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Alliance Health outlines plan to use $5 million in unspent Durham County dollars after Medicaid expansion cut local spending
Summary
Alliance Health officials told the Durham County Board of Commissioners that Medicaid expansion and workforce shortages left roughly $5 million of county-contracted behavioral-health funds unspent this year and proposed rate increases, expanded supportive housing and other uses to deploy the remaining dollars.
Alliance Health executives told the Durham County Board of Commissioners on Aug. 5 that Medicaid expansion and provider workforce challenges were the main reasons the organization did not fully spend roughly $5 million in county-contracted funds for fiscal year 2024–25. Rob Robinson, Alliance Health's chief executive officer, said the region's move to a statewide tailored Medicaid plan on July 1 and an influx of state dollars meant Alliance used the available state funds before county funds, reducing the county-funded spend this year.
"Medicaid expansion is a very good thing for the state," Robinson said, but it "did decrease our spend on the state and county funded side," leaving local contract dollars unspent even though services continued. Kelly Goodfellow, Alliance's chief financial officer, presented the agency's FY25 operating budget of about $2.193 billion and noted Medicaid accounts for roughly 78% of that total; she confirmed the $5.7 million figure as the projected local underspend tied to the Durham funding agreement.
The Alliance team outlined steps they will take to deploy remaining local funds and stabilize the provider network. Those measures include matching state/Medicaid reimbursement rates for services paid from state and county funds, raising several state-funded service rates by 5–25%, expanding assertive community treatment slots and supportive housing options, and increasing allowable outpatient visits under state-funded benefit packages to approximate Medicaid-level access.
"We've made the decision to increase the rate on the state and county side to match that with Medicaid," Robinson said, adding Alliance will also evaluate the state benefit plan and expand medications and supportive services for uninsured residents, including opioid treatment. Sean Shriver, chief operating officer, described operational expansions in Durham — including additional opioid treatment coverage, a new crisis home opening the week of the meeting and specialized teams to link justice-involved individuals to continuing care.
Commissioners pressed for follow-up detail about exactly how many Durham residents receive each program, how leftover funds could be reallocated more quickly, and whether the county can expect similar underspends going forward. Commissioner Jacobs asked Alliance to prepare a proposal for use of the one-time unspent county dollars; Robinson said Alliance would draft and submit a recommendation within three weeks for the board to review and vote on. Robinson also said that by statute and under the existing contract, unspent county dollars revert to Durham County if not committed by agreement.
The board did not take a formal vote on funding reallocations at the session but directed staff and Alliance to continue the discussion and return with a concrete proposal for rapid board consideration.
