Direct Care Worker Rate Increases

Under North Carolina Senate Bill 257, the North Carolina General Assembly has allocated funding to increase rates for providers offering services through the Innovations 1915(c) waiver. Please see the announcement from NC Medicaid. As a result, the State is implementing a $0.30 per 15-minute unit add-on to the reimbursement rate of a subset of Innovations services. You can find the services in the DCW Rate Increases Code Table.  The effective date of the rate increases is October 1, 2026.

Alliance Health has loaded rates effective October 1, 2026, so providers can begin billing the new rates immediately. Alliance Health will evaluate provider- and member-specific rates and enhanced rates separately and release further communication to impacted providers, if applicable.

The Alliance fee schedule has been posted with updated rates reflecting the October 1, 2026 changes.

Alliance will not re-adjudicate claims submitted for a lesser rate.  Providers have 365 days to submit replacement claims

The intent of the rate increase is so that providers can increase the hourly wages of the direct care workers (DCWs) who meet the legislative DCW definition (9E.14(b)):

“Innovations direct care worker under this section includes all workers required for compliance with, or delivery of, the relevant Innovations waiver service definitions and the delivery of a unit of Innovations services. Individuals in the definition of direct care worker to be applied shall include only caregivers who are contracted for the provision of services in a legally appropriate manner”   

To receive the rate increase, Innovations waiver services providers must submit the DCW Wage Increase Attestation and Acknowledgment Form to their respective LME/MCOs. This form documents each provider’s commitment to use the rate increases according to legislative requirements, and “to the benefit of its Innovations Waiver DCWs, including in the form of an increase in hourly wage, benefits, or associated payroll costs.” The forms should be sent to DCWattestation@alliancehealthplan.org.

S.L. 2026-41 requires providers, LME/MCOs, and NC Medicaid to report on providers’ use of the DCW rate increases. Providers must keep documentation on their use of the rate increase (e.g., payroll journal) and make that documentation available to the LME/MCO and/or NC Medicaid to satisfy reporting requirements. The LME/MCOs shall work directly with their respective eligible Innovations Waiver providers to collect and aggregate this data and submit a report to NC Medicaid by the revised date of December 1, 2027.

The LME/MCO will notify NC Medicaid if a provider does not submit a Year-End Aggregate Report documenting valid usage of the funds for a given year. As directed by the legislation, if determined necessary, LME/MCOs shall recoup funds given to the provider but were not used in a manner consistent with the legislated requirements.

NC Medicaid strongly encourages LME/MCOs and Innovations Waiver providers to visit the Direct Care Worker Wage Increase Initiatives – SFY 2027 webpage and the DCW Wage Increase Initiative FAQs – SFY 2027 for more information.