NC Senate to Consider Crucial Funding for Statewide Healthcare Needs
The Big Picture
The Senate is advancing a new version of House Bill 562 to stop what Republicans call “unprecedented” Medicaid provider rate cuts proposed by Gov. Stein’s DHHS. The bill funds Medicaid rebasing, fulfills prior healthcare commitments, and directs DHHS to find internal savings.
By the Numbers
$690M recurring: Medicaid rebase funding based on fiscal staff projections.
$34M: Expected savings from cutting DHHS vacant positions.
$320M (2023–25): Total commitment for the state’s first children’s hospital.
$103.5M released under HB 562.
$420M (2023–25): Total commitment for the N.C. Care rural health initiative.
$105M released under HB 562.
Key Provisions
Blocks DHHS-proposed provider rate cuts.
Directs DHHS to:
Eliminate vacant positions for savings.
Develop a plan for health outcomes, cost savings, program integrity, and efficiency.
Provides the final round of funding for:
N.C. Children’s Hospital – state’s first freestanding pediatric hospital.
N.C. Care initiative – supports rural hospitals and new care centers.
What They’re Saying
Sen. Brent Jackson (R-Sampson): Criticized DHHS rate cuts as “hasty and unprecedented,” urged accountability for Medicaid performance.
Sen. Michael Lee (R-New Hanover): Emphasized the children’s hospital as a way to keep families from traveling out of state for care.
Sen. Ralph Hise (R-Mitchell): Highlighted rural hospitals’ importance, especially in communities hit by Hurricane Helene.
Why It Matters
The bill directly challenges the Stein administration’s Medicaid approach.
Fulfills legislative promises to support rural hospitals and pediatric care.
Signals a push from lawmakers for DHHS to cut costs internally before asking for more state funding.
What’s Next
The Senate Appropriations/Base Budget Committee will take up HB 562 on Monday, Sept. 22 at 12:15 p.m. in LOB 544.
Proposal includes additional funding to stop unprecedented rate cuts by Gov. Stein’s DHHS
House Bill 562 would uphold previous obligations made by the NCGA to support rural healthcare
Raleigh, N.C. – The N.C. Senate will consider a bill to address the Stein administration's politically motivated cuts to Medicaid provider rates and ensure vital investments in rural healthcare are completed.
The new version of House Bill 562 increases funding for the Medicaid rebase based on nonpartisan projections from the N.C. General Assembly's fiscal staff. The Senate's proposal funds the rebase at $690 million recurring and includes separate funding for administrative needs.
It also directs the Department of Health and Human Services to eliminate vacant positions to achieve savings of nearly $34 million. The department would also be required to develop a plan to improve health outcomes, program integrity, cost savings, and efficiency measures for Medicaid.
"The proposed provider rate cuts initiated by Gov. Stein's health department are hasty and unprecedented," Senate Appropriations Chairman Sen. Brent Jackson (R-Sampson) said. "If the department and the Governor expect the General Assembly to continue to pump millions of dollars into the program, we need them to make every effort to find savings and evaluate its performance."
House Bill 562 also includes the last round of funding for both the N.C. Care initiative and the N.C. Children's Hospital, as outlined in the 2023-25 state budget.
"Two years ago, the General Assembly came together to support vital healthcare projects across the state," Senate Appropriations Chairman Sen. Michael Lee (R-New Hanover) said. "Families across North Carolina are making tremendous sacrifices to travel to states like Pennsylvania or Ohio to get the care their children need. We have world-class medical schools and some of the brightest researchers in the country, and a children's hospital will help keep them here."
The N.C. Children’s Hospital would establish the state’s first freestanding children’s hospital. In 2023, both the House and Senate approved nearly $320 million over three fiscal years for the hospital. This would release $103.5 million to fulfill the third-year obligation.
The N.C. Care initiative supports rural hospitals and helps establish three rural care centers. The House and Senate previously approved $420 million for N.C. Care projects, and this would release $105 million to fulfill the final obligation.
“Our rural hospitals play a critical role in their communities,” Senate Appropriations Chairman Ralph Hise (R-Mitchell) said. “N.C. Care is an important piece of the puzzle, including supporting healthcare needs in communities devastated by Hurricane Helene. The last year of funding will help continue these major projects.”
The Senate Appropriations/Base Budget Committee will consider the new version of House Bill 562 on Monday, Sept. 22, at 12:15 p.m. in LOB 544.
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