Budget votes expected today and tomorrow

After significant debate between both chambers of the General Assembly, a conference report on updates to the state budget was released late last evening. It is expected that the General Assembly will be in the process of voting on the budget over the next two days.

While there has been much reporting on the 7 percent teacher pay raises included in the budget plan, it is also important to understand the numerous changes and cuts made to the Medicaid program affecting you and your patients. Among others, key provisions in the budget include:


  • Includes stricter eligibility standards for future aged, blind and disabled applicants.

  • Implements a 3 percent rate reduction effective retroactively to Jan. 1, 2014 as well as an additional 1 percent reduction effective for services provided on or after Jan. 1, 2015 for services rendered to Medicaid and NC Health Choice recipients.

  • Postpones decisions on Medicaid reform, delaying those discussions to take place until a special legislative session in November, 2014.

  • Requires a study on the possible expansion of providers subject to the Health Care Cost Reduction and Transparency Act.

  • Includes more than $186 million for a Medicaid Contingency Reserve fund.


  • Creates a state-wide hospital base rate for inpatient services under Medicaid and the NC Health Choice programs equal to the lesser of the sum of $2,788 or the statewide median rate on June 30, 2014.

  • Effective Jan. 1, 2015 implements a reduction of 2.1 percent to the DRG case weighting factors for all DRG inpatient services payments rendered to Medicaid and NC Health Choice recipients.

  • Provides supplemental funding to the North Carolina Health Information Exchange (HIE) for hospital HIE integration fees.

  • Increases the State retention on assessments through the hospital GAP plan from 25.9 percent to 28.85 percent effective July 1, 2014.

  • Reduces the settlement for UNC Hospitals and Vidant for outpatient services to 70 percent of Medicaid costs effective July 1, 2014.

Other key changes

  • Additional funding for traumatic brain injury patients as well as a provision requiring the design of a 1915(c) waiver to add a new service package for Medicaid eligible patients with traumatic brain injury.

  • Includes a moratorium effective until June 30, 2016 on the issuance of licenses to home care agencies for in-home aid services.

  • Excludes nursing homes from the 3 percent rate reduction for 2014 and beyond.

NCMS will provide further analysis through its Legislative Summary to members in the near future. Tell us your thoughts below.


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  • Stephen Wall MD

    A RETROACTIVE medicaid reduction is really rubbing salt into the wound. We are being punished for taking care of the poor, the sick, the children. At the least, there should be no forced REPAYMENT by primary care and in fact, the 3% decrease should not happen in 2015, either. This will pull the rug out from medical practices that have taken care of hundreds of thousands of our citizens, many of whom will lose access to care and end up in emergency rooms at 4-5 times the cost or more.

  • The ACA states that primary care physicians will be paid at Medicare rates for Medicaid patients for the specified procedures for 2013 and 2014. I understand that the state can reduce Medicaid payments in 2014, but I don’t think they can reduce the ACA codes until AFTER 2014. At least and still follow the law. Any clarification on the statement “Implements a 3 percent rate reduction effective retroactively to Jan. 1, 2014 …. for services rendered to Medicaid and NC Health Choice recipients.”

  • Elizabeth P. Kanof MD

    Warmest thanks to the Legislative Staff and leadership of Bob Seligson for their tireless efforts on behalf of patients and physicians ; I know the momentum will be carried on into the special session in November.
    The failure of the Bill to prohibit minors using sun tan parlors is another example of putting corporate greed {salon owners} over the overwhelming evidence of the danger for our youth

  • Tom Barowsky

    Where do I need to look for a list of all Medicaid reductions applied to Physicians in North Carolina over the past 10 years?