Week of March 7 Budget Update

HHS Appropriations
Medicaid and Piedmont Behavioral Health
On Tuesday, Craigan Gray and Steve Owen finished up a presentation on Medicaid and Pam Shipman from PBH presented.  The Medicaid handout is online here.  The PBH presentation is online here.  The PBH presentation was not much different from other presentations they have done.  Some points that were made that I would like to note:

• The slide that states that the PBH model has management of all public resources, including Medicaid funds, state/federal funding and state institution funds, is misleading.  PBH only covers behavioral health.  Other Medicaid services (primary care, etc.) are covered under the Southern Piedmont Community Care Plan (the local CCNC affiliate).
• State funds account for 20% of the PBH budget.
• Although the slides related to comparative costs for certain types of services are not clear as to scale, they demonstrate no significant cost differential for ICF-MR, 1915(c) services (Innovations and CAP-MR/DD), and possibly outpatient and inpatient psychiatric care (without further explanation of their numbers it is impossible to know if the difference is statistically significant).

Division of Mental Health and the Division of State Operated Healthcare Facilities
On Wednesday, legislative staff  (NOT DHHS staff as was done for Medicaid) presented reduction options related to the Division of Mental Health and the Division of State Operated Healthcare Facilities.  Of particular note:

• It was stated that the cost of ICF-MRs is mostly medicaid, with only a small amount in the DMH and DMA budgets for state dollars, so there wouldn't be much savings to close the DD Centers.
• Total funds spent through the LMEs - $533 mil (state and federal) - $350 mil to community services ($350 mil) and $115 mil in administrative funding (22% of the money allocated to LMEs, $65 mil state and $50 mil federal).  Staff discussed the high percentage of administrative costs (according to the Mercer report the national average is 10-15%) and laid out options to consolidate and reduce the number of LMEs.  For community services funds, staff suggested standardizing the service package of benefits among LMEs, creating a standard benefits package among LMEs, and instituting a co-payment as reduction options.  There were alse questions about the LME fund balances.
• Staff put forth closing the Wrights School as an option.
• ADATCs – there is not really an option for this, but could see if there is a private market.
• Advocacy staff - $3.5 mil in salaries/fringe (both state and federal cost) – 40 positions to serve 15 facilities, 23 throughout communities.  In his response, Secretary Cansler pointed out that the advocacy staff is crucial to the facilities, and the amount saved in state dollars would be minimal.
• CRH Hospital Administrator Contract – could save $30K by hiring as an employee.  Cansler also responded to this point in his response.

Education Appropriation
K-12 Education Reduction Options - handout here.  Some options discussed include:

• Eliminating $9 mil in support for Child and Family Support Teams
• Children with Disabilities Reductions: 2 reductions are discussed: 1)  3.4, 4.2 and 5% reductions to the state allocation for children with disabilities ($23,964,707, $29,042,061, and $34,694707 reductions to $693,894,148).  Staff is further investigating this option regarding federal Maintenance of Effort requirements for IDEA funding.  These options were not in the Governor's budget.  2) The Governor's budget included a $7 mil reduction in anticipation of a reduced headcount.
• Reduce funding for the Residential Schools for the Deaf and Blind by 5 and 10% ($1.6 mil and $3.3 mil out of $32.6 mil budget).
• There are also proposals to reduce funding for teacher assistants, local school district central office administration, principal and assistant principals, instructional support (guidance counselors, social workers, etc.), eliminate funding for staff development, retirement incentives for LEAs and to eliminate the More at Four/DPI Office of School Readiness.