By Andrew R. Jones
Nearly 40 employees connected to North Carolina’s Medicaid Ombudsman program, including nine at Pisgah Legal Services, will lose their jobs by the end of the year because of a $33 million shortfall in the state’s Medicaid Managed Care Oversight Fund.
The Medicaid Ombudsman program, which connects thousands of beneficiaries to resources and advice and which Legal Aid of North Carolina has run since 2021 for the state’s Department of Health and Human Services, will move to NCDHHS’ Division of Health Benefits on Jan. 1, department officials told Asheville Watchdog.
“Due to underfunding of the Medicaid Oversight Fund, cuts separate from the Medicaid rebase shortfall, the NC Medicaid Ombudsman contract with Legal Aid of North Carolina (LANC) will end on December 31, 2025, without renewal,” NCDHHS spokesperson James Werner said, adding that Medicaid Ombudsman staff at LANC were informed of the change Aug. 26.
Though NCDHHS said it is planning a transition to ensure essential services would continue with “minimal disruptions,” it could not say how many people would be working on the program in the future.
“At this time, specific details regarding the number of Division of Health Benefits employees’ working with the Medicaid Ombudsman program are not yet available, as program operations are currently under development,” said Summer Tonizzo, another NCDHHS spokesperson.
Jaclyn Kiger, executive director of Pisgah Legal Services, which has been a subcontractor for the Medicaid Ombudsman program, said she worries the change will mean cuts to the program’s badly needed services.
“I worry about all the people who are on Medicaid and will need this assistance in a time when it feels like, again, Medicaid is being gutted in many different ways,” Kiger said. “That’s when people need a program like this, and they need Pisgah more than ever. And us being a part of this was also making sure that people were connected to Pisgah when appropriate, too.”
In addition to the loss of Medicaid Ombusdan workers, which was first reported in the Asheville Citizen Times, Pisgah Legal Services will also lay off three employees who helped provide services related to the Healthy Opportunities Pilot, which will be disbanded, Kiger said. That Medicaid program provided non-medical aid such as food and transportation to beneficiaries and was found to be effective in a preliminary U.S. Centers for Medicaid and Medicare Services assessment. But a spending plan proposed by the North Carolina House of Representatives in May did not include sufficient funding for the program to continue.
All told, the cuts represent about a 10 percent staff decrease for the staff of roughly 130 at Pisgah Legal, Kiger said.
LANC Executive Director Ashley Campbell said employees working on the program would lose their jobs on Dec. 31. The lion’s share of the losses will be at Raleigh-based LANC, and in addition to Pisgah’s losses, the Charlotte Center for Legal Advocacy will lose nine positions.
Since its inception in 2021, the Medicaid Ombudsman program, which helps people get access to Medicaid and connect to resources such as legal aid, social services, housing, food assistance and other programs, has opened 68,825 cases and has had 194,307 interactions with beneficiaries, said Tonizzo.
In 2024 alone, the Ombudsman-affiliated team at Pisgah Legal Services served 4,370 residents, Kiger said. That team focused on local outreach, but took calls from beneficiaries across the state.
“I can’t comment on what the state plans to do, which is move it internally, but I can tell you that this was an excellent team that did life changing and life-saving work here in our region,” Kiger said.
Charlotte Center for Legal Advocacy Chief Operating Officer Cassidy Estes-Rogers said it was frustrating to see an effective system lose funding.
“I think the frustration here is that when we know we have a system that’s working for North Carolinians, that we don’t fund it in a way that it needs to be funded,” Estes-Rogers said.
‘A serious setback’
In August, North Carolina lawmakers passed a stopgap spending plan also known as a “mini budget” that was signed into law by Gov. Josh Stein that day. That plan included $600 million for the Medicaid rebase — the amount required to maintain current service levels for beneficiaries — and the Medicaid Managed Care Oversight Fund.
NCDHHS asked lawmakers for $115 million for the Oversight Fund but received only $82 million, creating a $33 million shortfall.
“Despite careful efforts by NCDHHS to avoid disruptions to service, fully funding the rebase is necessary to maintain the current level of care across the state,” NCDHHS stated in an Aug. 6 news release about the underfunding. “To remain within budget, NCDHHS now has two options to address a shortfall from an insufficient rebase; reduce optional services and/or reduce provider rates.”
In the release, NCDHHS Secretary Dev Sangvai said underfunding NC Medicaid was “a serious setback,” and potentially a “fundamental erosion” of the state’s newly expanded Medicaid program.
“The forced cuts from the budget shortfall threaten care for those who need it most and include some of North Carolina’s most vulnerable populations,” Sangvai said.
The agency informed LANC’s Campbell of the change in an Aug. 26 letter obtained by The Watchdog.
“The Department greatly appreciates your partnership and willingness to support the beneficiaries of the NC Medicaid Program,” the letter said. “This Program is crucial for providing beneficiaries with the necessary assistance and education; therefore, operations will be transferred to the Division of Health Benefits. We regret any inconvenience this may cause and are committed to ensuring a smooth transition.”
While there was no guarantee that the contract with LANC would be renewed, both Campbell and Kiger said the news was unexpected.
“I’m devastated and frustrated, to put it mildly,” Kiger said. “It is incredibly hard to lay off people at any point, as an executive director. To have to do so when my entire team has been dealing with and living through Helene and providing just a critical service is really, really difficult right now. I’m frustrated that Medicaid is not being funded adequately by state lawmakers, and that people here in western North Carolina and across the state are going to lose their jobs because of it.”
Asheville Watchdog welcomes thoughtful reader comments on this story, which has been republished on our Facebook page. Please submit your comments there.
Asheville Watchdog is a nonprofit news team producing stories that matter to Asheville and Buncombe County. Andrew R. Jones is a Watchdog investigative reporter. Email arjones@avlwatchdog.org. The Watchdog’s local reporting is made possible by donations from the community. To show your support for this vital public service go toavlwatchdog.org/support-our-publication/.
Republish our articles for free, online or in print, under a Creative Commons license.
Too bad, so sad.
Get a job.