North Carolina restores Medicaid rates for IDD

North Carolina has reversed the Medicaid provider rate cuts that began in October 2025, reinstating payments to their pre-cut levels as of September 30, 2025. This move follows legal challenges and court rulings that highlighted the impact of the reductions on services for individuals with intellectual and developmental disabilities (IDD), including autism.

Background on the rate cuts and legal response

The initial cuts arose from a $319 million budget shortfall caused by a prolonged state budget impasse. Medicaid reimbursement rates were reduced across multiple service sectors, which significantly affected providers delivering autism and other IDD-related supports. Advocacy groups and affected parties brought forward lawsuits, citing discriminatory effects of the funding reductions on vulnerable populations.

In response to mounting legal pressure, Governor Josh Stein and the North Carolina Department of Health and Human Services (NCDHHS) announced in early December 2025 that rates would be restored. This decision intends to alleviate the immediate financial strain on providers and help stabilize access to critical IDD services statewide.

Ongoing budget challenges threaten sustainability

Despite the rate restoration, NCDHHS emphasizes that the underlying budget shortfall remains unresolved. Without legislative action to address the gap, the Medicaid program risks depleting its resources early in 2026. This scenario could affect healthcare access for over three million North Carolina residents, including those dependent on Medicaid-funded IDD services.

The Autism Society of North Carolina acknowledged the restoration as an important short-term victory. However, the organization stresses the need for continued advocacy and legislative engagement to secure sustainable funding in the upcoming session of the North Carolina General Assembly.

Implications for providers and service recipients

The rate reversal provides immediate financial relief to providers and may prevent disruptions in service delivery. However, uncertainty around long-term Medicaid funding persists. Providers and stakeholders should continue monitoring state budget developments closely, as future decisions will influence the availability and quality of IDD supports across North Carolina.

This development underscores the critical intersection of state budget stability, Medicaid policy, and service continuity within the IDD care system. Ongoing fiscal and policy actions in 2026 will be pivotal in shaping access to care for the IDD community statewide.