Jon D’Angelo started the week telling a worker key to his being able to live in his own house that they were getting a pay cut.
D’Angelo receives services in his home under a Medicaid program for disabled adults. That program is receiving 8% less money as of Oct. 1.
“They were kind of shocked,” said D’Angelo, who is chairman of the NC Council on Developmental Disabilities. “With most jobs the pay goes the other way, not down.”
The state Department of Health and Human Services instituted cuts to Medicaid insurance rates this month, meaning that health care providers will receive less money for caring for the 3.1 million North Carolinians who depend on the program to pay for doctors, dentists, hospitalizations, community care, and nursing home stays.
The rate cuts range from 3% to 10%.
The legislature did not allocate enough money to keep Medicaid rates stable, Gov. Josh Stein has said. The state Department of Health and Human Services announced in August that the cuts were coming unless the legislature approved an increase. The stopgap budget the legislature approved in July was $319 million short of what Medicaid needed to cover its costs, Stein’s administration said.
Republicans in the state House and Senate were not able to agree last week on a measure that would provide more money. Their dispute is over the unrelated issue of a children’s hospital planned for Apex.
Workers learning of pay cuts may be the earliest jolt to a health insurance program that, in fiscal year 2024, spent about $28 billion.
The federal government picks up most Medicaid costs. In 2024, the federal government paid nearly $19 billion, according to a state Department of Health and Human Services annual report. About $5.5 billion came from the state, and about $3.4 billion from other sources, mostly hospital assessments. It’s money that works its way through the economy to reach individuals’ paychecks.
The rate cuts “could be devastating” to primary care practices, particularly those in rural and underserved areas, the North Carolina Academy of Family Physicians said in an email.
Survey results
The Academy of Family Physicians and the North Carolina Pediatric Society received 429 responses to a late August survey of their members assessing rate cut impacts.
Dr. Mark McNeill, president of the Academy of Family Physicians, says 44% of survey the respondents indicated they would have to limit the number of Medicaid patients they see in their practice, and nearly 10% said they would have to stop seeing allny Medicaid patients.
More than a quarter said they would have to lay off administrative staff, and just over 20% said they would have to lay off medical staff. Nearly 23% said the cuts might result in one or more physicians in their practices retiring early.
Cuts adding fuel to health care worker shortages?
North Carolina has a shortage of direct care workers employed to work with people in their home and in facilities such as nursing homes.
The rate cut was widely discussed at the NC Coalition on Aging annual meeting last week, said Board of Directors Chair Mary Bethel. It will mean lower rates for personal care services and reduced payments to nursing homes and assisted living facilities.
Mary Bethel, chair of the NC Coalition on Aging Board of Directors. (File photo)Kay Castillo, executive director of the nonprofit Friends of Residents in Long Term Care, said the cuts will be “devastating to aging as a whole.”
Reductions to nursing home rates are a worry. “Ten percent is a pretty hefty cut,” said Bethel. “We’re also really concerned about reimbursement for home care services.”
Lower reimbursement rates could hit staffing and staff training in parts of the health care industry already struggling to find enough workers.
“Recruitment and retention of staff is a major issue,” Bethel said. “We have a shortage of health care workers in many fields.”
Low salaries are seen as contributing to the direct care worker shortage. The state legislature has made a few attempts over the last five years to increase wages for direct care workers paid with Medicaid money but employed by private agencies.
“There’s been so much work to get them up to a level that they’re able to live on,” D’Angelo said of direct care wages. “This is a massive step backwards.”
Most people who use Medicaid are enrolled in managed care plans. Administrators for government managed care plans for people with mental illnesses, developmental disabilities, or substance use disorders, also known as LMEs/MCOs, announced they would not cut rates until Nov. 1.
But other programs, like the one that helps D’Angelo, are not part of managed care.
A blow to expanding dental care
Dentists have been pushing for increased Medicaid payments for years.
While expenses have increased, Medicaid rates for most dental procedures haven’t changed much since 2008, according to a report last year by a task force at the N.C. Institute of Medicine. Payment rates even declined for some of the most common dental procedures, the report said.
A bill filed this year to increase dental rates said Medicaid pays dentists about 35% of what care actually costs.
The Oct. 1 rate cut puts dentists in an even deeper hole when they care for Medicaid beneficiaries, said Dr. Roslyn Crisp, president of the N.C. Dental Society. Dentists are already deciding not to take on Medicaid beneficiaries as patients because of low reimbursement rates, she said.
“We are approaching a crisis situation,” Crisp said. “I think that, unfortunately, things are going to get a lot worse before they get better.”
Untreated dental problems can lead to serious and potentially life-threatening infections. People without insurance who seek care for mouth pain in emergency rooms may receive antibiotics or pain medication, but not treatment for the underlying cause, Crisp said.
Crisp has a pediatric dental practice in Burlington, where she said about half her patients are Medicaid beneficiaries. She worries, with the rate cut, how to keep all of her staff.
“If you ask me what keeps me up at night,” she said, “[it’s] how can I hang in here to make sure they have viable employment? It’s hard.”
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