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A North Carolina administrative law judge has temporarily frozen Medicaid rate cuts for personal care services delivered in adult care homes.
The ruling came after the North Carolina Assisted Living Association and dozens of companies challenged the 8% cut to Medicaid rates for personal care services in administrative court.
Personal care services involve feeding people, helping them walk, bathe, and use the bathroom.
In affidavits, adult care home operators said that they had cut non-essential staff, switched to lower quality, less expensive food vendors, and even trained maintenance staff to provide direct care. Some administrators added direct care work to their duties.
Operators said that if the cuts continued, they would have to close or stop accepting people who are insured with Medicaid.
Administrative Law Judge John C. Evans on Nov. 7 ordered the state to pay adult care homes the full Medicaid rate for personal care services. The order blocking the rate cut is meant to preserve the status quo until a decision on the assisted living companies’ petition for a preliminary injunction is decided. The order expires on Nov. 24, unless a court extends it. The case was assigned to a mediator.
The assisted living association is the second group to successfully avoid Medicaid rate cuts suspended, at least temporarily, since the state Department of Health and Human Services imposed them on Oct. 1. Providers of autism therapy won relief from a 10% rate cut in Wake Superior Court last week.
NCDHHS reduced provider rates because it said the state legislature did not provide enough money to cover Medicaid expenses for the entire fiscal year. A dispute between Republicans in the state House and Senate prevented legislative approval of additional funds.
Leading Republicans have since united in their criticisms of Gov. Josh Stein, a Democrat, calling the rate cuts premature. Republicans claim Medicaid has enough money to pay its bills into next year while waiting for additional funds to be approved.
In their petition, lawyers for the adult care homes maintained that the rate cut violates state and federal law. DHHS does not have the authority to reduce the Medicaid personal care service rates set in state law, the complaint said. Moreover, Medicaid rates can’t be cut unless the federal government approves, the complaint said.
State lawyers representing NCDHHS said in their written response to the complaint that the agency did not violate state law or federal regulations. Adult care operators’ statements about harms did not show they were immediate or irreparable, or that they were caused by the rate cuts, the state lawyers wrote.
The judge’s decision underscores the need for the legislature to appropriate additional funds to Medicaid, NCDHHS said in a statement this week.
“Any reinstatement or reversal of the provider cuts without additional funding from the General Assembly means the program will run out of funding sooner, putting the entire state Medicaid system at risk,” the NCDHHS statement said.
If the legislature fully funds Medicaid, the agency said, “the Department will reevaluate all cuts and take action to reverse or modify cuts to ensure NC Medicaid can operate within the appropriated budget.
“We understand these provider rate cuts are devastating to people, providers and communities that rely on NC Medicaid,” the statement continued. “NCDHHS did not want to take this extremely difficult step of making these significant reductions for NC Medicaid services. However without additional funding from the General Assembly, it was unavoidable.”
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