This bulletin replaces in full the UPDATED: NC Medicaid Rate Reductions – Effective Oct. 1, 2025 bulletin.
Dear Providers,
Thank you for your continued commitment to the people of North Carolina. We know the provider rate reductions implemented in October created real challenges for you, your staff and the individuals you serve. Those reductions were necessary to keep the Medicaid program solvent in the absence of adequate funding from the General Assembly.
Recent court rulings now require the North Carolina Department of Health and Human Services (NCDHHS) to reverse those reductions and restore rates to their Sept. 30, 2025, levels. While this change brings short-term relief, it is important to be clear: the underlying financial crisis has not been resolved.
Medicaid is currently underfunded by $319 million. With the rate reductions no longer an available tool at this time, NCDHHS now has no remaining mechanisms to responsibly manage this funding gap. As a result, the Medicaid program is projected to run out of money early next year.
If this happens, the consequences will be far more severe than the rate change. The stability of the entire Medicaid program – and the care provided to more than three million North Carolinians – is at risk.
We want to ensure you have a clear understanding of the situation:
- The restoration of rates does not mean the problem has been resolved.
- The financial risk to Medicaid is greater now than before.
- Decisions about future funding are solely in the hands of the General Assembly.
We will continue to communicate transparently as the situation evolves and keep you informed of any developments that may affect the people you serve. We remain deeply grateful for your partnership and dedication during this time of significant uncertainty.