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Public Policy Update – LME MCO Consolidations and Appendix K Flexibilities

LME MCO Changes 

North Carolina’s six Local Management Entities Managed Care Organizations (LME MCOs) which are responsible for the regional management of a unified system of intellectual and/or developmental disability, mental health, and substance use services are undergoing consolidation and the realignment of some counties before the implementation of the Tailored Plans in July of this year.  

The most recent state budget bill authorized the NC Secretary of Health and Human Services to reduce the number of LMEs to no fewer than 4 and no more than 5. The Secretary released a statement giving three considerations for reducing the number of LMEs and the decisions that were made about consolidation and county realignment:  

  1. What is best for the people served and for providers?  
  2. What will promote whole-person care and move NC faster to Tailored Plans?  
  3. What will reduce complexity and make things easier for people?  

That statement outlined the consolidations that are now underway: Sandhills, Eastpointe, and Trillium will consolidate into a single LME MCO as of February 1, 2024. Trillium’s CEO will lead the newly consolidated organization. People who get services through their LME MCO in Guilford, Randolph, Montgomery, Moore, Lee, Hoke, Richmond, Anson, Scotland, Robeson, Sampson, Duplin, Wayne, Lenoir, Greene, Wilson, Edgecombe, and Warren counties were notified about this change in January and should receive their new Medicaid cards early in February.  

Three counties that were formerly part of these merging LMEs have realigned with other LMEs as well: Davidson County has moved to Partners Health Management; Harnett to Alliance Health; and Rockingham to Vaya Health. These changes are also effective February 1, 2024, and members should receive their new cards soon. 

LME MCO members in the affected counties should receive the same services and be able to use the same providers during and after this consolidation without disruption Please contact the LME MCO you are assigned to if this is not the case, or you are having other problems accessing services.  

The revised map of LME MCOs is visible here in this NCDHHS provider memo.   

Does consolidation impact the Tailored Plan launch? 

The NC Department of Health and Human Services has stated that consolidation and realignment will not alter the plans for launching Tailored Plans on July 1, 2024. You can read more about Tailored Plans and Medicaid Transformation on our Medicaid Transformation page.  

Appendix K Flexibilities: Many Flexibilities are now Permanent. 

What is Appendix K and why did we need “flexibilities” during the pandemic?

During the COVID-19 public health emergency, states with Medicaid Home and Community-Based waivers and other Medicaid services were allowed to make temporary changes to the way those services were delivered to ensure the health and safety of participants, families, and service providers.  Most of these changes allowed for services to continue during the pandemic, like allowing relatives to provide more hours of service or some services being delivered by telehealth. In other cases, new services were added, like home-delivered meals which support people being able to live in communities of their choice. North Carolina has been permitted to extend these flexibilities until February 29th, while final revisions to the new guidelines are being reviewed by the Federal government. Read the NC DHHS announcement.   

Once the public health emergency came to an end last year, North Carolina sought permission from the Federal government to continue many, but not all, of the Medicaid flexibilities that were allowed during the pandemic, including some of those allowed for Innovations, CAP-C, and the TBI waivers under Appendix K (the federal regulations that allow for waiver changes under certain circumstances). Those K flexibilities are specific to Innovations Waiver services, not other I/DD services under Medicaid, including 1915i as well as state-funded services.  A full list of ALL the Medicaid flexibilities across all Medicaid services is listed here.   


Which Appendix K flexibilities are now permanent?  

  • Home-delivered meals (up to seven meals per week/one per day). 
  • Access to real-time, two-way interactive audio, and video telehealth for Community Living Support including: 
    • Day Support 
    • Supported Employment 
    • Supported Living and Community Networking to be delivered via telehealth. 
  • Allow members to receive services in alternative locations: hotels, shelters, churches, or alternative facility-based settings under specific circumstances. 
  • Remove the requirement for members to attend the day supports provider once per week. 
  • Increase the Innovations waiver cap from $135,000 to $184,000 per waiver year. 
    • This is a change from the initial requested increase of $157,000 and takes into account the Innovations Direct Care Worker wage/rate increase. 
  • Allow parents of minor children receiving Community Living and Support to provide this service to their child who has been indicated as having extraordinary support needs up to 40 hours/week. 
  • Allow Supported Living to be provided by relatives. 
  • Allow relatives as providers for adult waiver members to provide above 56 hours/week, not exceeding 84 hours/week of Community Living and Supports.  
  • Community Navigator service will be available only to members who self-direct one or more of their services through the agency with choice or employer of record model. 


Any flexibilities that are not included in this list would fall under the clinical guidelines of the Department of Health Benefits (DHB) for the service they are receiving and the LME MCO the person is a member of.  So, for example, if the Appendix K flexibilities allowed for families to provide more than 40 hours of service a week to minors/84 hours to adults, but that Appendix K flexibility ends March 1, the family would need to work with their LME MCO and a provider to get direct support staff coverage for those hours. If their LME allows exceptions to policies, the family/member would need to appeal to the LME MCO or they would be providing unpaid supports. There is no guarantee any requests for exceptions to these policies will be granted.  

The NC DHHHS released updated NC Medicaid Guidance on the Sunsetting of Innovations Waiver Appendix K Flexibilities on January 31. Click here to view the info page.


Relative as Provider (RAP) Policies  

When the Appendix K waiver policy changes were submitted to the federal government, the word “parent” was substituted for the word “relative” in the policy regarding family members being allowed to provide paid direct care services. This change was not intentional and is currently being reviewed and corrected. If you see policies that say “parent” please know that it will likely be changed to “relative” once the federal government approves the change.  


What does this mean for other services like 1915i?  

1915i services policies about Relative as Provider are not part of the Appendix K flexibilities, and the same is true for the number of hours of service someone may get in 1915i. That is determined by the hours limits in the 1915i clinical coverage policy and by an individual’s service plan/assessment. ASNC staff have asked for DHB to clarify the guidelines around RAP for 1915i services.  Appendix K policies also do not apply to state-funded services which have clinical coverage policies, separate from those policies for Innovations and other Medicaid services.   

Please note that if a person has an Innovations waiver slot, they are not getting assessed for 1915i and would not be receiving 1915i services on top pf Innovations services. Innovations is intended to be an all-inclusive set of IDD services. While we understand that it may not include every single thing a person needs for community living, it’s not possible to combine Innovations with the community-based supports found in 1915i services.  It’s an either/or: either you have a waiver slot, or you are Medicaid eligible and eligible (or receiving) 1915i services.  

If you are interested in finding out if you are eligible for 1915i services read our blog, or contact your Tailored Care Manager or your LME MCO  to request an assessment for 1915i services. The person receiving 19159i services must be eligible for Medicaid to get 1915i.  

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