NC Medicaid Rate Reduction Questions and Answers

Answer

All applicable rate reduction percentages are defined on each fee schedule and are effective Oct. 1, 2025. The updated fee schedules were published to the NC Medicaid Covered Codes and Fee Schedules Portal on Oct. 1, 2025. 

Question (continued)

Personal Care Services (PCS), Community Alternatives Program for Disabled Adults (CAP/DA), including respite, Community Alternatives Program for Children (CAP/C), including respite, Community Living and Support (CLS) and Peer Support Services?

Answer

All applicable rate reduction percentages are defined on each fee schedule and are effective Oct. 1, 2025. The updated fee schedules were published to the NC Medicaid Covered Codes and Fee Schedules Portal on Oct 1, 2025. Any rate revisions identified will be released in a future revised fee schedule upload.

Answer

ACN falls under non-PCS services.

Answer

CAP PCS rates historically have been aligned with fee for service PCS rates. To maintain that alignment, fee for service PCS is being reduced by 8%, so we have applied the same 8% reduction to CAP PCS services. NON-PCS CAP services rate reductions are receiving a 3% reduction in alignment with TBI, Innovations and 1915i.

Question continued

• For example, a consumer with cerebral palsy requiring more intensive support compared to a client with hypertension.
• Or a client who is HIV-positive requiring a more experienced caregiver due to the complexity of care.

We would greatly appreciate any guidance on whether NC Medicaid or Managed Care Organizations (MCOs) have established mechanisms to recognize and reimburse higher acuity cases at enhanced rates, or whether providers must use the standard rates regardless of diagnosis and care level.

Answer

Current rate methodology practices are not changing with the implementation of rate reductions. Enhanced or negotiated reimbursement methods currently in place will be available.

Answer

Contracts are being amended by NC Medicaid to reflect the rate reduction for state directed payments for Non-Emergency Medical Transportation (NEMT) services. Local agencies are responsible for managing the reimbursement rate reduction with current NEMT providers. This may include revising agreements with NEMT providers who are contracted with the local agency. If the local agency chooses not to revise the contracted reimbursement rate with a vendor, the local agency will be responsible for the 3% difference.  

Question (continued)

For planning purposes, we need to provide timely notice to our contracted vendors and also engage our legal department to review and revise contracts as needed. Any additional guidance you can provide on how local agencies should manage this change would be greatly appreciated.

Answer

The rate changes may indirectly affect the contracts between DSS and NEMT vendors. The NC Medicaid reimbursement rate for the same NEMT service provided on or before Sept. 30, 2025, will be reduced by 3%. NC Medicaid is amending contracts for state directed payments for NEMT services to reflect the 3% rate reduction.

Local agencies are responsible for managing the reimbursement rate reduction with current NEMT providers. This may include revising agreements with NEMT providers who are contracted with the local agency. If the local agency chooses not to revise the contracted reimbursement rate with a vendor, the local agency will be responsible for the 3% difference.
 

Question (Continued)

You have listed an example of “overlapping physician codes” using the Children’s Developmental Services Agency (CDSA) fee schedule. However, this service is not one that is uniformed among other providers, so I want to get a clear picture of what is meant by overlapping physician codes, and physician codes from the prospective of a Federally Qualified Health Center (FQHC) practice that provides general primary care, behavioral care and dental care and that does not provide CDSA.

Answer

The CDSA reference was only intended to provide an example of “Overlapping Physician Services codes.” Overlapping Physician Codes are physician service codes that originate from the Physicians category of service, and the rate is established under physician services rate methodology. The established physician service code and rate is then included on a different provider type fee schedule at the same rate as the physician services fee schedule code rate or at the rate the physician services relative value unit (RVU) is in effect when Medicaid adds the coverage of the code.

T2040 received a 3% reduction.

Answer

Personal Care Services in the CAP/C and CAP/DA Waivers are listed in the chart below:

Answer

Dietary and nutritional services codes that only appear on the dietary and nutritional fee schedule are reduced by 3%.
Overlapping physician codes (those that appear on both the Physicians services fee schedule and the Dietary and Nutritional Service fee schedule are reduced at 8%.
 

Answer

Enhanced Mental Health Services are reduced at 3%. Please refer to the Enhanced Mental Health Services fee schedule for more information.

Answer

FQHCs are reduced by 3%.

Overlapping physician codes that appear on both the Physicians Services fee schedule and the Dietary and FQHC fee schedules are reduced by 8%.
 

Answer

The code appears on both the FQHC fee schedule and on the respective refenced services fee schedule. The reduction will be based on the respective fee schedule reduction where the rate is initially established before being added to the FQHC fee schedule.

Answer

Lab and x-ray codes established by lab & x-ray methodology only are reduced by 3%.

Codes which appear on both the Physicians Services fee schedule and the lab & x-ray fee schedule, but the rate is based on the Physician services fee schedule methodology are considered overlapping codes and reduced by 8%.
 

Answer

All services performed by a Physician Assistant where they are billed as the rendering provider are decreased by 8%.

ER codes from 99281 to 99285 are reduced by 10%.

Physician codes that are NOT ER codes and physician codes outside of the ER code range 99281 to 99285 are decreased at 8%.
 

Question (continued)

as of a June 23, 2025, letter from state to us is set at a specific dollar amount for all encounters. This payment is attached to the T1015 Medicaid encounter code rate for FQHCs.
We are not paid fee-for-service whereas a payment is expected for each code on a claim. No matter the acuity of services on a particular encounter or patient, we receive just that T1015 code rate. How should we interpret your meaning of “overlapping physician codes?”

Answer

The code appears on both the Physician Services fee schedule and FQHC fee schedule, and the rate is based on the Physician Services rate.

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Yes.

Answer

Incentive rates will continue to be based on whether the incentive measures have been met.

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Procedure codes T2026 and T1005 are considered PCS like services with respect to the rate reduction of 3%.

Answer

That is not a mistake, PCS like waiver services are cut by 8%, non-PCS like waiver services are cut by 3%.

Medicaid Bulletin NC Medicaid Rate Reductions – Effective Oct. 1, 2025, referenced in question above.

Answer

All applicable rate reduction percentages are defined on each fee schedule and are effective Oct. 1, 2025. The updated fee schedules were published to the NC Medicaid Covered Codes and Fee Schedules Portal on Oct. 1, 2025. The rates for these codes can be located on the fee schedule that is applicable to the licensure credentials for a behavioral health provider.

Answer

Yes, coverage can restart for GLP-1’s for weight management if NC Medicaid is fully funded.

Answer

Currently there are no plans to cut Medicaid off completely.

Answer

All applicable rate reduction percentages are defined on each fee schedule and are effective Oct. 1, 2025. The updated fee schedules were published to the NC Medicaid Covered Codes and Fee Schedules Portal Oct. 1, 2025. Refer to the RBI-BHT fee schedule.

Answer

Hospice room and board is billed utilizing revenue codes 0658/0659 and the claim includes the SNF NPI to identify the location where the hospice resident is residing.  Reimbursement of those two hospice codes only is based on 95% of the SNF facility rate for the SNF NPI listed on the claim. The SNF rate reduction (10%) is being passed on to the hospice provider via the billing process as the hospice fee schedule does not include the two codes (0658/0659).

All other hospice service codes reimbursement is based on the Centers for Medicare & Medicaid Services (CMS) provided Medicaid rate that is a statutorily mandated payment floor. States cannot pay less than the Medicaid payment rates published in the relevant Medicaid Hospice Rate Letter released annually by CMS.

The SNF 10% rate reduction effective Oct. 1, 2025, is reflected in the final rate inclusive of required adjustments to the case mix index, adjustments to provider assessment rates, and per diem rate reductions due to a shortfall of rebase appropriations.

Physician Services codes will receive an 8% reduction if the rate is based on the Physician Services rate methodology. ER codes designated by the state will receive a 10% rate reduction.

Question (continued)

When the fee schedule is pulled from the Medicaid website, almost all fees were reduced by 8% which is a dramatic increase in reduction that has been announced on multiple occasions.

Answer

A revised fee schedule reflecting the corrected 3% rate reduction has been posted to the NC Medicaid Covered Codes and Fee Schedules Portal.