Alliance Health outlines Tailored Plan rollout and $5M unspent balance, board seeks accounting

Alliance Health officials told the Durham County Board of County Commissioners on Aug. 5 that its Tailored Plans began operating in July 2024 and that a combination of factors produced lower-than-expected County spending in FY23–FY24.

Rob Robinson, chief executive officer of Alliance Health, described the Tailored Plans as integrated managed‑care products covering physical and behavioral health, long‑term services and supports, and pharmacy benefits for Medicaid recipients. Kelly Goodfellow, Alliance’s chief financial officer, said the organization historically fully spent County contract funds until FY21; when Alliance received an unexpected $22.6 million in state COVID funding to serve uninsured individuals in FY22–FY23, that funding reduced the need to draw County dollars and left about $2.4 million unspent for FY22–FY23. Goodfellow said additional dynamics — including Medicaid expansion in December 2023, direct‑care workforce shortages and provider capacity limits — further reduced the use of County funds and resulted in an estimated $5 million balance of unspent FY24 County funds.

Alliance described steps taken effective July 1 to align payment and benefit structures, including matching state rates to Medicaid rates where services overlap and increasing certain State‑only service rates by 5–25 percent. Sean Schreiber, Alliance’s chief operating officer, said Alliance is meeting Tailored Plan network adequacy requirements, has contracted with all three county opioid‑treatment providers to serve Medicaid and uninsured clients, and has expanded child and adolescent services and community‑based supports for justice‑involved adults. Alliance reported that roughly 16,178 Durham residents received behavioral‑health services via its provider network; Duke provided integrated care management to about 1,100 Alliance Tailored Plan members; and 568 Durham residents received evidence‑based opioid treatment. Alliance also reported a one‑time state allocation of $141,000 was used at Gurley’s Pharmacy for medications for uninsured individuals, including suboxone.

Commissioner Wendy Jacobs pressed for diligent monitoring so unspent funds can be reallocated during the fiscal year, and the Board directed Alliance to return a detailed proposal on the FY23–24 unspent funds and for Alliance to propose a better intrayear process to deploy unused funds.

The work session did not include a final vote on Alliance’s FY2025 contract. Staff later placed a FY2025 Alliance Health contract of $6,503,803 on the consent list for the Aug. 12 regular session; the Board asked staff to hold that item pending the additional information from Alliance.

What’s next: Alliance will provide a detailed accounting of FY23–24 unspent funds and suggested procedures for intrayear reallocations; the Board may revisit the FY2025 contract at its Aug. 12 regular session once staff and Alliance supply the requested information.