North Carolina lawmakers gave initial approval Wednesday to a $319 million package to fully fund the state’s Medicaid program, heading off fears for the one-in-four people statewide who rely on the program.
The bill passed the House 112-1 and passed the Senate 48-1. Both chambers, however, delayed final votes on the provision, so the bill isn't expected to make it to Democratic Gov. Josh Stein's desk until next week.
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Stein has pushed hard for the funding and is likely to sign the bill into law, although his office hasn't responded to requests for comment on the bill — which also contains some additional provisions Democrats have criticized as politically motivated.
Medicaid is on track to run out of money next month, due to the lack of a new state budget. Republican legislative leaders still appear far apart in broader budget negotiations, but they’ve agreed to pass a separate bill funding Medicaid to keep the program from running out of money. If that were to happen, doctors and hospitals might start refusing to treat the 3-plus million North Carolinians who rely on Medicaid — most of them disabled people, children and low-income adults.
“This is a big deal,” Rep. Donny Lambeth, R-Forsyth, said ahead of the vote Wednesday in the House to ensure the program wouldn’t run out of money.
He added that other new provisions in the bill, intended to cut costs and add new oversight to Medicaid, are a first step toward further reforms.
“We have, certainly, long-term work to do to curb the cost increases that we're seeing in Medicaid,” said Lambeth, a top state budget writer. “But this is a really, really good start.”
Ahead of the votes in the House and Senate planned for Wednesday afternoon, House Democrats held a press conference outlining their own budget priorities and criticizing Republicans for failing to pass a budget, while also praising GOP leaders for not letting Medicaid fail.
“I'm just thankful something got done,” House minority leader Rep. Robert Reives, D-Chatham, said. “Because at this stage, I saw where we were headed. And so knowing that we've saved Medicaid, to an extent, right now is a win in my book.”
Cost-cutting efforts
One condition Republicans are seeking, in exchange for the money, is a series of new oversight provisions on the Medicaid program intended to kick people off their coverage, and to cut costs in other ways.
In recent months the legislature has held multiple hearings on autism therapies that are funded through Medicaid, alleging that rampant fraud in that field has led to costs ballooning.
On Wednesday Rep. Grant Campbell, R-Iredell, said he was glad to see provisions in the bill requiring providers of those autism therapies to have at least a master’s degree, and to be based in or near North Carolina. He noted that substantial amounts of funding have been going to people living in other states or even other countries, providing care of questionable value through video calls.
“What we're hoping is that this is going to push some of the bad actors out of the space,” Campbell said. “This can potentially give us savings somewhere between $210 million and $450 million.”
Rep. Zack Hawkins, D-Durham, thanked Republicans for letting him work with them on that provision. He has two sons with autism and said the changes should improve outcomes for families in addition to saving money for the state.
“We know that out-of-state providers who don't live in North Carolina and try to administer [therapy] to a nine year old with autism, it's just not a good fit,” Hawkins said. “I can tell you from experience. And so the tightening that we've done will most certainly make sure that bad actors don't have the opportunity to take advantage of the system.”
GOP leaders have also said they believe there are many people receiving Medicaid who should be deemed ineligible, but that they’re slipping through the cracks, remaining on the rolls and inflating the costs to taxpayers.
If Medicaid is allowed to keep growing at the rate it’s been growing in recent years, House Speaker Destin Hall said, it will eat up a bigger and bigger share of the state budget — preventing lawmakers from having as much leeway to fund new state employee pay raises or other priorities.
“The debates about all these other issues we're talking about are not going to matter, because Medicaid is going to swamp it all out,” Hall told reporters Tuesday during the first day of the new legislative session. “So we've got to get our arms around it.”
Reives said some of the changes Republicans have proposed for Medicaid are unserious, politically motivated proposals. For instance, the North Carolina Department of Justice has long been in charge of Medicaid fraud cases. But rather than funding the extra staff that the DOJ has requested for its Medicaid division to catch fraud, the bill gives $500,000 to the state auditor’s office to hire more staffers to look for waste inside the state health department. Reives said he believes the only reason for that is the fact that the auditor’s office is led by a Republican, Dave Boliek, while the DOJ is led by Democratic Attorney General Jeff Jackson.
Stein’s budget proposes spending $500,000 on Jackson’s office, to bolster his Medicaid Investigations Division with new efforts to catch fraud using data mining software, a technique Jackson told lawmakers earlier this month is a cutting-edge way to find fraud that’s previously flown under the radar.
Reives said it’s just the latest in a string of policies Republican state lawmakers have backed after their party lost the 2016, 2020 and 2024 elections for governor, attorney general and other statewide offices — stripping powers and duties from those offices, or leaving them understaffed, and consolidating new people and powers in offices won by Republicans instead.
“What this body continues to do is they hear from voters, they see what voters want, what they prefer, and then they say: ‘You guys made a bad decision, and so we're going to make another decision,’” Reives said.
Various power shifts backed by GOP lawmakers have faced many lawsuits in North Carolina over the past decade. Some have been declared unconstitutional, while others have been allowed to stand. Yet others are still being litigated.