North Carolina Governor Josh Stein ordered the North Carolina Department of Health and Human Services (NCDHHS) to restore Medicaid reimbursement rates, following several lawsuits.
Stein stated that Medicaid cuts were unavoidable due to a $319 million shortfall in the interim funding approved by the legislature. Republican leaders in the legislature maintained that the program was funded through April 2026 and that the cuts were unnecessary.
“North Carolina residents who depend on Medicaid "They are suffering because the General Assembly has not fully funded the program," Stein said.
“NCDHHS is restoring rates because the courts have ordered it, but there is still a $319 million funding gap. The General Assembly must act to fully fund Medicaid and protect care for millions of state residents,” he added.
Now the Medicaid rates They will return to the levels of September 30, 2025.
Stein made the decision after judges in two cases reversed cuts to therapy providers for people with autism and to personal care services in adult care facilities last month. She added that three more lawsuits had been filed and additional ones were expected.
3 million beneficiaries
The measure seeks to protect access to care for more than 3 million beneficiaries of the program.
NCDHHS Secretary Dev Sangvai added, “Underfunding such a critical program and putting it at risk is not something we can take lightly. Medicaid is a lifeline for 3 million residents, and the continued uncertainty threatens the health of the entire state.”
North Carolina remains the only state in the country without an approved budget. NCDHHS had warned for months that the lack of legislative funding was leaving Medicaid with a deficit of hundreds of millions of dollars.
Governor Stein warned that, despite the restoration of rates, Medicaid does not have enough funds to cover the entire fiscal year. Stein said it could run out of money by spring if the legislature does not act to adequately fund the program.
Reactions from the legislature
Senate Democratic leader Sydney Batch backed the governor's decision, blaming the Republican majority for the crisis.
“This crisis was entirely avoidable and is a direct result of the Republican majority’s refusal to pass a state budget and fully fund Medicaid,” Batch said.
Batch added that Republicans still have "one last chance to repair the mess they created" with a session scheduled for December 15.
In contrast, Senate Majority Leader Phil Berger and House Speaker Destin Hall said in a joint statement that Stein's demand was unconstitutional and unnecessary.
They argued that the NCDHHS confirmed that Medicaid was funded through April 2026 following the $600 million allocated by the legislature.
“The governor created a crisis out of thin air, and North Carolinians paid the price,” said Larry Potts, co-chair of the Health Appropriations Committee.
Republican leaders in both houses tried to pass legislation this fall that would provide additional funding. But they were unsuccessful because differences in legislative priorities within their own partyo.
For more information:
>>> North Carolina Republicans reject Stein's special session to fund Medicaid
>>> How the lack of legislative consensus affects Medicaid expansion and coverage in North Carolina
Impact on suppliers and population
The restoration of fees was celebrated by medical associations, hospitals, and organizations serving people with disabilities, as well as by pediatricians, occupational therapists, and mental health and addiction providers.
The reversal of the cuts “is an encouraging step toward stability for providers and the patients who depend on them,” said Josh Dobson, president and CEO of the North Carolina Healthcare Association.
They indicated that the measure guarantees the continuity of critical services and protects the most vulnerable.
Theresa McCarthy Flynn, president of the North Carolina Pediatric Society, noted that the measure “is critical for pediatricians across the state” and helps keep medical practices open to care for patients.
Other groups, including the NC Occupational Therapy Association, the Addiction Professionals of North Carolina, and the North Carolina Psychiatric Association, emphasized that restoring the fees protects essential mental health, addiction, and occupational therapy services.
Organizations representing people with disabilities, home care, and development services also celebrated the decision.
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