RALEIGH — The North Carolina Department of Health and Human Services (NC DHHS) announced historic Medicaid reimbursement rate increases will soon be implemented for most mental health, substance use, intellectual and developmental disabilities (I/DD) and traumatic brain injury (TBI) services in North Carolina. This transformative change is the first increase to the state minimum reimbursement rates for behavioral health services in more than a decade. Raising these rates will strengthen the care workforce who provide these services and increase access to care for every North Carolinian. It will also make Medicaid expansion more impactful for the estimated 600,000 people who will gain access to these Medicaid health care services.

“These rate changes are a lasting and transformational investment in behavioral health services and whole-person care in North Carolina,” said NCDHHS Secretary Kody H. Kinsley. “This will improve the foundation of care so every child and adult can get the necessary mental health and substance use disorder treatment when and where they need it.”

The behavioral health care crisis impacts everyone in the state — one in four children and one in five adults are experiencing a mental health need. Rates of anxiety and depression have skyrocketed in recent years, and providers of care have been hard-pressed to keep up. There are dozens of counties in North Carolina that lack a psychiatrist and each day in North Carolina, more than 300 adults and children are waiting in emergency departments for a behavioral health care bed.

“For many, the introduction to behavioral health care is through the crisis system and hospital emergency departments,” said Kelly Crosbie, the Director of the NCDHHS Division of Mental Health, Developmental Disabilities, and Substance Use Services. “We must improve access to routine mental health care and substance use treatment in every North Carolina community, so services are available when people need them.”

“The old reimbursement rates are inadequate; meaning, behavioral health practitioners, including psychiatrists, can’t cover the costs of providing care to individuals covered by Medicaid,” said Dr. Carrie Brown, NCDHHS Chief Psychiatrist. “This change will help to recruit and retain more behavioral health providers, including physicians, psychologists and other licensed professionals like clinical social workers, into the public behavioral health system in North Carolina, which is critical to ensuring access to care for all North Carolinians, regardless of the health care payer.”

NCDHHS received a significant investment in behavioral health care services in the 2023-2025 approved budget. A total of $835 million in one-time and recurring funds was appropriated which represents the single largest investment in behavioral health by the state legislature. Among other things, this critical funding will increase Medicaid payment rates to 100% of Medicare for applicable services like outpatient and inpatient behavioral health services and provide inflation-based increases for most enhanced behavioral health services that do not have a Medicare equivalent. For example, the overall reimbursement for inpatient behavioral health services is expected to increase by 30%. And psychiatric diagnostic evaluation will almost double from the prior rate. All of the Medicaid behavioral health rate increases will be effective for services provided on or after January 1, 2024. Additional information on these increases will be shared through a Medicaid Provider Bulletin.

To ensure adequate access to treatment and support services, many of which help prevent crises, rate funding for diagnostic evaluations and developmental/psychological testing and evaluation will also be increased above the Medicare rate, pending CMS approval. Rates for enhanced substance use disorder services and residential substance use disorder services have either recently been updated or are under consideration for potential increases in 2024 as part of a separate effort related to the NCDHHS 1115 SUD Institution for Mental Disease Demonstration waiver.

The 2023-2025 budget also allows for substantial investments in alternatives to the emergency department such as facility-based crisis services and investments in direct support professionals, including peer support professionals, who are the backbone of any functioning behavioral health, I/DD and TBI care system.

These rate increases will have a positive impact on the more than 2.3 million people served by Medicaid in allowing increased access to behavioral health services and leads the way for other employers and insurers to continue making similar investments. (source)