Streamlined Medicaid for NC foster kids hits a wall

Advocates hope NC plan can help children in foster care

By Rose Hoban

A few years ago, Gaile Osborne and her husband took in several foster children. 

Osborne, a special education teacher, should have been the perfect foster parent. There was one problem. Osborne and her family lived in Buncombe County. The children were originally from Alamance County.

That meant Osborne was unable to get the mental health services her foster children needed from Vaya, the local mental health management entity (known as an LME-MCO) that covers western North Carolina. All children in the state’s foster program are eligible for Medicaid coverage even when families who bring them into their lives have private insurance coverage.  Often the Medicaid coverage is more comprehensive than what a commercial plan would provide.

“I was barking at Vaya saying, you know, ‘This is a Medicaid kid. This kid is now in your catchment area,’” Osborne recalled recently. 

Nonetheless, she kept hearing: “‘I’m sorry, there’s nothing we can do. I’m sorry, there’s nothing we can do.”

“What do you mean, there’s nothing you can do?” Osborne would retort.

The reason there was “nothing” the local LME-MCO could do was because when foster children move from one county to another, they continue to receive their Medicaid mental health services from the mental health management entity in their home county. 

In the case of those in Osborne’s care, that was almost 200 miles away. 

“You know, we desperately needed help,” Osborne recalled, noting that the children in her household needed therapy. “We had nothing, not a single support.”

It was, in part, because of that experience that Osborne became an advocate for foster children, getting involved with the Foster Family Alliance of North Carolina. Eventually she became the executive director of the organization that advocates for foster children, who receive Medicaid while they’re 18 and younger and even a few years more if they choose to remain in school. 

For all of her years of advocacy, though, one thing hasn’t changed in Osborne’s world. Namely, foster children still receive mental health services through the LME-MCOs in their home counties, no matter where they live.

A proposal moving through the General Assembly would change that, creating a statewide Medicaid plan to cover foster children. It would seem like a simple answer to a vexing problem, but the plan has hit roadblocks.

Coordination of care

LME-MCOs provide mental health care for people with more needs than the average patient. Foster kids fall squarely into that category. They’ve often experienced trauma, abuse or neglect and are dealing with all of the familial problems – such as substance use and violence — that landed them in the foster care system in the first place. 

They often, if not always, need some mental health services. Different LME-MCOs contract with different providers that are in their geographic areas, while the money to pay for those services flows through the LME-MCO to the people doing the actual therapies. If a child moves beyond their home area, while still getting mental health services through their home LME-MCO, the logistics can get complicated quickly. The money and the contracts remain at home, even if the child is many counties away.

Until now, the LME-MCOs haven’t coordinated across geographic areas to hand off the care of a child once they are in a different region. So, a child may only be eligible to see someone who’s contracted with their “home” LME-MCO. 

It’s been that way since the state changed to the statewide LME-MCO system in 2013. It’s been something that has frustrated legislators for years. It’s meant that foster parents often have to take time off of work, travel great distances and disrupt the lives of the children in their care to get to therapy sessions. Sometimes the distance is only one county away. Sometimes it’s across the state, which – in practicality – means it just doesn’t happen.

That frustrates Sen. Sydney Batch (D-Raleigh), who is a family law attorney and child welfare advocate in addition to her work in the legislature. 

“For the past 10 years, LME-MCOs have been tasked with taking care of the mental health and behavioral needs of a lot of our foster youth who have high acuity care and need a significant amount of resources attributed to their well-being,” Batch told NC Health News in an interview. “Having practiced in child welfare for the past 17 years, I have seen serious concerns with regards to the way in which children move from one LME-MCO to another without having continuity of care.” 

She said that the whole process would be more streamlined if the state would cover foster kids in a Medicaid plan that includes their mental health services no matter where they are in the state, so they can stay with their therapists, if needed, or change, if needed. They shouldn’t have to be constrained by bureaucracy created by the LME-MCOs, their advocates say. 

That’s what the Medicaid Children and Families Specialty Plan bill would do. If it passes, one or two agencies would bid to provide a statewide network for these children. Access to intensive in-home services, substance use treatment, residential care and other forms of therapy could follow the child across the state to where they’re living.

“This plan also focuses on whole family treatment,” said Karen McLeod, who runs Benchmarks, an umbrella non-profit organization that advocates for groups that provide care for children and families. 

“It provides support services for the family, the family can opt in or opt out, they don’t have to come into the specialty plan, but they have the option of coming in and that includes the siblings,” McLeod explained.

It’s something advocates have been seeking for years. 

“I think our system is broken, and kids are falling through the cracks,” Batch said. “I think that a plan of having one provider that is statewide to be able to deal with this very unique population… is by far the best way to deliver services to children.” 


The LME-MCOs have pushed back. 

The state gives each LME-MCO a set monthly amount for each person they manage. For each child moved into a statewide Medicaid plan, the LME-MCO would lose money, acknowledged Brian Perkins, senior vice president of strategy and government relations with Alliance Health, the LME-MCO that provides services in Cumberland, Durham, Johnston, Mecklenburg, Orange and Wake counties.

But Perkins also said the LME-MCOs aren’t worried about the money. They’ll lose some kids who don’t need as many mental health services and the money that follows them, he said. But any losses will be offset by extra dollars the LME-MCOs will receive for other children with more intense needs who the state will place onto specialized “tailored” Medicaid plans next year. 

“It would essentially be a wash in terms of the [monthly] rates because we would get a higher rate to cover a more complex population overall,” he said. 

His agency currently manages the care for around 8,100 of about 31,000 foster care children in the state. 

Perkins contended that relationships that LME-MCOs have with county departments of social services, which have legal custody of children in foster care, puts them in a better position to coordinate their care. He also argued that creating a statewide Medicaid plan would not address provider shortages across North Carolina. 

Perkins further contended that the statewide coverage issue isn’t that big of a problem. He claimed that only about 1 percent of children in foster care get tripped up when they are moved to different counties.

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