Starting Oct. 1, the N.C. Department of Health and Human Services (NCDHHS) implemented Medicaid provider reimbursement cuts of 3% to 10%.

The cuts followed the state legislature’s stalemate over the 2025-2027 budget. A “mini” budget passed in July included $500 million for projected Medicaid costs, falling short of the $819 million NCDHHS requested to fund the program through June.

The state’s Republicans have said the reimbursement cuts are premature and unnecessary.
Meanwhile, as of press time, North Carolina lawmakers had yet to agree on a 2025-2027 budget.

“The forced cuts from the budget shortfall threaten care for those who need it most and include some of North Carolina’s most vulnerable populations,” said NCDHHS Secretary Devdutta Sangvai in a news release.

Health care experts like the N.C. Healthcare Association (NCHA), a group representing hospitals and providers statewide, fear that Medicaid cuts will weaken the state’s health care system ahead of further cuts expected under President Donald Trump’s One Big Beautiful Bill Act.

“These cuts will harm access to care and quality services across our state will be at risk,” said Josh Dobson, president and CEO of NCHA. “These cuts come at the worst possible time. Hospitals are already preparing for steep Medicaid cuts under the One Big Beautiful Bill Act, lower State Health Plan rates and new medical debt forgiveness requirements taking effect in January. Reducing Medicaid payments now will make it even harder to care for our most vulnerable patients.”

Currently, Medicaid covers more than 3 million people in North Carolina.

MedNorth Health Center, a federally funded community health center in downtown Wilmington, anticipates an influx of referrals as other practices turn away Medicaid patients.

“We are getting referrals,” said Althea Johnson, CEO of MedNorth. “We’re getting those patients calling us and coming and showing up because their previous provider is no longer taking Medicaid.”

Johnson said that 37% of MedNorth’s patients are on Medicaid, and 33% are uninsured.
 

HOP program’s end

The mini budget passed in July also led to the shuttering of the Healthy Opportunities Pilots (HOP) program, which paused services at the end of June due to the lack of funding from the General Assembly.

HOP is a federally and state-funded pilot program, authorized under an 1115 Medicaid Waiver during the first Trump administration. It allows NCDHHS to use Medicaid funds – outside of the usual projected costs budget – to improve health outcomes and reduce health care costs by addressing social determinants of health, such as housing, food, transportation and interpersonal safety.

The program operates in three regions: western North Carolina, northeast North Carolina and the lower Cape Fear region, which the Community Care of the Lower Cape Fear (CCLCF) in Wilmington oversees. CCLCF provided over 400,000 services in its six-county region alone.

“As much as 80% of somebody’s health is determined by their social and environmental factors and the behaviors that result from those particular factors,” said Sarah Ridout, HOP program director for CCLCF.

While active, the HOP program saved participating members up to $1,020 in medical costs each year, according to estimates. In the first few weeks of the program’s pause, care managers reported that member needs increased and that positive health outcomes began to reverse.

“Within three weeks, there was a noticeable difference in the gap in service,” Ridout said.

If the General Assembly approves funding for HOP, the program can resume services. However, as Medicaid cuts begin affecting providers, Ridout worries that the program will have a harder time engaging members and connecting them to resources if their primary care providers no longer accept Medicaid.

“When practices and providers start feeling those cuts and hospital systems start feeling those cuts, they may make the choice of not accepting Medicaid members anymore,” Ridout said.

Johnson said MedNorth won’t turn away Medicaid patients.

“Even with the cuts and whatever else, we’ll have to do more grant writing and fundraising …,” said Johnson, “because that’s part of what we’re here for, to make sure that health care is available in the community for those who need it, especially the underinsured and the uninsured.”

In a statement, Gov. Josh Stein noted that NCDHHS could reverse the Medicaid reimbursement rate cuts if the state legislature fully funded the program.

While Medicaid changes ripple through the state, New Hanover County Social Services, which processes Medicaid applications, is available to guide affected members through the Medicaid changes, officials say.

“New Hanover County Social Services is continuing to work with community members receiving Medicaid support to better understand the recent changes,” stated Tonya Jackson, social services director for New Hanover County, in an email in October. “As the administrator of these programs, we are awaiting further guidance from the federal and state government on how these changes will impact individuals and what support they are allotted.”