Raising pay for direct support staff in North Carolina's Innovations waiver and private ICFs to $18 an hour would cost about $78.2 million a year in state money, or $242.1 million in total Medicaid funding, the state Department of Health and Human Services told legislators in a July 20, 2023, report.
What the report found
The report, required by a 2022 state law, covered the Innovations Medicaid waiver and privately run ICF/IID facilities. It used a trade group estimate that average DSP pay in Innovations was about $11.50 an hour in 2019. After rate increases in March 2022, the department estimated the effective wage at about $13.12 an hour.
The department, working with consultant Mercer, priced two targets:
- $15 an hour: about $93.3 million a year in total funding, or $30.1 million in state money
- $18 an hour: about $242.1 million a year in total funding, or $78.2 million in state money
The $18 target, which trade groups had recommended, would raise each fee schedule rate by about $6.51 an hour, including a 25% allowance for employer-paid benefits and taxes. The department recommended the $78.2 million state increase.
Why this mattered for providers and DSPs
The report gave legislators an official price for moving DSP pay closer to competing jobs. It also showed that a rate increase has to cover payroll taxes and benefits, not just the hourly wage, which is why the rate bump needed for $18 was larger than the wage gain itself.