NC Budget Agreement Shifts More Medicaid Costs Onto Hospitals

Jul 31, 2014

The North Carolina Hospital Association says the budget deal state lawmakers have reached could lead to hospitals cutting services and jobs. The budget agreement cuts $45 million for hospitals on top of cuts already scheduled for this year.

The deal that Republican House and Senate leaders have reached reduces the money that hospitals get in two ways: it cuts the rate at which hospitals are reimbursed for Medicaid patients, and it raises a tax on hospitals when they provide that care. 

Julie Henry is a vice president for the N.C. Hospital Association.

"Essentially if you're taxing hospitals for taking care of Medicaid patients, does that mean you're penalizing hospitals for taking care of Medicaid patients?" Henry said. "Because they're not getting reimbursed what it costs to provide that care."

And Henry said that's the bottom line – the state is shifting more of the cost of Medicaid onto hospitals.

That's nothing new. The budget lawmakers agreed on last year already included a $93 million cut for hospitals this year. The new deal tweaking that budget cuts an additional $45 million.

It's part of how House and Senate leaders found money for other priorities, including an average 7 percent raise for teachers.