The second phase of state budget negotiations began this week as the Senate received the House’s budget proposal for consideration. Both chambers share the goal of reducing overall state spending by nearly 20%. In order to achieve that goal, cuts from the Department of Health and Human Services will total a half billion dollars.

Acknowledging that physicians have been significantly and disproportionately cut in the past budget, the House budget specifically exempts physicians from a 2% across the board Medicaid provider rate reduction and applies the physician portion of this cut to hospitals. Physicians still carry a significant responsibility, however,  through an increased savings goal of $90 million from Community Care of NC (CCNC). If this goal is not met, another provision provides for rate cuts that would be implemented mid-year to achieve the $90 million target.

However the entire fee schedule remains under fire in the Senate, which is considering as much as a 4% across the board cut to Medicaid provider rates. The NCMS is working closely with Senate budget leaders to hold the House position on Medicaid provider rates and CCNC savings. 

It is unclear at this time where the Governor stands on the House proposal. The Senate is expected to release its budget as early as next week.