Budget Progress: No Medicaid Rate Cut for Physicians, So Far

The North Carolina Senate has passed their version of the proposed budget adjustments. Like the North Carolina House proposal, the Senate plan refrains from cutting Medicaid rates in order to fund education. This critical decision was supported by the North Carolina Medical Society (NCMS) and other physician advocacy groups.

The two budgets proposed by the North Carolina House and Senate differ dramatically, however. The Senate proposal takes a conservative approach to predict the real costs for the upcoming year as they hope to avoid another Medicaid shortfall as we begin the 2013 fiscal year. This effort requires an additional $230 million in funding for Medicaid, which was not funded in the House budget, along with a $100 million reserve fund for use in the event of higher than expected utilization during the next year. While this approach has implications for other smaller health-related programs within the budget, it sets a course for better budget predictability in the future.

As we go to press, additional Medicaid cash flow problems have come to light, which may jeopardize the status of Medicaid rates in the Conference Report. Budget leaders will spend the weekend trying to resolve these problems and work out differences between the two proposals. Please watch your email this weekend and early next week for action alerts related to the budget.


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