Nearly $2.6B going to 102 hospitals ahead of Friday’s Medicaid expansion

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(The Center Square) – Billions of dollars in Healthcare Access and Stabilization Program payments this week are going to North Carolina hospitals as the state moves toward Medicaid expansion on Friday.

Nearly $2.6 billion will flow to 102 hospitals to support the health care system and help hospitals pay for the non-federal share of Medicaid expansion approved by the General Assembly in September.

New assessments on North Carolina hospitals will finance both the payments and Medicaid expansion, while allowing the state to bring in over $8 billion annually from the federal government, based on projected expansion enrollment. The Healthcare Access and Stabilization Program payments are calculated based on in-network Medicaid managed care payments to acute care hospitals, critical access hospitals, and those controlled by the UNC Health Care System and ECU Health Medical Center.

Officials with the North Carolina Department of Health and Human Services contend the shift on Dec. 1 will have a “historic impact” on health care for the more than 4.6 million people living in the state’s 70 rural counties.

“These payments to hospitals are a lifeline and critical as we work to strengthen rural hospitals and health systems in North Carolina,” Health and Human Services Secretary Kody Kinsley said in a statement. “The money will ensure people covered by Medicaid and Medicaid expansion have access to comprehensive physical and behavioral health care services in the communities they live in.”

The department estimates 600,000 North Carolinians – adults aged 19-64 who have incomes up to 138% of the federal poverty level – will become eligible under expansion on Friday, with roughly 300,000 who currently have limited Medicaid family planning benefits automatically enrolled.

The expansion will align North Carolina with 40 other states that have expanded Medicaid since it was authorized by the Affordable Care Act in 2014.

The move comes as a confluence of factors, from increasing labor and drug costs to declining populations, are fueling rural hospital closures in North Carolina and across the country.

George Pink, deputy director of UNC Chapel Hill’s NC Rural Health Research Program, told The Center Square in August “there’s a lot of different reasons” North Carolina has one of the highest number of hospital closures in the nation, and the increasing number of uninsured patients is one.

Data from UNC’s Cecil G. Sheps Center for Health Services Research shows a dozen North Carolina hospitals have closed or converted since 2005, the third highest figure in the nation according to U.S. News & World Report. Other research from the Center for Healthcare Quality and Payment Reform shows six NC hospitals are at immediate risk of closure.

Pink said “a lot of people in the rural hospital community are very concerned about 2024” with the loss of federal COVID-19 aid that helped to prop up finances and reduce closures in recent years conspiring with increasing reliance on higher-cost travel nurses and rising drug prices.

The North Carolina Healthcare Association contends “Medicaid expansion is crucial” to countering the trend by boosting the number of insured patients.

“That will certainly help our struggling hospitals when that happens,” association spokeswoman Cynthia Charles previously told The Center Square.

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