Health Affairs March 28, 2024
North Carolina began the expansion of Medicaid coverage on December 1, 2023. In June 2023, the state requested approval from the Centers for Medicare and Medicaid Services (CMS) for using state-directed Medicaid payments (SDPs) to pay hospitals at the level of average commercial rates for serving Medicaid patients. In September 2023, CMS approved the request, with federal matching funds picking up 72 percent of the $2.6 billion SDPs, which were distributed to hospitals at the end of 2023. North Carolina financed the state share of hospital SDPs with a tax on hospital revenues and intergovernmental transfers from state-owned hospitals. According to documents submitted by North Carolina to CMS, the $2.6 billion brings gross Medicaid payments to more than twice what...
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