Legislative Update

July 1, 2019

​NC Legislative Budget Update:

On Thursday, June 27 the North Carolina General Assembly passed their two-year budget. The vote included several Democrats joining the Republican majority in each chamber. (H966) NC Health News put together a great comparison document of the House passed budget vs. the Senate passed budget. The budget that was sent to the Governor on Thursday it is a negotiated compromise and includes some elements of each of the chambers budget priorities.

On Friday, June 28 Governor Roy Cooper vetoed the budget. In previous sessions, the Republican majority held a supermajority. This year they will need some Democrats to vote with them in order to override the Governor’s veto. What is the Governor’s top priority in the healthcare budget? Medicaid expansion. The budget did not include Medicaid expansion but the House Republican’s did file a bipartisan expansion bill that includes work requirements. House Bill H655: NC Healthcare for Working Families is currently in the House Health Committee and might be an option for a special session on Medicaid. The budget passed on Thursday does leave open the possibility for a legislative special session focused on Medicaid.

One big question being asked is why we can’t just talk about passing a Medicaid expansion bill now since we are in session. Senator Phil Berger answered this one during his press conference on Friday. Due to a highly technical issue, the Senate cannot in this session pass any Medicaid expansion legislation regardless of what it is called. Early in the Senate session and amendment was run on a bill to expand Medicaid. That amendment was ruled out of order and was "laid on the table". That effectively stopped any Medicaid expansion legislation from being able to move through the Senate without first undoing the "laid on the table" motion. A second avenue would be to have 2/3 of the Senate vote to bring the motion back to the full Senate.

Let’s take a look at some of the HHS items that are in H966 that was sent to the Governor.

Group Home Bridge Funding: This funding of $1.8 million for FY 2019-2020 continue to provide short term financial assistance in the form of monthly payments to people living in group homes who meet the existing criteria for these funds.

Innovation Waiver Slots: The budget funds 1000 new Innovation waiver slots. The first 500 slots will become available on January 1, 2020 and the second 500 will open up on January 1, 2021. There is also a new funding allocation system for some of those slots.

IDD Study: Special provision language in this budget address the need for a stakeholder group to design a 10 year plan to look at all aspects of services for people with IDD and their families including addressing the waitlist.

Wage Study for Direct Support Professional/Innovation Waiver: Budget provides $200,000 (non-recurring) to support an actuarial analysis of the State’s Innovation Waiver Program to determine how to align wages paid to community based personnel with the wages paid to State employees. The Division of Health Benefits must report by March 1, 2020 the plan and recommendation to the Joint
Legislative Oversight Committee on Medicaid.

ICF/IDD Group Home Rate Increases: The provides $5,495,000 recurring funding for FY 2019-2020 and $10,995,000 for FY 2020-2021 to adjust the per member per month capitation rate to the LME/MCOs to provide an increase in wages paid to direct support personnel working in community-based ICF/IDD group homes.

Single Stream Funding Reduction: Once again this budget cuts single stream dollars. This time the cut is $43.4 million. The budget requires the LME/MCOs to continue service spending at 90% of the 2014-2015 budget level.

Medicaid Reduction:DHHS: This is an interesting budget item. The first part is a reduction of $30.6 million in FY 2019-2020 and $42.6 million in FY 2020-2021. Then the second part is a Transformation Administrative Bridge Funding: this is an increase of $30.6 million for FY 2019-2020 and $21.3 million for FY 2020-2021. These budget items point to the changes moving from a fee for service system to a capitated managed care system. You can read more here at NC Health News on the changes with this funding.

Medicaid Transformation: Funds Medicaid transformation with $242 million for FY 2019-2020 and $56 million for FY 2020-2021. This includes funding to address NC Fast preparedness and upgrades.

Moving DHHS to Granville County: $250 million to build a DHHS campus in Granville County.

What can we expect next:

1. Due to a special provision in the 2016 budget, we will not see a full closure or even partial closure of state government in NC. We will not even need to pass a continuing resolution. The 2016 budget had a special provision that allows the current fiscal year budget (FY2018-2019) to roll into the next fiscal year (FY2019-2020) as long as we meet the Constitutional requirement that our budget is balanced. It is. However, only recurring funding will move forward. No one time money will move forward so that may impact some programs but for the most part Medicaid, state dollar recurring funding and block grants will continue forward.

2. What happens if we finally get a budget? Well if a new budget appears then that budget will effectively be retroactive to July 1, 2019. 

3. What about Medicaid expansion? S212 holds that answer. On Thursday, S212 was amended to include language that states if we do not have a budget by July 15, 2019 the Department of Health and Human Services can move the timeline for Medicaid transformation back to at least March 1, 2020. So it basically provides some flexibility so DHHS can manage a possibly prolonged budget debate while not running into any issues with our Managed Care statute that had a rather specific timeline for implementation.

4. What to expect next? The House will be on vacation until July 8th. The Senate will be in session until the 3rd of July and then will be on vacation until July 8th.

Health News Roundup:

NC Health News: “NC Health Department would face ‘dramatic’ cuts under proposed budget”

NC Health News: “New General Assembly budget includes many health care features, but no Medicaid expansion”


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Boone, NC 28607

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