Governor Recommends Elimination of 3 percent Medicaid Rate Cut

Governor Pat McCrory recommended in his 2014-2015 Budget Recommendations to rescind the 3 percent rate cut to Medicaid providers, which was implemented on January 1, 2014. This was great news since the North Carolina Medical Society (NCMS), as well as every specialty and county medical society in the state, have opposed the rate cut. Most recently, a joint letter from NCMS and its partners was sent to Secretary Aldona Wos of the North Carolina Department of Health and Human Services (DHHS) outlining our objections.  You can read that letter here.

Gov. McCrory recommended rescinding the cut due to the complexity of implementing the budget provision authorizing it. The money outlay appears to be enough to reimburse those providers affected by the cut to date.

Unfortunately, this is only a recommendation at this time.  The NC Senate and House now must consider this as well as his other budget recommendations.  The Senate budget is due to be released today.  NCMS expects this to be a speedy short session since leaders in both chambers are speaking about passing a revised budget within four or five weeks.

Other highlights from the Governor’s Recommendations include:

  • General Fund revenues still expected to be lower than anticipated for at least the next year (mainly due to collections under the new tax structure)
  • Population continues to grow at record pace
  • 65+ population growing more rapidly
  • Health and Human Services (HHS) accounts for 24 percent of total budget spending
  • Current year overruns for HHS estimated at $70 million
  • 3 percent rate cut proposed to be eliminated due to implementation difficulty
  • $1 million (one-time money) for Medicaid reform start-up costs
  • Establishing a new Medicaid Risk Reserve ($50 million) to be managed by the Office of State Budget Management
  • Additional $10.7 million necessary to account for future changes to NC TRACKS beyond current year overage and $10.7 million continuing budget needs

You can read the Governor’s entire budget recommendation document here.

The NCMS will continue to work to avoid the 3 percent cut from last year as well as any other potential rate cuts.  We will need your help communicating with your legislators about the impact of further rate cuts on your patients, your practice and your community.   NCMS will be providing regular updates so you will be better able to articulate your concerns incorporating the most timely information from Raleigh.

You can follow your lobbyists on Twitter at @doclobbyist; @amy_whited; and the NCMS @NCMedSoc.


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