Despite the best efforts of the NCAFP and other health care groups, a small cut in provider rates for Medicaid will likely be implemented in the next few months. As the legislature faced tough economic choices and the growing reality that additional federal assistance for Medicaid is becoming more and more unlikely, the General Assembly extended the Department of Health and Human Services the ability to cut provider rates earlier in the state budget year. Provider rate cuts totaling $26 million are fifth in a list of eight contingency cuts that were proposed in the state budget if the additional federal funds do not materialize. During the last days of the session, DHHS Secretary Lanier Cansler urged the Legislature to give him the latitude to implement small cuts earlier in the fiscal year that began July 1st in order to avoid larger cuts if the Department waited to January to see if the additional federal Medicaid funding was approved by Congress at the last minute.

The NCAFP's Government Affairs team continues to do everything possible to minimize the impact on primary care. However, with the state facing an additional $500 million deficit if the federal funding does not occur and a potential $2-$3 billion state budget deficit in the 2011-2012 fiscal year, it appears that some small cuts (in the range of 1 to 1.5% to reach the $26 million contingency) will likely be unavoidable.