Predictable Funding for Better Rural Health
NC Medicaid is developing a Medicaid Primary Care Capitation Pilot Program as part of the North Carolina Rural Health Transformation Program (NCRHTP). The pilot would test a new way of paying primary care practices that serve Medicaid managed care members in rural communities.
Instead of receiving payment for each individual covered service, participating practices would receive a prospective per-member per-month (PMPM) payment for a defined set of primary care services.
The pilot is currently planned to begin January 1, 2028.
Implementation of the proposed pilot remains contingent upon relevant federal approvals and necessary contract updates between NCDHHS and Medicaid managed care health plans.
Northwest AHEC Practice Support Is Here to Help
Transitioning to a prospective payment model can affect many parts of a practice, including billing, workflows, care management, financial planning, and reporting.
Working as part of the NC AHEC network, Northwest AHEC Practice Support can help practices assess readiness and prepare for implementation.
NC AHEC Practice Support assistance is available at no cost and includes support with:
- Required readiness assessments
- Identifying capacity-building needs
- Implementation planning
- Go-live technical assistance
- Sustainability support
- Education and training
For assistance, email practicesupport@ncahec.net.
NC AHEC Practice Support:
https://www.ncahec.net/practice-support/
NC AHEC:
https://www.ncahec.net/
Frequently Asked Questions
These FAQs provide information about the proposed Medicaid Primary Care Capitation Pilot and will be updated as additional program details become available.
What is the Medicaid Primary Care Capitation Pilot?
NCDHHS is proposing a primary care capitation pilot through Medicaid managed care health plans. Participating practices would receive prospective PMPM payments for a defined set of services rather than separate fee-for-service payments for those services.
The pilot is currently scheduled to begin January 1, 2028.
Who may be eligible to participate?
For the first phase, primary care providers may be eligible if they:
- Meet at least NC Medicaid Advanced Medical Home Tier 2 standards
- Do not currently operate under certain alternative payment arrangements in the Medicaid State Plan, including FQHCs/FQHC look-alikes and federally designated Rural Health Clinics
- Serve a required percentage of Medicaid managed care members who live in rural areas
NCDHHS is still developing the minimum rural-member percentage.
Does the practice itself have to be located in a rural county?
Not necessarily. The pilot is designed around where Medicaid members live, rather than simply the physical location of the practice.
A practice outside a rural county may potentially qualify if a sufficient percentage of its assigned Medicaid members live in rural areas.
Can FQHCs and Rural Health Clinics participate?
FQHCs, FQHC look-alikes, and federally designated Rural Health Clinics are not expected to participate in the first phase because they currently operate under other payment arrangements specified in the Medicaid State Plan.
NCDHHS is considering these providers for a potential second phase.
Can Local Health Departments participate?
NCDHHS is still considering participation by Local Health Departments because of their existing payment structure.
Is participation voluntary?
Yes. Providers wishing to participate will need to apply. NCDHHS expects applications to become available in spring 2027.
Will practices have to contract with every Medicaid managed care plan?
No. NCDHHS intends to require Standard Plans and Tailored Plans to offer the model to selected pilot participants, but participating providers would not be required to contract with every plan.
What services would be included in the PMPM?
Services currently identified for inclusion include:
- Regularly occurring office visits
- Preventive screenings
- Telehealth
- Home visits
Vaccine administration, laboratory services, maternity-related services, and certain less predictable office procedures are excluded.
Services included in the PMPM would not also receive separate fee-for-service payment.
What happens to services that are not included in the PMPM?
Providers would continue to bill Medicaid managed care plans for services outside the PMPM on a per-service basis or under another arrangement defined in the provider's agreement with the Standard Plan or Tailored Plan.
Providers would also continue fee-for-service billing when providing services to Medicaid members who are not assigned to the practice.
Will practices still submit claims?
Yes. Practices will be required to submit encounter information for services included in the PMPM. That information will support quality measurement and future rate development.
Claims will continue to be required for services that are not included in the PMPM and for services provided to members who are not assigned to the practice.
Will AMH Tier 3 care management payments continue?
Yes. Providers participating in Advanced Medical Home Tier 3 or Advanced Medical Home Plus will continue to receive care management payments through those programs.
When will practices know the PMPM payment amounts?
NCDHHS intends to provide preliminary payment information in early 2027.
Exact adjustments and payment amounts will not be known until providers have been selected for the pilot.
Will the PMPM be reconciled later?
The service-based PMPM would generally not be subject to reconciliation or recovery.
An exception would occur if a practice received a PMPM payment for a member who was not actually assigned to the practice during that month.
Is there a quality bonus?
NCDHHS is proposing an optional upfront quality bonus payment based on performance during the pilot.
Practices choosing to receive an upfront quality bonus would be subject to reconciliation if they do not ultimately achieve the specified performance targets. This reconciliation would not affect the regular PMPM payments.
Additional information about quality measures, payment administration, and the reconciliation process will be provided as the model is finalized.
Will funding be available to help practices prepare?
Potentially. Capacity-building funds are intended as temporary upfront funding to support practices transitioning into the new payment model.
NCDHHS plans to release additional information about capacity-building funds during the first quarter of 2027.
Providers seeking capacity-building funds will need to apply for those funds at the same time they apply to participate in the pilot.
Key Dates
- November 9, 2026: Provider feedback and non-binding indication-of-interest deadline
- Early 2027: Final program details, preliminary payment-rate information, and capacity-building information expected
- Spring 2027: Provider applications expected
- Late spring 2027: Participants selected and capacity-building awards released; selected providers submit binding letters of commitment
- Mid-to-late 2027: Contracting with participating providers and distribution of capacity-building funds
- January 1, 2028: Planned launch of the prospective payment model
All dates are contingent on relevant federal approvals and contracting between NCDHHS and Medicaid managed care plans.
Questions? Northwest AHEC Practice Support Can Help
If your practice is considering the Medicaid Primary Care Capitation Pilot, you do not have to navigate the transition alone.
Northwest AHEC Practice Support can help your team understand the model, assess readiness, identify operational needs, and prepare for implementation.
Contact Practice Support:
practicesupport@ncahec.net
NC AHEC Practice Support:
https://www.ncahec.net/practice-support/
NC AHEC:
https://www.ncahec.net/
Additional Medicaid Primary Care Capitation Pilot FAQs:
https://www.ncahec.net/practice-support/om/p/DG2ortf11bZtRXJjMEjWEK7R
We Want to Hear From You
NC Medicaid is seeking feedback from providers and practices as it develops the final pilot model.
You can use the feedback form to:
- Provide structured feedback on the proposed model design
- Ask questions that have not yet been addressed
- Indicate your interest in potentially participating in the pilot
- Share questions or concerns that may help inform implementation and future educational support
Indicating interest is non-binding and does not require a provider or practice to move forward with an application.
Feedback Deadline: November 9, 2026
NC DHHS will consider provider feedback as it develops the final model design.
Provide Your Feedback:
https://forms.cloud.microsoft/g/ZU8cKa9Mij
