N.C. medical home agency comes under scrutiny

Community Care of North Carolina, a not-for-profit agency that runs the state's much heralded Medicaid medical home program, is coming under scrutiny after a state auditor report found that the program was falling far short of achieving the savings it had predicted.

The state has since published a request for information seeking recommendations to improve its Medicaid program. A study has also been called for to determine whether the medical home practice model—that emphasizes increased access and coordinated care—does in fact save money and improve health outcomes.

State Auditor Beth Wood's report found a general shortfall of $190 million, and showed that Community Care fell $39 million short of the $90 million savings it had projected. The program has been in place since 1998, and the audit report noted that “North Carolina is the home of the medical home.”

The program has been the subject of glowing reports from consulting and actuarial firms. In December 2011, a report from the Milliman actuarial firm calculated that the program had saved the state $984 million between fiscal 2007 and 2010.

But the audit found flaws in the Milliman report, stating that it is “based on assumptions and adjustments to data.”

“For instance, it adjusts the health status of relatively healthy adults and children in CCNC to be comparable to non-CCNC participants,” the audit report stated. “However, this requires an assumption that the CCNC participants are much unhealthier before comparing the projected costs of the theoretically unhealthy population to the non-CCNC population. While such an exercise may be actuarially sound, it does not provide the same quality of data that could be derived from medical research.”

Among the audit report's recommendations is a suggestion for the state to engage medical researchers to perform a scientifically valid study based on actual data to determine whether the CCNC model saves money and improves health outcomes.

In its written response to the report, the North Carolina Department of Health and Human Services said it agreed with the recommendation, noting that, “as we work to control costs and improve the quality within the Medicaid program, it is critically important that the data available is analyzed by a reputable research organization..”

Researchers have long criticized medical home studies as being poorly designed. Most recently, an Annals of Internal Medicine analysis of previously published studies on medical homes found that only 19 out of 5,731 reports contained the data on effectiveness that the researchers were looking for.

A representative from the DHHS could not be reached for comment.