PO Box 1658

Boone, NC 28607


Legislative Session 2017: 

Weekly Update: The News Edition

October 20, 2017

North Carolina:

Regular Session Update:

The NC General Assembly continued the 2017 legislative long session work this week. On Monday the House and Senate took up a veto override of S656 Electoral Freedom Act of 2017.

After completing work on the override, the General Assembly adjourned until January 20, 2018.


Joint Legislative Oversight Committee Health and Human Services:

The first Joint Legislative Oversight Committee on HHS met this month to review budget provisions and to receive departmental updates on key legislative agenda items including child welfare updates, NC FAST implementation of Child Welfare Case Management system, planning for the implementation of Rylan’s Law/Family Child Protection and Accountability Act, pre-K update on slots and a comprehensive overview of the interim investigative report of Cardinal Innovations Healthcare Solutions. (handouts from committee meeting).


During this meeting, three new subcommittees were announced and members were appointed to serve on the committees. These subcommittees are focused on the following policy areas:

Medical Education and Residency Programs
Behavioral Health


The HHS budget was also reviewed for committee members. The current FY 2017-2018 HHS budget includes a net appropriation of $5.3 billion, which is $20.6 million, 0.4% less than the base budget for FY 2016-2017. There is a 2.2% increase in the FY 2018-2019 budget with a net appropriation of $5.4 billion ($116.4 million above the FY2017-2018 budget).


The Interim Investigative Report of Cardinal Innovations Healthcare Solutions was a significant focus of this meeting. The report was presented by Dave Richard, Deputy Secretary for Medical Assistance, DHHS. This internal audit by DHHS is a follow up to a previous audit completed by the NC State Auditor earlier this year. The previous audit found the following:


Cardinal spent money exploring strategic opportunities outside of its core mission
$1.2 million in CEO salaries paid without proper authorization
Cardinal’s unreasonable spending could erode public trust


The Interim Investigative Report focused primarily on the salary of Cardinals CEO and a significant severance package for six additional executives and four key employees. The employment contract provides severance payments for a significant range of reasons. In comparison, three other LME/MCOs which have severance arrangement limit the agreement to “termination of employment without just cause”. In addition to the Cardinal CEO severance package, these same broad conditions extend to other key employees and executive team members. The current salary for Cardinal’s CEO is three times higher than the comparable salaries of other LME/MCO executives.



Joint Legislative Oversight Committee Medicaid and Health Choice

The Joint Legislative Oversight Committee on Medicaid and Health Choice also had its first meeting this month. On the agenda were the following items: comments from Secretary Cohen on Medicaid Transformation, Medicaid Enrollment and Finance update on the budget, and update on the Transformation timeline and process at DMA/DHB.


Medicaid enrollment in NC year-over-year is 4% higher than forecast. The prediction presented is that the trend up is slowly declining and then through the Fall we should see a dip in enrollment. DMA also announced that is now has a new enrollment dashboard on its website that you can use to track county enrollment and program aid category.


Even with an uptick in enrollment the Medicaid SFY18 through August 2017 is at $42.5 million or 1.9% favorable to the state’s authorized budget. The Medicaid rebase continues to perform well and is becoming more predictable.


Secretary Cohen opened the meeting with an overview of the steps DHHS continues to take on Medicaid transformation as well as highlighting the need to encourage the Congressional NC delegation to push for a quick reauthorization of CHIP funding.


CHIP funding: The CHIP program in NC covers children in families with an income up to 211% of FPL. ($52,000 for family of 4). Currently our program covers more than 200,000 children. Secretary Cohen stated that NC can continue to cover these children through February but cautioned that a federal claw back of funds for this program could destabilize the funding.


Medicaid Transformation:

Secretary Cohen opened her remarks to the committee by reviewing the timeline that will move NC into a managed care state. Cohen stressed the aggressive timeline that has been presented to CMS. North Carolina did meet with CMS in September for the “kickoff” meeting. NC managed care waiver has not yet been approved.  The timeline set forward in the white paper and by DHHS would run as follows:

Fall 2017 Request for Information

Fall 2017 Waiver Amendment Submission

Spring 2018 Waiver Amendment Approval

Spring 2018 RFP release

Fall 2018 Contract Awardees Selected

July 2019 Phase 1 Go Live


In a joint presentation by Secretary Cohen, Dave Richard and Jay Ludlam some key themes for the transformation into managed care were discussed. Much of the key theme reflect the white paper and also provider/stakeholder input from previous meetings across the state.


Key Themes:

Focus on health of the whole person
Improve health and well-being of NC
Support providers in delivering high-quality care at a good value


The presentation included the need for statewide quality strategy, value-based payment, care management, education/training and retention of workforce, reduction in administrative burden, transparent/fair payments to providers and telehealth.


Tailored plans, as presented by Secretary Cohen, would support services for the BH and I/DD population. This would be a specialized manage care plan and would include physical healthcare. There will be a delayed start to these plans, the white paper shows a two year after managed care “go live” timeline. Secretary Cohen stated to the members of the committee that all states struggle with the I/DD population and that more discussion with stakeholders needs occur in order to develop these plans. Some of the key questions are how to manage wrap around services, should the plans be regional or statewide, governance of the plans and the benefit array.


North Carolina News of Interest:

NC Health News-Lawmakers Rail on Spending Excesses Mental Health Agency


Cardinal Board Slashes CEO Salary: Winston Salem Journal


.National Update:

Through an executive order, President Trump ended the CSR payments to health insurance companies for ACA (“Obamacare”) plans. These cost sharing reduction payments provided to marketplace insurance companies to lower deductibles. Then ending of these payments is causing concern in the ACA marketplace. Many health insurers are discussing significant jumps in insurance premiums unless Congress can move to reinstate these CSR payments.




US Senate passes budget which includes a $1 trillion reduction in Medicaid. This budget is the legislative mechanism to extend reconciliation which is important to passage of the President’s agenda on tax reform.


Iowa Lawsuit Managed Care I/DD


Kaiser Family: Medicaid Spending Growth


NY Times: Bipartisan Deal on “Obamacare”


Alexander/Murray Bill: CBO Report Released on 10/25/2017




NC General Assembly; Who Represents Me?

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Check out Conference Information HERE