Medicaid Rate Protections Expanded in North Carolina

RALEIGH, N.C. (July 8, 2021)—North Carolina home medical equipment (HME) suppliers closed a loophole that could have weakened Medicaid managed care organization (MCO) rate floor policy and in addition were able to secure an extra two years of protections through recent action in the North Carolina Legislature. 

On June 29, Gov. Roy Cooper signed S594, a Medicaid administrative bill that included language proposed by AAHomecare and the Atlantic Coast Medical Equipment Suppliers Association (ACMESA) that “the reimbursement for durable medical equipment shall be set at one hundred percent (100%) of the lesser of the suppliers usual and customary rate or the maximum allowable Medicaid fee-for service rates for durable medical equipment and supplies, orthotics, and prosthetics.” The language can be found in Section 3.6 on page 8 of the bill text.

This legislation not only protects Medicaid MCO rate floor provisions enacted one year ago, but also extends them for an additional two years beyond the original three-year term in S808. The new legislation provides five years of protection, effective July 1, 2021.

AAHomecare had been working with ACMESA to make S808 permanent when they learned that the state Medicaid officials were working on new legislation to help implement S808 without realizing that their new language would nullify the previous measure.

“Our previous work with state Medicaid officials earned us a lot of trust with them,” said Laura Williard, AAHomecare vice president for payer relations. “We helped North Carolina avoid $15 million in paybacks to the federal government in the first year on implementation of the Cures Act and prevented additional paybacks and cuts in subsequent years. Getting them to support our language was critical to the effort.”

“This was a team effort from start to finish,” remarked Williard. “ACMESA and North Carolina suppliers have built strong relationships and established credibility for HME with key members of the legislature, and this win is the direct result of both their sustained long-term advocacy efforts and their effective outreach in support of our legislative language.”

“Rep. Wayne Sasser, Chair of the Health Committee in the NC House, was instrumental in making sure our language was included in the final bill draft,” Williard added. “North Carolina HME suppliers and the patients they serve are fortunate to have him as an advocate for high quality home-based care.

The rate protections are estimated to prevent $22 million in potential cuts to Medicaid reimbursement for HME in North Carolina on an annual basis.