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Appeals Dropped in Lawsuit Challenging North Carolina’s Medicaid Managed Care Contract Award

The NC Court of Appeals granted a request from two insurance providers to voluntarily dismiss appeals

January 24, 2022 – The North Carolina Court of Appeals granted a request from My Health by Health Providers and Aetna to voluntarily dismiss appeals of their suit over contracts issued by the North Carolina Department of Health and Human Services (NCDHHS) for Medicaid Managed Care.

The legal dispute started in 2019 as the two insurance providers were challenging contracts awarded to AmeriHealth Caritas North Carolina Inc., Healthy Blue of North Carolina, UnitedHealthcare of North Carolina Inc., WellCare of North Carolina Inc., and Carolina Complete Health Inc. The providers filed a lawsuit that challenged the state regulators’ decision-making process when awarding Medicaid contracts. 

Wednesday, the two healthcare providers filed paperwork asking the Appeals Court to dismiss their appeals. The voluntary dismissal comes less than a week before lawyers from both sides of the case were scheduled to plead their cases in front of the North Carolina Court of Appeals. 

The NCDHHS was pleased with the dismissal. “We are pleased at this outcome and believe it affirms the integrity and fairness of the department’s procurement process,” said Deputy Secretary for NC Medicaid Dave Richard, “We look forward to continuing our focus on delivering innovative and whole-person care to North Carolinians through Medicaid Managed Care.”

The withdrawal was not based on the merits of the appeal, rather on My Health’s desire to avoid disruption of care.

“Although My Health still believes in the merits of its appeal and the promise of provider-led managed care, My Health and its North Carolina health system owners have decided that they do not want to disturb the management of care for over 1.6 million North Carolina Medicaid beneficiaries during this global pandemic.”

In light of My Heath’s statement, Aetna also decided to withdraw its appeal. 

North Carolina’s Shift to Medicaid Managed Care

Legislation was passed in 2015 that began North Carolina’s transition to managed care. Since then, NCDHHS has worked with health plans, providers, community-based organizations, and other stakeholders on the transformation.

As of July 1, 2021, approximately 1.6 million Medicaid beneficiaries in the State started receiving the same Medicaid services through new NC Medicaid Managed health plans.

“July 1 marks a significant milestone with the official launch of Medicaid Managed Care in North Carolina,” said North Carolina Department of Health and Human Services Secretary Mandy K. Cohen, M.D. “From the start of this process, our goal has been to improve the health of North Carolinians through an innovative, whole-person centered, and well-coordinated system of care. Today moves us closer to that goal as we begin to implement this important program.”

For more information on Medicaid Managed Care in North Carolina, you can click here.

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