Dr. Deborah Ainsworth, owner of a pediatric practice in Beaufort County, has hard decisions to make about how to handle the financial dip that resulted from the state paying less for Medicaid health services.
About 85% of the children Washington Pediatrics treats are insured under Medicaid. Beaufort is a small, rural, economically disadvantaged county surrounded by others like it. Families travel far, sometimes up 90 minutes, to get to the office in Beaufort’s county seat, Ainsworth said.
“There’s nothing else around,” she said. “We’re kind of a catch-all.”
Independent primary care practices like Ainsworth’s are struggling to cope with the state’s 8% rate cuts for the care they provide to people who use Medicaid. Independent practices aren’t owned by large hospital systems that have more sources of income and are likely better able to absorb rate cuts.
Community Care of North Carolina, an organization that supports independent physicians and their practices, asked a group made up of mostly independent practices how they would respond to the rate cut. More than 60% said they would need to limit the Medicaid patients they see or stop taking on new ones, while 24% said they may need to stop treating Medicaid patients altogether. And 22% — one in five — said they may need to close.
More doctors closing their doors to Medicaid patients would mean additional hurdles to treatment for rural residents who already tend to travel farther to get to doctors and who are more likely to use Medicaid as their insurance than suburban or urban residents.
More than 39% of people who use Medicaid live in rural counties, according to a report from the NC Rural Center. Rural residents are about 35% of the state’s population.
According to the Sheps Center for Health Services Research at UNC, about 20 of the state’s 100 counties had no practicing pediatricians last year.
“These practices in rural areas — after a while, they may not be able to survive if this goes on,” said Gregory K. Griggs, NC Academy of Family Physicians CEO. “And once they’re gone, they’re not opening back up. It’s going to hit our areas of the state that already have access problems the worst, because those are the areas of the state that have higher percentages of Medicaid.”
Ainsworth said she will continue to welcome children who use Medicaid, but will likely cut expenses by “tightening our belt.” That means not replacing staff members who are leaving and ending plans to recruit a new doctor.
“We’ve always taken Medicaid,” said Ainsworth, a member of the CCNC board of directors. “I can’t stop taking Medicaid patients. I can’t drop them both financially or ethically. We’ll continue to see new patients. That’s just what we’re going to do.”
The Medicaid program needed to find a way to save $319 million over eight months, said DHHS Secretary Devdutta Sangvai.
DHHS imposed rate cuts from 3% to 10% for Medicaid services beginning Oct. 1, with Sangvai and Democratic Gov. Josh Stein saying the state legislature did not provide enough money for the Medicaid program to operate until June 30 of next year.
“There’s no way we did this with the idea that no one is going to get hurt,” Sangvai said. “We need to get this funded so that we can start reprocessing claims, making people whole, and focus on getting people healthy.”
The impact of the cuts differs depending on what services are provided, who is providing them, and where practices are located, Sangvai said.
There was no way to fine-tune rate cuts based on geography, he said.
Republican legislative leaders say the reductions are premature, and Medicaid has enough money to last into next year without cutting rates.
Dr. Mark McNeill, president of the NC Academy of Family Physicians, has met with both Stein and Republican legislative staff since rates were cut.
“I sincerely think all parties sincerely want to get a solution in some way shape or form,” he said.
McNeill said he wanted to emphasize in those meetings how lower rates will affect family practices, particularly independent practices.
Dr. Mark McNeill, president of the NC Academy of Family Physicians on Nov. 14, 2025. (Photo: Lynn Bonner/NC Newsline)“We’re already struggling with access to primary care,” he said. “This is just making it so much worse.”
McNeill, whose office is in Asheville, has decided to stop accepting new Medicaid patients until the rate cuts are reversed. Between McNeill and the other doctor in the office, about 15% of the practice’s patients are on Medicaid.
The state must seek permission from the federal government for the rate cut. DHHS must have the request into the Centers for Medicare & Medicaid Services by Dec. 31.
If the funding controversy is resolved, the state must go back to CMS for permission to reverse the cuts.
McNeill wonders whether there’s a chance that CMS won’t allow the state to restore the rates. The Trump administration has been eager to reduce Medicaid spending. The “Big Beautiful Bill” Act on taxes and spending cuts about $1 trillion from Medicaid over 10 years.
Sangvai agrees there is a risk CMS will refuse to allow North Carolina to restore its Medicaid rates if funding increases, but he’s confident that won’t happen because the funding issue involves state money.
“I’m optimistic that CMS will allow us to take the corrective action in that second filing,” he said.
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