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The Medicaid reimbursement rates for most behavioral health and traumatic brain injury services are receiving what state health officials are touting as “historic increases” and “transformative.”

The Republican-sponsored state 2023-24 and 2024-25 budgets included a combined $835 million in one-time and recurring funds for the N.C. Department of Health and Human Services.

There are currently about 2.3 million North Carolinians as Medicaid recipients. Another 600,000 will be added over the next year via Medicaid expansion that formally starts Dec. 1.

It is the first rate increase in more than a decade for most mental health, substance use and intellectual and developmental disabilities services. The rate increases will be effective for services provided on or after Jan. 1.

DHHS called it “the single largest investment in behavioral health by the state legislature.”

“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, DHHS’ 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.”

Among other things, the funding will increase Medicaid payment rates to 100% of Medicare for applicable services, such as outpatient and inpatient behavioral health services.

It also provides inflation-based increases for most enhanced behavioral health services that do not have a Medicare equivalent.

“These rate changes are a lasting and transformational investment in behavioral health services and whole-person care in North Carolina,” state Health Secretary Kody Kinsley said.

“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 overall reimbursement for inpatient behavioral health services is expected to increase by 30%, while psychiatric diagnostic evaluation will almost double from the prior rate.

Additional information on these increases will be shared through a Medicaid provider bulletin.

Statewide need

DHHS said that behavioral health care crisis impacts everyone in the state with one in every four children and one in every five adults experience 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,” DHHS said.

DHHS said there are dozens of counties in North Carolina that lack a psychiatrist. 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, director of the state 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.”

Rate funding for diagnostic evaluations and developmental/psychological testing and evaluation also will be increased above the Medicare rate, pending federal Centers for Medicare and Medicaid Services approval.

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.


The reimbursement rate increases will help offset some of the additional operational costs affecting behavioral health providers, said Billy West, chief executive of DayMark Recovery Services, a provider of behavioral health services in the Triad and statewide.

Yet, West said that while “there have been some real positive things like Medicaid Expansion happen, but there are some real problems that drive up overhead, too.”

West cited as an example there are different rates for providers offering services through the planned tailored plan format, the State Funding for Indigent plan and for pre-paid health plans.

“They all cover Medicaid, all different,” West said. “They all have variations of different rules, rates and so on. It’s not as much as any are bad as it is they are all different.”

West said the reimbursement rate increase doesn’t cover private insurance “or the ever-growing number of Accountable Care Act plans.

“The ACA plans are terrible for providers of behavioral health in general. They get people that are 300% of the poverty level to sign up for basically free. That is good, these people now have plans that will cover them if they have a serious illness.

“But to see a provider like us, well, they have to pay the first $5,000 or even more before the plan pays anything. If they are 300% of the poverty level how are they going to pay anything? Do we turn them away?”

West also cited that crisis services, such as behavioral health urgent care and facility based crisis, may pay different rates.

“No matter the current or future benefits of the privatization of the Medicaid payers, it hasn’t come without significant growing pains and increased overhead for the providers that are paid rates that doesn’t have built in our work to mature this new system.”

The increased reimbursement rates could serve as an incentive for more providers to accept more Medicaid recipients or start to serve them, local behavioral health advocate Laurie Coker said.

Coker is president of advocacy group NC CANSO and head of GreenTree, a community-based, peer-offered crisis support group. She also served on the board of CenterPoint Human Services, a former behavioral health managed care organization serving Forsyth County.

“It is certainly time to increase reimbursement rates for publicly funded mental health services, and the shortage of practitioners does indeed indicate this,” Coker said.

“If we want public dollars to produce better mental health, we also need to re-examine the services now offered through our state’s system for their impact.

“We also need to focus on funding processes — using Medicaid or other sources such as the mental health block grant — that fund the access facilitation to treatment and other resources according to the social determinants of health.”

Coker said it remains unnecessarily complicated and challenging to access mental health services locally and statewide.

“Those who may need treatment the most often face the biggest impediments to seeking help,” Coker said.

“If we want to enhance the outcomes of the Medicaid system, we need flexibly funded peer services that serve as the fabric of support under rather leaky system safety nets.”

Journal Now

Richard Craver

Original Article: https://journalnow.com/news/local/transformative-rate-hikes-set-for-behavioral-health-providers/