Proposal includes additional funding to stop unprecedented rate cuts by Gov. Stein’s DHHS
Ensures that previous support for rural healthcare, N.C. Children’s Hospital can move ahead
Raleigh, N.C. – The N.C. Senate today approved a bill that would address the Stein administration’s politically motivated cuts to Medicaid provider rates and ensure vital investments in rural healthcare are completed.
The bill passed unanimously and now goes to the N.C. House for consideration.
The “Healthcare Investment Act” increases funding for the Medicaid rebase based on nonpartisan projections from the N.C. General Assembly’s fiscal staff. The Senate’s proposal funds the rebase at $690 million recurring and includes separate funding for administrative needs.
It also directs the Department of Health and Human Services to eliminate vacant positions to achieve savings of nearly $34 million. The department would also be required to develop a plan to improve health outcomes, program integrity, cost savings, and efficiency measures for Medicaid.
“As costs for services continue to increase, it’s vital that the Department take proactive steps to cut costs. If they’re unwilling to rein in spending, then the General Assembly will happily do so, “ Senate Appropriations Chairmen Brent Jackson (R-Sampson), Ralph Hise (R-Mitchell), and Michael Lee (R-New Hanover), said. “This proposal balances our need to address current Medicaid funding concerns while finding ways to keep spending in check. It also upholds the General Assembly’s previous commitment to support rural healthcare and the future N.C. Children’s Hospital.”
House Bill 562 also includes the last round of funding for both the N.C. Care initiative and the N.C. Children’s Hospital, as outlined in the 2023-25 state budget.
The N.C. Children’s Hospital would establish the state’s first freestanding children’s hospital. In 2023, both the House and Senate approved nearly $320 million over three fiscal years for the hospital. This would release $103.5 million to fulfill the third-year obligation.
The N.C. Care initiative supports rural hospitals and helps establish three rural care centers. The House and Senate previously approved $420 million for N.C. Care projects, and this would release $105 million to fulfill the final obligation.