North Carolina Medicaid Faces 139 Million Dollar Shortfall

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The administrators in North Carolina Governor Beverly Perdue’s office have announced that the state’s Medicaid health insurance program could face a $139 million dollar shortfall in the coming year due, in part, to slow enrollment of the chronically ill. In addition, the state Medicaid agency must make repayments for accounting errors and improper billings adding up to $300 million that occurred several years ago.

State health regulators say that the NC Medicaid insurance program is falling short of meeting the $356 million in net reductions for the division that oversees the program. A budget was created to address Medicaid finances, which Governor Perdue vetoed because of the severity of the cuts, however, the Legislature overrode the veto, according to Gary Robertson of the Associated Press.

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"The Legislature's budget cuts were extreme and wrongheaded and are doing lasting damage to North Carolina," Perdue spokesman Chris Mackey said, adding that the state will have to eliminate services that benefit the most vulnerable citizens unless legislative leaders address the problem.

More than 40 changes were proposed to the Centers for Medicare and Medicaid Services in an effort to find savings. Payment rates to doctors and other medical providers have been cut, as well as some medical services to beneficiaries, such as vision care.

North Carolina Medicaid has about 1.5 million recipients in the state and receives $12 billion in federal and state funds under Title XIX of the Social Security Act. The program covers doctor and hospital bills, prescriptions, dental care, and most medically necessary services for children under age 21. Those eligible for the health insurance program are low-income parents, children, seniors and those with disabilities.

Sources: Business Week/Associated Press, Raleigh News and Observer

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