that in FY 2006, medical home enrollment of this population cost the state an additional $82 million. But by FY 2010, enrollment of these Medicaid recipients into medical homes had paid off – and the state avoided $53 million in costs.

Community Care of North Carolina is the non-profit partner working with state government to implement the medical home model. The state is broken into 14 networks of providers. The CCNC model targets chronically ill Medicaid enrollees with complex care needs who usually require care in multiple settings.  A standardized care management process provides critical interventions that empower the patient/caregiver with self-management skills.  The ultimate goals of CCNC medical homes are to promote better health outcomes for patients and to decrease utilization of inpatient and emergency department services.

Stateline reported that more than 3,000 practices and 15,000 doctors and nurse practitioners are accredited by the National Committee for Quality Assurance as providers of patient-centered medical homes. NCQA accredited medical homes in North Carolina number 228, or almost 8 percent of the total.

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