How North Carolina pays for disability services

Waiver inventory

Excluded: CAP/DA (aging and adult physical disability) and CAP/C (medically fragile children), which are not the state's primary vehicle for people with DD. The TBI Waiver is administered alongside Innovations and shares the Oct. 1, 2025 rate action, but enrollment was not found. North Carolina has no 1915(k) Community First Choice option.

State-only funded programs

North Carolina maintains a parallel set of state-funded (non-Medicaid) service definitions administered by the Division of Mental Health, Developmental Disabilities and Substance Use Services and purchased through LME/MCO single-stream allocations. Index: ncdhhs.gov

• State-Funded Residential Supports I/DD and TBI, eff. 12/04/2023, Levels 1 to 3, daily unit, codes YM846/YM847/YM848: ncdhhs.gov
• State-Funded Supported Living Periodic I/DD and TBI, eff. 12/04/2023, 15-minute unit, code YM854, capped at 28 hours per week: ncdhhs.gov
• State-Funded Community Living and Support, eff. 09/28/2023: ncdhhs.gov
• State-Funded Day Supports, eff. 12/04/2023: ncdhhs.gov
• State-Funded Respite, eff. 09/28/2023: ncdhhs.gov
• State-Funded Supported Employment, eff. 06/26/2024: ncdhhs.gov
• State-Funded Adult Developmental Vocational Program and State-Funded Community Rehabilitation Program (sheltered workshop), both eff. 06/01/2023: ncdhhs.gov and ncdhhs.gov

Annual appropriation: not found. I checked the DMHDDSUS division page, the state-funded service definitions index, and the July 15, 2026 Inclusion Connects report, none of which publish a single-stream dollar figure by disability group.

County / regional / local funding

The sub-state structure is regional rather than county-based. Four LME/MCOs operate as Tailored Plans and receive capitation plus a state single-stream allocation for non-Medicaid services: Alliance Health (7 counties), Partners Health Management (15), Vaya Health (32), Trillium Health Resources (46), through Sept. 30, 2026. Vaya Health and Partners Health Management merge into Vaya Partners on Oct. 1, 2026, covering 47 counties and leaving three Tailored Plans statewide. Directory: ncdhhs.gov

No county property tax levy or county general revenue stream dedicated to I/DD services was identified in the sources retrieved.

Funding scale

• FMAP, FFY 2026: 64.62 percent. kff.org
• Innovations authorized capacity SFY 2025-26: 14,736 slots; 14,188 filled as of March 31, 2026; 51 of 161 reserve slots remaining. ncdhhs.gov
• New Innovations slots appropriated for SFY 2026-27: zero. Same source.
• Innovations Registry of Unmet Needs (waitlist): 21,449 people as of March 31, 2026; 255 removed during the quarter; 47.1 percent of people on the list were receiving some I/DD service, up from 36.9 percent. Same source. Average wait time is not published.
• 1915(i) recipients with I/DD: 13,100, Jan to Mar 2026; 3,798 completed assessment and approval in the quarter; about 95 percent of assessments finished within 90 days. Same source.
• Individual cost limit on Innovations: $184,000 per plan year, raised from $135,000 effective March 1, 2024. medicaid.ncdhhs.gov
• Rate investment: $176 million recurring state and federal funds for Innovations provider rates, Current Operations Appropriations Act of 2023, effective July 1, 2023. medicaid.ncdhhs.gov
• Total annual I/DD spending all funds, Innovations waiver spending, and state versus federal split: not found. Appendix J of the approved waiver application was not retrievable in the published download.

Residential funding detail

Innovations funds two residential paths. Residential Supports Levels 1 through 4 is the 24-hour licensed and unlicensed option, billed as a daily per diem, codes H2016 (Level 1), T2014 (Level 2), T2020 (Level 3), H2016 HI (Level 4), with CG and GT modifier variants. Settings for new participants are limited to the person's own residence, the family home, another private family's home, or licensed settings of six beds or fewer for existing facilities and four beds or fewer for newly developed facilities. Supported Living funds people in homes they control, at graduated levels. Alternative Family Living, the state's host home model, is delivered under Residential Supports in either a licensed or unlicensed configuration.

Adults age 22 and older receiving Residential Supports are limited to no more than 40 hours per week of any combination of community networking, day supports, and supported employment. Source: trilliumhealthresources.org

Room and board is not Medicaid-payable and is not state-funded. The state-funded residential definition is explicit: "Payments for Residential Supports do not include payments for room and board or the cost of facility maintenance and upkeep." Room and board is met from the person's SSI, SSDI, or other personal income. Source: ncdhhs.gov

Payment structure is a daily per diem for Residential Supports and state-funded Residential Supports, and a 15-minute unit for Supported Living Periodic and Community Living and Supports. Acuity is captured through level assignment (SNAP 2/3/4 or SIS C/D/E for the state-funded service) rather than through a separate acuity multiplier on the rate.

Comparable service rates

North Carolina does not publish Innovations rates in a single public fee schedule. Rates are set in LME/MCO provider contracts subject to a state-directed payment floor, and the two published rate actions below apply across all services.

Official rate schedule links

• NC Medicaid Fee Schedule and Covered Code portal (all updates since Nov. 3, 2022): ncdhhs.servicenowservices.com
• NC Medicaid fee schedules index: medicaid.ncdhhs.gov
• Fee schedules archive: medicaid.ncdhhs.gov
• Rate reduction bulletin, updated Oct. 30, 2025, with service-by-service reduction percentages: medicaid.ncdhhs.gov
• NCTracks announcement of the same action: nctracks.nc.gov
• Trillium 2026-2027 Innovations Benefit Plan with service codes, units, and limits: trilliumhealthresources.org

Notable features and flags

• Oct. 1, 2025: NC Medicaid cut Innovations, 1915(i), and TBI Waiver reimbursement to 97 percent of rates paid on Sept. 30, 2025, a 3 percent reduction, to hold the program within legislative appropriation. Personal care services outside the waiver took an 8 percent cut. medicaid.ncdhhs.gov
• SFY 2026-27: the General Assembly appropriated zero new Innovations slots, while the waitlist grew to 21,449 as of March 31, 2026. Ratio is roughly 1.51 people waiting per filled slot. ncdhhs.gov
• Jan. 1, 2025: 1915(b)(3) services ended. All I/DD beneficiaries with open b3 authorizations moved to 1915(i). The 1915(i) benefit has become the primary support for people on the Innovations waitlist, which is why the served share of the waitlist rose from 36.9 to 47.1 percent. medicaid.ncdhhs.gov
• July 1, 2024: Behavioral Health and I/DD Tailored Plans launched, carving Innovations into integrated managed care run by four LME/MCOs.
• Oct. 1, 2026: Vaya Health and Partners Health Management merge into Vaya Partners, reducing the state to three Tailored Plans covering 100 counties.
• March 1, 2024: Innovations individual cost limit raised from $135,000 to $184,000 per waiver year, the first increase in over a decade. medicaid.ncdhhs.gov

Confidence

Solid: enrollment, slot capacity, waitlist size, 1915(i) I/DD counts, waiver control number and cost limit, the Oct. 1, 2025 rate reduction, the July 1, 2023 rate increase mechanics, the state-funded service definitions and their units and codes, FMAP. These come from NCDHHS quarterly reporting, the approved waiver application, CMS SPA documents, and NC Medicaid bulletins. Estimated or partial: nothing in this profile is estimated; where a figure was unavailable I said so. Could not find: total annual I/DD spending all funds, Innovations waiver spending, the state versus federal share, per-participant cost, the single-stream state appropriation for I/DD, average waitlist wait time, and any published dollar rate for an Innovations service. North Carolina publishes Innovations rates only through the NC Medicaid Covered Codes and Fee Schedules portal, which is behind a robots restriction and was not retrievable in this session, and the LME/MCOs treat contracted rates as contract terms rather than public schedules. Appendix J of the approved 1915(c) application, which would carry Factor D per-participant costs, is not included in the published download.

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