North Carolina extends DME rate floor, but long-term funding concerns grow nationwide

RALEIGH, N.C. - A three-year extension of the DME rate floor for North Carolina Medicaid provides well-earned relief for providers, but industry stakeholders say reimbursement pressures continue to mount nationwide.

The North Carolina General Assembly has approved a state budget that extends the rate floor for Medicaid for an additional two years through June 30, 2029.  In May, Gov. Josh Stein signed HB696 into law, providing an initial one-year extension through June 30, 2027. 

“Our goal has been to try to go for a permanent rate floor in North Carolina, but we know that in most states, a lot of people are hesitant to do something permanent,” says Laura Williard, senior vice president of payer relations for AAHomecare. “We were hoping for a five-year extension, but at the end of the day, we were thrilled with this.”

Medicaid program ‘in flux’

Stakeholders, who have been working on the rate floor issue for the last three years, found themselves up against a host of challenges in North Carolina, including a new secretary of the Medicaid program who is working to set priorities, and an extension of managed care contracts, says Williard.

“They’ve had a lot of change, and their Medicaid program is in flux at this point in time,” she said.

Federal cuts add pressure

While stakeholders hail the extension in North Carolina, Medicaid rates across the country aren’t keeping pace with provider costs, they say. In particular, states are feeling the pressure from President Trump’s One Big Beautiful Bill, which contains nearly $793 billion in cuts to the program over 10 years.

“The reductions in federal funding are making it very difficult for us to work and get rate increases to keep up with inflationary costs,” said Williard. “As an industry, we’re trying to maintain what we have and get rate increases where we desperately need those in certain product categories or for certain HCPCS codes.”