Special Medicaid Update Oct. 09
This special publication of the Community Care Chronicle highlights important Medicaid changes for the
2009-2010 fiscal year. For further information, please see the Division of Medical Assistance web site:
The final Budget approved in August by the State General Assembly assumes almost $70 million in cost
savings to Medicaid from care management through Community Care in State Fiscal Year 2010. Putting a
number on projected savings, the Budget expects $78 million in cost savings in Fiscal Year 2011 from
expanding Community Care's care management efforts. The Budget also eliminates the Per Member/Per
Month payments to CCNC networks and providers for Health Choice Enrollees, a $1.8 million cut over two
years. In a small bit of good news, lawmakers appropriated $4 million over the next two years to expand the
HealthNet program, which provides access to care for low-income, uninsured patients through Community
Care Networks.
Overall, budget writers cut $3 billion in state funding, including reducing Medicaid rates by $76.5 million in
FY2010, and $82.2 million in FY2011. Secretary of DHHS Lanier Cansler has the final authority on how
rates will be restructured to meet the targeted reductions. Controversial Community Support Services under
Mental Health will begin being phased out, and Personal Care Services were cut by $100 million over the
two years. The Budget also cut $40 million each year from state funding for mental health services provided
through Local Management Entities (LMEs), as well as $3 million in cuts in administrative funding for LMEs.
DHHS is also expected to reduce Prescription Drug costs under Medicaid by $25 million in FY2010, and
$22 million in FY2011, by enhancing the use of the Prescription Advantage List, greater use of Generics
and greater rebate collections. If savings targets are not met, the Department has authority to implement a
Preferred Drug List (PDL) for all classes.
The Budget also includes $5 million each year to increase the capacity of safety net organizations to
provide care to low-income and uninsured North Carolinians.
Medicaid is cutting its reimbursement rates but not for primary health care services. As the result of this
summer's State Budget cuts, effective October 1, 2009, Medicaid rates are being cut by 9 percent for all
codes except 89 codes covering primary care. The Division of Medical Assistance was charged with finding
$200 million in budget savings when the General Assembly passed its final budget, and DHHS leaders have
instituted an expected $76 million in cuts for this year by setting fee codes at 86.5 percent for the
nonexempt codes, and by cutting DRGs to non-state-owned hospitals by 6 percent. Please see the charts outlining the cuts in the October Medicaid Bulletin.
FQHCs, RHCs and school-based sites were also spared cuts. Rate reductions (annualized over nine
months) will be applied to all public and private Medicaid providers except for federally qualified health
centers, rural health centers, school-based and school-linked health centers, State institutions, hospital
outpatient, pharmacy, hospice and the non-inflationary components of the case-mix reimbursement system
for skilled nursing facilities. Critical Access Hospitals will continue to have their inpatient and outpatient
Medicaid costs settled at 100 percent.
Updated fee schedules have been published for all current rates on the DMA web site. Providers are
reminded to bill their usual and customary rates when submitting claims to NC Medicaid.
Primary Care Physicians codes for Physician Evaluation and Management Services can be billed by other
providers. The rates for these services were not reduced and are held at the Jan. 1, 2009 rate. The 9% rate
reduction was applied to all of the other Physician Services Procedure codes rendering a 4.9% overall
program reduction.
On or before October 1, Medicaid enrollees should have received their new gray cards, replacing the
previously used blue, pink, green, and buff-colored MID cards. The new cards will be issued only once a
year (no longer on a monthly basis) and will include the individual's name, MID number, and CCNC/CA
primary care provider information (if applicable), and the text will be in English or Spanish, as designated by
the language indicator, according to Jonnette Earnhardt, DMA's Eligibility Information System Supervisor.
Please see the full DMA Administrative Letter.
The cards no longer will have eligibility dates, and the card will no longer serve as proof of recipient
eligibility. At each visit, providers must verify the cardholder's:
· Identity (if an adult)
· Current eligibility
· Medicaid benefit category
· CCNC/CA primary care provider information
· Other insurance information
However, once eligibility has been verified during a particular month, the provider may assume that the
cardholder's identity, eligibility, PCP and other insurance information remains valid for the remainder of that
month.
Providers can check eligibility online through the new NC Electronic Claims Submission / Recipient
Verification web tool (instructions available online), Automatic Voice Inquiry System (AVRS) or through the
real time electronic Eligibility Verification System (270/271 transaction through Value Added Networks
(VANS) software.) EDS also has a team in place that will temporarily (90 days) take eligibility calls from
providers.
Enrollees will be getting a letter updating them on several budget initiatives that will impact them beginning
October 1, 2009. Please read the full notice. The letter sent to patients will be in English or Spanish as
designated by the casehead payee language preference indicator.
Sara Harris, with DMA's Provider Services, encourages network and local leaders to keep up with recent and upcoming changes in the state's Medicaid program, including requiring electronic payments and claims
and increased enrollment fees.
The 2010-11 State Budget includes a mandate to DMA to begin collecting a $100 enrollment fee from
providers upon initial enrollment with the N.C. Medicaid Program and at 3-year intervals when the provider is
re-credentialed. This process began on September 1, 2009, and will apply to applications received on or
after that date. Initial enrollment is defined as an in-state or border-area provider who has never enrolled to
participate in the N.C. Medicaid Program. The provider's tax identification number is used to determine if the
provider is currently enrolled or was previously enrolled.
In its effort for 'Paperless Commerce,' Medicaid will require all claims to be filed electronically as of October
2, 2009, and Medicaid will no longer issue paper checks for service payments - instead all payments also
will be made electronically. All payments will be made electronically by automatic deposit to the account
specified in each providers Electronic Funds Transfer (EFT) agreement. The electronic funds mandate was
effective with the second checkwrite in September. Providers should submit an EFT Authorization Agreement for Automatic Deposits form, available on DMA's web site, or contact EDS at 1-800-688-6696 or
919-851-8888 with any questions.
Further details about electronic claims submissions can be found in the July 2009 Medicaid Bulletin and the September Special Bulletin.
In addition, MedSolutions, the new prior approval fiscal agent for certain radiology procedures, including CT,
MR, PET scans, and ultrasounds, has contacted providers about their services. Please refer providers to the
September bulletin or view their company's information at www.medsolutionsonline.com. Providers
who have questions also can call DMA's Practitioner and Clinic Services at 910-355-1883.
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