When a woman experiencing chronic pain visited the emergency department at the Scotland Memorial Hospital a few years ago, doctors encouraged her to follow up with a primary care provider.
But she didn’t, and ultimately ended up back at the Laurinburg emergency department. The cycle continued for months.
When Scotland Health, which owns the hospital, launched a home-health program in 2022 aimed at keeping patients out of the emergency department by connecting them to preventative care and other community resources, the woman became one of its first patients.
Precious McArn, the lead community health worker for Scotland Health-at-Home, was shocked when she visited the woman’s address for the first time. She lived in a backyard tool shed, where her only water supply was a garden hose. She used a bucket as a toilet.
“She was hesitant with me helping her at first,” said McArn, who didn’t give the woman’s name to protect her privacy. “She felt like we were trying to come take her out of her comfort zone. She thought we were going to put her in a home or get [the Department of Social Services] involved. I had to be like, ‘No, that’s not what we’re here for. We’re here to help you.’”
McArn spent weeks gaining the woman’s trust. Eventually, McArn accompanied her to an appointment with a doctor, who then referred her to an oncologist after examining a lesion on her chest. With McArn by her side, the woman was diagnosed with breast cancer.
Now the woman goes to doctor appointments on her own, and McArn helped her find a suitable place to live.
“She still calls me every other day,” McArn said, “but I wouldn’t have it any other way. I love it.”
Scotland Health leaders say the program has been successful, with a 91 percent drop in preventable emergency department visits among the 662 participants this year. But they worry cuts to Medicaid will force them to re-evaluate spending for the program.
Without a state budget deal to fund increasing Medicaid costs, the N.C. Department of Health and Human Services cut reimbursement rates—the amount paid to providers who care for low-income patients enrolled in the government health program—between 3 percent and 10 percent depending on the service.
With less money coming in, Scotland Health leaders say they must make tough decisions to rein in spending. Community-based programs could be first on the chopping block.
The payment cuts particularly hurt rural health care systems like Scotland Health, where many patients have Medicaid, hospital administrators say. Nearly 39 percent of the state’s 3.1 million Medicaid enrollees live in rural areas, according to the NC Rural Center.
While the reduced state funding poses immediate challenges, Medicaid cuts in the One Big Beautiful Bill Act signed into law by President Donald Trump in July could deal another significant blow to rural hospitals. The cuts threaten North Carolina’s Medicaid expansion, which has allowed more than 685,000 residents to enroll since late 2023.
Scotland Memorial is among 54 hospitals in the state that could be forced to close due to the federal cuts, according to an analysis by the Cecil G. Sheps Center for Health Services Research at UNC-CH.
“It’s a multiple whammy problem,” said David Pope, Scotland Health CEO and president. “We’re having to find other sources of revenue to be able to pay for the services that are most needed, that we know keep people out of the hospital, out of the [emergency department].”
‘We’re Walking Beside Them’
McArn knows what it’s like to struggle. She and her brother were raised by a single mother in Robeson County.
As an adult, McArn has relied on Medicaid and the Supplemental Nutrition Assistance Program, commonly known as SNAP or food stamps. She said she was homeless after Hurricane Matthew destroyed everything she owned in 2016—and then again after Hurricane Florence in 2018.
She said the experiences have helped her better understand the challenges her clients face.
More than 28 percent of Scotland County residents live in poverty, the highest rate in North Carolina, according to the state Department of Commerce. The county had the state’s eighth-highest unemployment rate in August.
“It’s a multiple whammy problem.”
David Pope, Scotland Health president and CEO
“They’re having to decide whether or not they should pay for a bill or whether they should pay for their medication,” McArn said of her clients.
McArn said Scotland Health-at-Home empowers patients to take better care of themselves by breaking down barriers like transportation and inadequate housing.
“This job shows me how powerful consistency, support, and our compassion can be for our patients,” she said. “We’re walking beside them until they feel like they do it on their own. And they know if they can’t do it, they can call us and we’ll be right back there with them.”
The Scotland Memorial Foundation, Scotland Health’s fundraising arm, raises about $1 million every year to pay for programs like Health-at-Home, which also receives grants from the state Office of Rural Health and the Duke Endowment.
If the hospital system doesn’t have enough money coming in, it’ll have to prioritize where its foundation funding goes based on the highest need, said Misty McMillian, the foundation’s executive director.
The N.C. Department of Health and Human Services cut Medicaid reimbursement rates on October 1 because of a $319 million shortfall to cover rising program costs.
The state House and Senate have both agreed to fund the Medicaid rebase, the projected increase in costs to deliver care to people covered by the health insurance. But they have not yet passed the legislation because they disagree on whether to boost funding for a new children’s hospital in Apex.
Before the reimbursement cuts, Scotland Health got about 20 cents on the dollar for care provided to Medicaid patients, said Lucien St. Onge, chief operations and financial officer. The payments added up to about $48 million last year, accounting for more than 18 percent of the health system’s revenue.
Now, Scotland Health earns about 18 cents on the dollar, a 10 percent reimbursement rate reduction, the highest instituted by DHHS. The system will likely lose between $3 million and $4 million, St. Onge said.
Other hospital systems are also feeling the crunch. ECU Health, which serves 29 counties in eastern North Carolina, projects it will lose $50 million this fiscal year if the reimbursement cuts remain in place, spokesperson Brian Wudkwych said.
At Cape Fear Valley Health, which has hospitals in Cumberland, Hoke, Bladen, and Harnett counties, Medicaid reimbursements account for about 23 percent of the health system’s revenue—roughly $30 million a year, according to Chaka Jordan, vice president of marketing and communications.
Ultimately, Jordan said, the Medicaid cuts could lead to more emergency department visits.
“We anticipate sustained cuts would also create access challenges, particularly if independent providers are forced to limit Medicaid patients,” she told CityView. “This could, in turn, increase emergency department usage and strain safety-net resources.”
Emergency departments must treat all patients, regardless of their ability to pay.
Federal Cuts
North Carolina is also bracing for a $49.9 billion decrease in federal Medicaid funding over the next decade as a result of H.R.1, the One Big Beautiful Bill Act, according to DHHS.
The cuts could have wide ramifications because of a “trigger” state lawmakers included when they expanded Medicaid. The provision states Medicaid expansion should be “discontinued as expeditiously as possible” if specified state funding sources fall short. North Carolina funds Medicaid expansion through a mix of sources, including taxes on hospitals. H.R.1 caps those taxes at rates lower than what North Carolina currently collects, risking the health care of thousands if the General Assembly doesn’t change the law.
Health advocates hope state lawmakers will continue the expansion. At Scotland Health, Pope hopes so, too. The health system has seen a 9 percent drop in uninsured patients since 2015, largely after Medicaid expansion went into effect, he said.
“We’re going to be on the front line. We’re going to be the ones that people are coming to to find additional resources to assist with the Medicaid cuts, the food insecurities, and the transportation.
Precious McArn, lead community health worker at Scotland Healthcare System
Hospitals will bear 70 percent cuts, according to the state Department of Health and Human Services, as they will be forced to provide more uncompensated care. Rural hospitals could see $3.7 billion less funding.
The Rural Health Transformation Program could reverse half of the cuts to rural hospitals, DHHS leadership said when announcing they’d apply for the fund. Known as the rural health fund, the program was added to H.R.1 to appease congressional Republicans skeptical of the bill’s Medicaid cuts.
The fund will provide $50 billion over five years, with half shared among states and half awarded based on a points system. Some Republican members of Congress have expressed concerns that the points system, determined by factors like rural population size and technological innovation, could allow some urban hospitals and health technology companies to get a share of the funding.
North Carolina submitted its application to the fund on November 5 and should learn how much it will get by December 31. The state says part of the money would establish locally governed “hubs” to connect rural residents to medical, behavioral health, and social services.
St. Onge said the money won’t be enough.
“When we put that on the scale and say, ‘With what’s going away and what that would bring in, what does that net out for us?’” he said. “Unfortunately, that is pennies on the dollar compared to the directed [Medicaid] payments they are talking about eliminating.”
Long Wait for Budget Deal
McArn said she and her team are dedicated to helping patients during financial uncertainty.
“We’re going to be on the front line,” she said. “We’re going to be the ones that people are coming to to find additional resources to assist with the Medicaid cuts, the food insecurities, and the transportation.”
Rep. Garland Pierce, a Democrat who represents Hoke and Scotland counties in the state House, said he has received calls from constituents who are anxious about the budget deadlock in the General Assembly.
“We can’t continue to do our citizens like this in North Carolina,” Pierce said. “We need to find a way to work it out and put people over politics.”
House Speaker Destin Hall and Senate leader Phil Berger have said they don’t expect state lawmakers to vote on anything else this year. The decision prompted Gov. Josh Stein to call an extra session on November 17 specifically to fund Medicaid.
Hall and Berger have said DHHS could have waited to make the cuts, but state health leaders say they were necessary to avoid running out of money before the end of the fiscal year.
If the General Assembly fully funds DHHS’s requested Medicaid budget, the department’s leadership said they will reevaluate whether reimbursement rate cuts can be decreased or canceled. Some cuts to providers of behavioral health treatments for children with autism have already been paused because of a lawsuit in Wake County Superior Court.
With no quick fix, Pope worries about the future, including patients enrolled in Scotland Health-at-Home.
“These are folks that are friends or neighbors, people we go to church with, people that your kids are in school with,” he said. “To think that you can cut programs in one of the most challenged areas of the state without that impacting everybody, it will. It absolutely will.”