North Carolina's $0.30-per-unit raise for Innovations waiver direct care work now starts Oct. 1, 2026, with no back pay to July 1. NC Medicaid made the change in a Nov. 10 bulletin that replaces its Sept. 25 bulletin, which had set the increase as effective Oct. 1 "retroactive to July 1, 2026." The September bulletin now carries a note saying it has been replaced.
NC Medicaid gave one reason: "operational delays in the implementation of the rates." The new bulletin says the Oct. 1 date applies to provider rates, and that LME/MCOs must retroactively process provider rates back to Oct. 1, once they have confirmed a provider's use of the money matches what the legislature intended.
What changed, and what didn't
| Sept. 25 bulletin | Nov. 10 bulletin | |
|---|---|---|
| Effective date for provider rates | Oct. 1, 2026, retroactive to July 1, 2026 | Oct. 1, 2026 |
| Add-on per 15-minute unit | $0.30 | $0.30 |
| LME/MCO usage report due | Dec. 1, 2027 | Dec. 1, 2027 |
The money and the math are unchanged. Section 9E.14 of Session Law 2026-41, the state budget, directs $21.3 million in recurring state funds starting in fiscal 2027 to Innovations rate increases so providers can raise direct care pay. With federal match that is about $59.4 million, and about $57.2 million after adjustments for underwriting gain and premium tax built into capitation rates. NC Medicaid divided that by a projected 189.6 million 15-minute units for the year to reach the uniform $0.30 add-on. The bulletin still describes that calculation using the projected units for the full fiscal year and does not say how the July-to-September portion of the year factors in.
The statute itself doesn't fix a start date. It says the increase takes effect on the date the Centers for Medicare & Medicaid Services approves. NC Medicaid's SFY 2027 wage initiative page now says the same thing as the bulletin: fiscal 2027 capitation rates for July 1, 2026, through June 30, 2027, reflect provider increases effective Oct. 1 through June 30.
Which services get it
The add-on applies to Community Networking, Residential Supports, Supported Employment, Respite Care, Community Living and Supports, Day Supports and Supported Living. NC Medicaid left out individual goods and services, home-delivered meals, assistive technology, home and vehicle modifications, community navigator and community transition, natural support education, specialized and financial consultative services, and crisis services and consultation. Rates by procedure code are in the state's DCW Rate Increases Code Table.
The paperwork that unlocks the money
- Attestation first. To get the higher rate, each Innovations provider must file the Innovations Direct Care Worker Wage Increase Attestation and Acknowledgment Form with its LME/MCO, committing to use the money for direct care workers, whether as higher hourly wages, benefits or associated payroll costs.
- No required pass-through share. The law doesn't say what percentage must reach paychecks, but providers must keep records such as payroll journals and show them on request.
- Year-end report. LME/MCOs collect provider data and report to NC Medicaid by Dec. 1, 2027. The law had set Dec. 1, 2026; NC Medicaid moved it, saying it is following the reporting structure used for earlier raises under S.L. 2023-134 and S.L. 2024-1.
- Recoupment. LME/MCOs must claw back funds a provider didn't use for its direct care workers.
NC Medicaid will hold two drop-in office hours on the attestation, documentation and reporting: Nov. 13, 2026, 10 to 11 a.m. ET, and Jan. 11, 2027, 10 to 11 a.m. Call-in details are in the bulletin.
What this means for providers and DSPs
- Re-check payroll plans built on July 1. Any provider agency that promised staff a raise or a lump sum covering July through September, based on the September bulletin, should now plan on rate money starting Oct. 1 only. Adjust budgets and staff messages before the next payroll cycle, not after.
- No attestation, no retro pay. Retroactive payments back to Oct. 1 depend on the LME/MCO validating how a provider uses the money. If the attestation isn't on file, October and November claims won't be reprocessed at the new rate. The Nov. 13 office hours are the quickest place to ask.
- What DSPs can expect. For DSPs on Innovations residential, day, respite, community living and employment services, any increase tied to this money now traces to Oct. 1. Because the law sets no fixed pass-through, the size of a raise, or whether it comes as wages or benefits, depends on each employer. Staff can ask their supervisor or HR how their agency plans to use it.
- Keep the paper trail now. The usage report isn't due until December 2027, but it covers this fiscal year. Agencies that tag the add-on in payroll from October will have an easier time when the LME/MCO asks.
Direct Support News first reported the $0.30 add-on on Sept. 25, and the $21.3 million appropriation in July.