How North Carolina Medicaid Pays for Adult Day Health: The CAP/DA Waiver, a $43.06 Per Diem That Went on a Round Trip, and Tougher Provider Screening

North Carolina certifies 93 adult day care and adult day health programs with 5,850 slots between them, and for the Medicaid participants they serve there is one benefit that pays: Adult Day Health under the Community Alternatives Program for Disabled Adults, the CAP/DA waiver. It is fee-for-service, it sits outside managed care by statute, and its per diem has had a strange year — cut three percent on October 1, 2025, restored by court order ten weeks later, and then passed over by the personal-care raise that took effect this August. If you run a certified center in North Carolina, here is what the benefit is, how a participant reaches you, and what the state expects to find in your files.

ElderSuite serves adult day care centers nationwide. This piece is North Carolina-specific — the CAP/DA benefit for adults 18 and older who need nursing-facility-level care, not the Innovations Waiver's day supports.

One waiver, one service

The CAP/DA waiver, renewed effective November 1, 2024 through October 31, 2029, lists a single day service: Adult Day Health, defined as a service "to attend a certified Adult Day Health Care Facility" for people "who do not have other appropriate day supports and/or who need a structured day program of activities and services with nursing or other supervision." It must be "organized and provided for a minimum of four hours per day on a regularly scheduled basis for one or more days per week." Two things are explicitly not part of it: transportation, which runs through non-emergency medical transportation instead, and physical, occupational, and speech therapy. Meals are included but do not constitute a full nutritional regimen.

There is no social "adult day care" service in the waiver. North Carolina's social-model programs are funded through the Home and Community Care Block Grant and a state adult day care fund, not Medicaid. And under Clinical Coverage Policy 3K-2, amended September 1, 2025, only a center certified by the Division of Aging under G.S. 131D-6 and 10A NCAC 06R and 06S, and compliant with the federal home- and community-based settings rule, can bill for it. The policy notes that an adult day health center may also furnish institutional respite under the waiver if it enrolls that service separately.

Outside managed care, and capped by slots

North Carolina moved most of Medicaid into Standard Plans and Tailored Plans, but the General Assembly wrote CAP/DA out: G.S. 108D-40 excludes "recipients being served through the Community Alternatives Program for Disabled Adults" from capitated health-plan contracts, and the version of the statute that takes effect October 1, 2026 keeps that exclusion. CAP/DA participants stay in NC Medicaid Direct, so a center bills the state, not a plan. The Department's 2024 report to the legislature put 79 percent of CAP/DA participants in the dually eligible group.

The program is slot-limited. The waiver can serve 11,648 participants at any point in time, allotted by county, with 434 slots reserved for people with Alzheimer's disease or related disorders, and a statewide waitlist has been in effect since February 16, 2024. In April 2024 the Department reported 11,172 people enrolled and 755 waiting. Adult day health is a small part of that program: the waiver's own projections assume a few hundred adult day health users a year.

The per diem's round trip

Adult day health is billed per diem under S5102, and the CAP/DA fee schedule has paid $43.06 a day since July 1, 2023. Here is what happened to it over the last year.

On October 1, 2025, NC Medicaid cut rates across the program to stay inside its legislative appropriation. The reduction table split CAP/DA in two: personal-care-like codes such as in-home aide took eight percent, and "Non-Personal Care Services (PCS) codes" took three. Adult day health was in the second group, and the fee schedule posted that day showed S5102 at $41.77.

On December 10, 2025, the Department announced that "recent court rulings now require the North Carolina Department of Health and Human Services to reverse provider rate reductions and restore rates to their Sept. 30, 2025, levels," while noting that Medicaid was "currently underfunded by $319 million." Restored fee schedules were posted by January 5, 2026, and claims with dates of service on or after October 1 were reprocessed beginning with the January 13 check write. The General Assembly then backfilled the shortfall in Session Law 2026-1, appropriating $319 million from the Medicaid Contingency Reserve retroactive to July 1, 2025.

The 2026 budget went a step further for some CAP/DA services and not for yours. Session Law 2026-41 directed $70.8 million a year to "a rate increase for personal care services" in Medicaid Direct, CAP/C, CAP/DA, and CAP/Choice, and NC Medicaid applied it as an 18 percent increase to personal-care procedure codes effective August 1, 2026 — CAP in-home aide, for example, went from $5.96 to $7.03 per 15 minutes. S5102 was not on the list. Adult day health is back at $43.06, exactly where it stood in July 2023.

How a participant reaches your center

Every CAP/DA participant has a case management entity, and the CME controls the door. Under 3K-2, once a service plan is approved the CME issues a service authorization to the provider the participant chose, follows up within 72 hours, and expects the provider to accept or reject the authorization within three business days and start care-plan development within five. On acceptance, the CAP business system, e-CAP, issues the prior-approval record to the claims system automatically; the authorization runs thirteen months from the effective date of the initial plan. The state's willing-and-qualified-provider standards add the rest of the job description for an adult day health provider: a restraint- and seclusion-free policy, participation in quarterly multidisciplinary team meetings, critical-incident reporting, and a response to any participant complaint within five business days.

Eligibility itself is the CME's work, not yours: Medicaid Direct enrollment, nursing-facility level of care under the policy's condition categories, age 18 or older, and an assigned slot, reassessed every twelve months.

Certification, not licensure

North Carolina does not license adult day programs; it certifies them. G.S. 131D-6 requires the Department to "annually inspect and certify all adult day care programs" serving more than three people, and 10A NCAC 06R makes the county department of social services the supervising agency that inspects, announced and unannounced, and recommends certification to the Division of Aging. A certificate runs twelve months; the renewal package goes in through the county no more than 90 days before it expires. For Medicaid, 06S is the gate: "In order for payment to be made for adult day health services provided to individuals who are eligible for this service under Title XIX of the Social Security Act, the provider must be certified as meeting these standards."

The standards that shape staffing: one full-time-equivalent direct-care staff member for every five participants in an adult day health program, or every six in a combined day care and day health program (day care centers alone run 1:8); a health care coordinator who is a registered nurse or a licensed practical nurse, on site at least four hours a day, with an LPN supervised on site by an RN at least every two weeks; a program open at least six hours a day, five days a week; 40 square feet of indoor program space per participant; a medical examination within three months before enrollment and annually after; and a comprehensive assessment and written service plan within 30 days of enrollment, with the health component written and signed by an RN and the whole plan reviewed at least every six months. Both rule subchapters were readopted in 2019 and are up for readoption again under the state's periodic-review cycle.

One 2026 change worth knowing if you hold an overnight respite license: Session Law 2026-1 raised the bed cap for licensed overnight respite in adult day care and adult day health facilities from six to twelve, effective July 1, 2026, with one awake, medication-qualified staff member for a census of one to six and two for seven to twelve.

Billing: fee-for-service, with a new screening tier

The claim goes to the state. The policy's billing attachment says to "bill the days that the CAP/DA beneficiary received Adult Day Health services at the Adult Day Health Care Facility," and, if the participant attended only part of a day and the center has a partial-day rate, to bill that rate. Claims must be received within 365 days of the first date of service, and prior approval is already on file from the e-CAP authorization.

Enrollment got harder in October 2025. Effective October 6, NC Medicaid moved the adult day care taxonomy, 261QA0600X, to the high-risk screening tier that federal rules apply to newly enrolling home- and community-based agencies: a federal site visit and fingerprinting are now required, and the credential the state checks is your Division of Aging certificate rather than national accreditation, which is no longer required. Existing providers may be asked to complete the additional screening at revalidation.

Electronic claims go out as 837P files, and North Carolina Medicaid (payer ID SKNC0) is an available payer on the Availity clearinghouse — the same clearinghouse ElderSuite submits claims through. That means a North Carolina center can run the whole pipeline in one system: daily attendance becomes service documentation, documentation becomes claims, and claims go out electronically. Availity requires a one-time payer enrollment before the first claim goes out. For the full workflow from attendance record to electronic claim, see ElderSuite's Medicaid billing guide.

One thing you do not need: electronic visit verification. In CAP/DA it applies to in-home aide and other personal-care-type services delivered in the home. Center-based adult day health is not on the list.

The records behind every billed day

Two rulebooks apply. Under 06R, each participant's folder must hold a signed application stating the time of day the participant will arrive and leave, the medical examination report, progress notes, and twelve months of service plans "including scheduled days of attendance"; and the program must keep, for at least six years, "a daily record of attendance of participants by name" along with accident reports, drill records, and personnel files. Under 3K-2, every CAP waiver service needs a service note completed within 72 hours, signed and dated by the person who delivered it, recording the purpose, the participant's name, the date and duration, the service-plan goals, progress toward them, and a recommendation to continue, revise, or end the service; a late entry is allowed only within 365 days and only with other supporting documentation. The policy adds that NC Medicaid "shall randomly select a representative sample of CAP/DA providers" for review, with recoupment for services not on the plan.

Since the unit is a day, the attendance record is the claim's foundation: scheduled days on the plan, arrival and departure times against the four-hour minimum, and a signed note for each one. Your attendance tracking is the first thing a reviewer will open.

Where to check

• Clinical Coverage Policy 3K-2 and NC Medicaid's CAP/DA program page
• The approved CAP/DA waiver and the CAP fee schedule archive
• 10A NCAC 06R and 06S, and the Division of Aging's adult day services page with the current certified-program list
• NC Medicaid bulletins on the October 2025 reductions, the December 2025 reversal, and the August 2026 personal-care increase