North Carolina House and Senate leaders have reached an agreement on legislation to cover a shortfall in the state’s Medicaid program while tightening oversight of one of North Carolina’s largest government expenditures.

House Bill 696 would allocate $319 million to cover the Medicaid rebase for the remainder of the fiscal year. Lawmakers say the measure also includes a series of reforms to reduce waste, fraud, and abuse within the program.

The agreement comes as Medicaid costs have exceeded earlier projections, prompting Republican leaders’ concerns about long-term sustainability and program accountability.

“Medicaid should serve the people who truly need it, and this bill makes sure that happens,” House Speaker Destin Hall, R-Caldwell, said in a statement. “After Gov. Stein and his administration let costs run wild, we’re tightening things up by adding common-sense guardrails that cut down on waste, fraud, and abuse in the program. North Carolina taxpayers deserve confidence that their money is being spent wisely, and patients deserve a system that prioritizes care for those who depend on it the most.”

Hall echoed those concerns in a post on social media, criticizing the governor’s handling of Medicaid spending and emphasizing the need for stricter oversight.

HB 696 would implement several policy changes designed to strengthen eligibility verification and program integrity. Among them:

  • Shifting eligibility reviews from quarterly to monthly
  • Requiring stronger documentation standards and limiting self-attestation
  • Mandating citizenship and immigration status verification during enrollment and redetermination
  • Directing the state auditor to conduct a comprehensive review of Medicaid and related workforce programs
  • Requiring annual reports from the Department of Health and Human Services on efforts to combat fraud and abuse

The bill also calls for DHHS to develop a long-term “Medicaid integrity and efficiency plan” to identify cost-saving opportunities and reduce administrative burdens.

In addition, lawmakers included new guardrails on Applied Behavior Analysis (ABA) therapy, a service used to treat children with autism. These include limits on telehealth use, stricter supervision requirements, and updated credentialing standards for providers. These changes aim to ensure quality care while controlling costs.

Beyond Medicaid, the legislation includes funding for several state agencies and programs in the upcoming fiscal year:

  • $80 million in nonrecurring funds for the Department of Adult Correction
  • $13.1 million recurring and $8.5 million nonrecurring for the Division of Motor Vehicles
  • $10 million recurring for scholarships benefiting children of wartime veterans
  • $2.5 million recurring for the State Bureau of Investigation

Many of the bill’s policy changes are scheduled to take effect in late 2026 or 2027, while some provisions, including immediate Medicaid fund allocation, apply retroactively to the current fiscal year. Key reforms to eligibility verification and guardrails for specific services such as ABA therapy will be rolled out according to the implementation schedule outlined in the legislation.

The measure passed the House 112Y-3N and the Senate 45Y-3N on April 28th, 2026.

In a statement released after the vote, House Speaker Destin Hall said, “North Carolina’s Medicaid costs are growing at an unsustainable rate, and Gov. Stein and his administration have shown little interest in tackling the waste, fraud, and abuse driving that growth. North Carolinians deserve a program that protects taxpayer dollars and delivers care to those who truly depend on it. This legislation will do just that, restoring responsibility and integrity to Medicaid.”