No Medicaid Physician Rate Cuts!

Protecting access to care for Medicaid recipients and preserving Medicaid physician reimbursement has been one of the top priorities of the North Carolina Medical Society (NCMS) this legislative session. After more than two months of working with legislative leaders, the NCMS legislative team is pleased to share with you the outcomes of our efforts. Yesterday, June 21, 2012, the NC House and Senate passed concurrence votes giving final approval to a $20.12 billion budget for 2013. While this budget bill has many focuses, a top priority for budget writers was accounting for a true and accurate picture of Medicaid. Governor Perdue now has the continuation budget for consideration. 

Budget leaders have been committed for months to fully fund essential Medicaid needs. This was good news in light of past budgets that have diverted funds from Medicaid to education spending. Even so, the NCMS was concerned that the gaps in past funding and the unwritten liabilities that came to light at the beginning of the year would threaten provider rates. In the end, legislators were able to focus on the core mission of Medicaid, protect physician and hospital rates, and provide the funding to hopefully ensure that Medicaid will not go over budget for yet another year.

All of this cost roughly $230 million beyond the original projections from 2011 as well as in addition to the money that law makers had reallocated to Medicaid to cover cash flow problems in March. Another cash flow problem, just this past week, nearly derailed the budget. In response, budget writers arranged additional savings and built a reserve for Medicaid in the event that spending forecasts are not on target.

We now await the Governor’s decision. She can sign the bill, veto the bill or allow it to become law without her signature. The law allows her ten days to make that decision so long as the General Assembly stays in session. 

Here is a glimpse of what the Governor has to consider:

General Overview

  • Education spending increased by $91 million
  • Medicaid spending increased by $228 million
  • State employees, retirees and teachers receive a 1.2 percent pay raise
  • Education reform as proposed by Sen. Phil Berger (R-Rockingham)
  • No funding for the victims of the eugenics program

Medicaid Highlights

  • A bar on any further provider rate cuts for this fiscal year
  • Increased savings target for Community Care of North Carolina (total new savings required is now more than $160 million)
  • A repeal of the cap on physician therapy (PT), occupational therapy (OT) and speech therapy (ST) services outlined in last year’s budget
  • Directions to transition next spring to a decision support-based system for managing high cost imaging services
  • $6 million reduction in personal care service funding
  • $5 million in reductions to non-state entities that traditionally receive funding
  • $25 million in temporary transitional funding to implement the new state Community Living Plan
  • $9 million in additional funds for community hospital beds for mentally ill patients
  • $7 million in additional funds for Cherry and Broughton Hospital
  • $1.6 million for the CheckMeds program
  • Funding for the high risk maternity clinic at Eastern Carolina University (ECU)
  • $2.7 million for tobacco cessation efforts

You can read the budget bill here. The continuation budget money report can be found here. These documents only capture the changes that are being made to overall spending.


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