Direct Care Worker Wage Increase Initiatives - SFY 2027

SFY 2027 Innovations Waiver Services DCW Wage Increase Initiative

In the 2026 Appropriations Act, Session Law 2026-41 Section 9E.14, the North Carolina General Assembly appropriated $21.3 million in recurring state funds, beginning in State Fiscal Year (SFY) 2027 to raise NC Medicaid Innovations Waiver services rates with the intention of providers applying the increases to raise the hourly wages of the direct care workers (DCWs). 

NC Medicaid implemented the incremental Innovations DCW Rate Increases effective Oct. 1, 2026, and retroactive to July 1, 2026. NC Medicaid also established standard documents that LME/MCOs and providers shall use as part of a reporting process enabling them to meet all legislative requirements for participation in the DCW wage increase initiative:

• Attestation and Acknowledgment Form: To obtain the rate increase, an authorized user for each eligible Innovations Waiver Service provider must complete the attestation and submit it to their Local Management Entity/Managed Care Organization (LME/MCO).
• Innovations Direct Care Worker Wage Year-End Aggregate Report: NC Medicaid developed a standardized workbook that shall be used to capture legislative effects on DCW wages and benefits and demonstrate provider compliance with the DCW rate increase requirements. Medicaid provided the workbook to the LME/MCOs – providers should receive communication from their LME/MCO with further details.

As described in the attestation form, providers must submit documentation to LME/MCOs showing how rate-increase funds were distributed to DCWs. LME/MCOs will use this information to complete the standardized aggregate workbook and submit it to NC Medicaid. NC Medicaid will then review and aggregate all LME/MCO submissions into a unified legislative report. 

Please note that the reporting deadlines originally designated by S.L. 2026-41 have been revised by NC Medicaid. These revised dates for the overall reporting requirements, data periods, and submission cadences are based on the previous DCW wage increase reporting structure under S.L. 2023-134 and S.L. 2024-1. NC Medicaid’s intention is to reduce administrative burden while ensuring data integrity. The revised reports’ submission deadlines are as follows:

• Due Dec. 1, 2027: LME/MCOs submit Innovations Direct Care Worker Wage Year-End Aggregate Report to NC Medicaid
• LME/MCOs and Providers are encouraged to proactively engage to align with respective LME/MCO reporting processes to achieve the Dec. 1, 2027, due date.
• Due Feb. 14, 2028: NC Medicaid submits legislative report to General Assembly