By Jennifer Fernandez
Key Takeaways:
- The Perinatal Quality Collaborative of North Carolina lost its funding in October 2025 in a budget dispute between the legislature and the governor.
- The program provides a high return on investment and has saved the state about $98 million since 2009.
- New projects, launching in 2027, will focus on improving the efficiency and accuracy of newborn screening and mental health referrals for postpartum moms.
Dozens of hospitals statewide will be able to take part next year in research to improve maternal and newborn care as part of the revived Perinatal Quality Collaborative of North Carolina.
The collaborative originally planned to launch the projects this year. But the group lost funding in October 2025 after getting caught in a budget dispute between the Republican-led General Assembly and Democratic Gov. Josh Stein over Medicaid funding, which has paid for the perinatal collaborative’s work in recent years.
The cuts essentially terminated the long-standing program, which shut down bit by bit, using leftover funds to complete the existing projects, according to Martin McCaffrey, a pediatrician and neonatologist who directs the collaborative.
Then in June, the North Carolina Department of Health and Human Services restored the program’s funding, retroactive to April. NC Medicaid will provide $901,400 annually to the collaborative under a two-year contract, an NC DHHS spokesman confirmed in an email to NC Health News.
The news came after months of lobbying from supporters statewide, from infant and maternal health advocates, to legislators in the General Assembly, to the Child Fatality Task Force, which encouraged lawmakers to fund the collaborative and included a recommendation for funding in the task force’s 2026 action agenda.
“There were so many people who just jumped in and clamored to get our funding back,” said McCaffrey, who is also a member of the task force.
He said state DHHS Secretary Devdutta “Dev” Sangvai reached out to him.
“‘I think you know you got caught up in a budget battle,’” McCaffrey said Sangvai told him. “‘But we really need this group, and so we’d like to get you back on track, and it’s important that you guys continue your work.’”
Budget battle
During last year’s legislative session, lawmakers and the governor clashed over what the state pays for Medicaid, including the Medicaid Managed Care Oversight Fund.
Legislators passed a “mini-budget” in June 2025 that had less money than NC DHHS requested. That led the department to cut Medicaid reimbursement rates for health care providers last fall, while also slashing programs such as the Healthy Opportunities Pilot and the Perinatal Quality Collaborative.
In an October 2025 email to NC Health News, an NC DHHS spokeswoman attributed the perinatal group’s funding cut to “the $33M underfunding of the Medicaid Oversight Fund by the NC General Assembly.”
State Rep. Grant Campbell (R-Kannapolis) said Wednesday the program should not have become embroiled in the fight over funding the Medicaid rebase — the amount of money needed each year to reflect changes in enrollment, care costs and the rates paid to providers.
“We don’t need to play political games with programs that are working,” he said, referring to the perinatal collaborative.
“This is not a partisan issue,” Campbell said. “This is a data- and outcome-driven effort that has proven success and is filled with people of all political persuasions that have a common interest in improving the maternal and infant space.”
Campbell, a longtime OB-GYN, is a big supporter of the program. He said he participated in the collaborative’s meetings and initiatives as a physician, long before he became an elected official.
“I was grateful to HHS and the governor that they reversed those [Medicaid] reimbursement cuts and restored funding,” he said.
The Medicaid reimbursement rates were returned to their previous level in December 2025, two months after the cuts began. In the end, state lawmakers never passed a comprehensive state budget for the 2025-26 fiscal year, which left other programs in the lurch too.
(The Healthy Opportunities Pilot also was included in the comprehensive budget passed this July, although at a reduced level and with nonrecurring funds.)
The perinatal group started getting funds in June, McCaffrey said.
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Closing out projects
The work of the Perinatal Quality Collaborative, a network of teams across the state, has been shown to improve maternal and infant care and prevent infant deaths through several initiatives since 2009, McCaffrey has said.
When the collaborative’s funding was cut last year, McCaffrey wrote a memo outlining the group’s work over the years. He included estimates on how much the General Assembly had spent — $10.6 million — and how much the group’s work saved the state — $98 million — that would have been spent on treatment and longer hospital stays, for example. Based on that cost avoidance, the return on investment for North Carolina is about 925 percent, he said.
Every year the collaborative supports maternal and newborn initiatives in as many as 60 of the state’s more than 115 hospitals.
After the funding cut, the collaborative was able to continue its work thanks to some remaining funds from prior projects, McCaffrey said. That allowed them to finish a project on maternal cardiac care. Participating hospitals completed a cardiac risk assessment on all obstetric patients and ordered a cardiology consult for all obstetric patients at high risk for cardiac morbidities, which globally account for as much as a third of maternal mortality during the perinatal period.
According to a 2019 study, cardiovascular disease is the leading cause of death in pregnant and postpartum women. Cardiovascular disease accounts for more than a quarter of pregnancy-related deaths in the U.S.
In 2025, the American College of Cardiology found that the rate of maternal mortality related to cardiac issues had more than doubled between 1999 and 2022, and that Black women and women from the South were at higher risk.
The collaborative also finished a two-year project on the care of late preterm infants, or babies born between 34 and 36 weeks.
In North Carolina, about 8,000 late preterm babies are born annually, according to the collaborative and the care they receive varies among hospitals and providers.
The initiative aimed to provide a standardized approach to key issues that arise in late preterm babies. While these infants are close to term, they are still considered preterm and often face issues related to feeding, as well as low blood sugar or high levels of bilirubin, a byproduct from red blood cells breaking down that can cause jaundice, turning the eyes and skin yellow. In premature babies, bilirubin levels can rise quickly and become toxic.
Moving forward
In early September, the perinatal group hired a clinical initiative manager for maternal projects. The group has also rehired someone who was let go during the funding pause.
The collaborative has resumed working on two initiatives that, before the funding cuts, were planned to begin earlier this year. They now plan to roll out the projects in early 2027, McCaffrey said.
“We had expert teams that were working on putting those projects together and finalizing them, and that stopped dead in its tracks,” McCaffrey said. “Where we’re at right now is rebuilding those expert teams, bringing those people back to look at the work that was done [and] see how they want to reconfigure that work.”
One project focuses on newborn screening. Babies are tested for 40 illnesses at birth with a blood sample sent to a lab.
McCaffrey said there are lots of places for variation in the process and potential inefficiencies.
“This project is really designed to look at how we get [the lab] specimens effectively and how we receive the results from the newborn screening lab to make sure that every kid who gets a newborn screen done gets it done properly and the results reported the way they should be,” he said.
The second project will look at how birthing facilities screen for maternal mental health. More than one in 10 North Carolina moms experience depression symptoms after giving birth, according to federal data compiled by the March of Dimes.
“Anxiety, depression, other mental health issues are huge with moms now,” McCaffrey said. “And what we’re going to be looking at is proper screening of moms for mental health disorders and proper referrals of moms for mental health disorders.”
There will also be a focus on the neonatal intensive care unit to make sure there are no missed opportunities to intervene for mental health issues.
“The NICU is such a traumatic place that it will invariably bring out mental health concerns that people might have,” McCaffrey said. “The stressors and everything else … are just titanic.”
For this project, the collaborative has partnered with March of Dimes and NC Matters, a project housed at the UNC School of Medicine that provides free consultation for providers working with pregnant and postpartum patients facing mental health issues.
The collaborative is also adding “mini projects” next year. These will last three months and allow partners to look back at the status and impact of previous initiatives. Partners can pick one or both projects. For newborns, partners can study neonatal opioid withdrawal syndrome/ abstinence syndrome or antibiotic use in infants. For maternal health, they can study hypertension or preeclampsia.
Despite the delay on new projects, McCaffrey said the majority of partners are still taking part. He said the group is taking the time before the next projects launch to rebuild the organization, retool it and get it back on track.
“The coalition that we had built,” he said, “is really amazingly loyal.”
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