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NCDHHS Secretary Sangvai has released a statement detailing the service reductions and provider rate cuts that will take effect on October 1, 2025.

These changes are being implemented to keep the Medicaid program within the rebase and administrative funding allocated in HB 125, passed on July 30. You can view the official letter from Secretary Devdutta Sangvai, M.D., J.D., M.B.A. here and the Provider Expenditure Reductions information here. 

• HB 125 included $600 million for both the Medicaid rebase and the Medicaid Oversight Fund. Given the program’s administrative requirements, this appropriation results in only $500 million for the rebase, and effectively $82 million for the Medicaid Oversight Fund, leaving a $319 million shortfall for rebase, and a $33 million shortfall for the Medicaid Managed Care Oversight Fund.
• In a managed care environment, NCDHHS is required by federal regulations to provide actuarially sound capitation rates to managed care organizations. Therefore, there are only two ways to address a shortfall from an insufficient rebase: (1) reduce optional services and/or (2) reduce provider rates.
• The significant size of the current funding gap ($319 million) requires a broad-based approach. As outlined in the attached letter, every provider will sustain a minimum of a 3% rate cut, with some services absorbing substantially larger cuts (rate reductions of 8% or 10% for select providers), and elimination of certain services altogether, all with an effective date of October 1, 2025.

Behavioral Health Access Program (BHAP) to Replace SHP Clear Pricing Project (CPP)

NCPA previously reported that the State Health Plan (SHP) announced plans to end the Clear Pricing Project (CPP) on December 31, 2025, as part of its efforts to stabilize the $507M deficit. SHP has created a behavioral health focused replacement called the Behavioral Health Access Program (BHAP).

BHAP will take effect on 1/1/2026 and includes a custom fee schedule for psychotherapy, evaluation and management, and psychological testing, set at 140% of current year Medicare rates. TMS codes are set at Aetna Market Fee Schedule (AMFS) rates.

If you are a current CPP provider or participate in the SHP network, you must opt into BHAP before 12/2/2025. If you enroll after that date, the BHAP fee schedule will take effect 30 calendar days after you sign the amendment online.

If choose not to enroll in BHAP, you will remain in network for SHP and be reimbursed at your standard Aetna contract rates.  NCPA recommends that members review their Aetna fee schedules to determine if the BHAP rates would be more favorable. 

Click here for the BHAP FAQs.

Current CCP providers my have received this letter. 

Additional Information

• Aetna SHP site for providers Go.Aetna.com/ncshp
• SHP provider site (includes their 2026 benefit plan comparison): shpnc.gov/nc-state-health-plan-network