Bill Update for the Weeks of June 10 and June 17

See below for some brief updates on bills related to people with disabilities. Committees are still meeting so we expect to continue at a fast and furious pace on policy legislation until budget and tax reform issues are resolved.  WRAL just did a great piece on the status of some pieces of big legislation that remain outstanding, including Voter ID.

HB 29, Methemphetamine/Offense/Penalties (Horn, Faircloth, Tolson, Stevens). HB 29 provides enhanced penalties for the offense of manufacturing methamphetamine when a child, person with a disability or elder resides or was present at the property used for the manufacturing. HB 29 passed both chambers and was signed into law on June 19th, S.L. 2013-124.  It becomes effective December 1, 2013, and applies to offenses committed on or after that date.

HB 68 (Torbett), Establish Ombudsman/Foster Care/ Gaston County, seeks to establish a pilot ombudsman program for children in foster care in Gaston County. It was approved by the full Senate on June 12^th and signed into law by the Governor on June 13, S.L. 2013-111.  It was effective when signed and expires July 1, 2015.

 

HB 317, Improve Education for Children Who Are Deaf (Blackwell, Farmer-Butterfield, Holloway, Martin). HB 317 mandates assessment and consideration of language and communication needs of children who are deaf or hard of hearing; ensures that personnel who are highly qualified in the education of children who are deaf or hard of hearing are available to meet the unique needs of each child, including interactions in the child's language and communication modality to meet academic and social goals; and directs DPI to develop and implement strategies to ensure that parents of a child who is deaf or hard of hearing know they are entitled to request that the child's IEP team consider placement of their child in a residential setting and, if such a request is made, that a representative from one of the two North Carolina residential/day program schools for the deaf shall be a member of the IEP team. HB 317 was signed into law on June 19 and is Session Law 2013-119.  It became effective when signed into law.

 

HB 392, Share Arrest Warrant Status/Public Assistance (Arp, Horn, Starnes, Burr). HB 392 directs local DSS, on a voluntary basis, to verify through a criminal background check whether an applicant or recipient is (i) fleeing to avoid prosecution, custody, or confinement after a felony conviction, or (ii) violating a condition of probation or parole imposed under federal or State law. The background check may be done by utilizing all currently accessible databases to the extent permitted by allocated county and state resources, and the bill explicitly states that counties are not required to allocate funds for the program. The bill was approved by the Senate Judiciary I committee last week and has been referred to the Senate Health committee.

 

HB 533, Detention of Mentally Ill in Facility (Jordan). HB 533 applies to Ashe, Cumberland, and Wilkes Counties only. It amends NCGS 122C-251 regarding transportation for involuntary commitment proceedings to allow hospital police to keep patients at the hospital if law enforcement has left the facility.  Specifically, the bill states that if the law enforcement officer vacates the facility after finding, in collaboration with the facility, that the respondent is safe to be temporarily detained under the appropriate supervision provided by the facility, an employee commissioned under G.S. 74E-2(b) who is employed by a hospital certified under G.S. 74E-2(b) may use appropriate and reasonable force and means to (i) keep the respondent at the facility where the respondent is to be detained and (ii) if pursuant to a continuous and immediate pursuit, to return the respondent to the facility where the respondent is to be detained. This subsection applies when the respondent is being temporarily detained in accordance with G.S. 122C-261(d), 122C-263(a), and 122C-263(d)(2). HB 533 was signed by the Governor on June 18 and is Session Law 2013-114

 

HB 543, Guardianship Roles of MH/DD/SA Providers (Jones, Avila, Glazier, Turner). HB 543 passed the full Senate on June 17. The House sponsors did not agree with changes made to the bill in the Senate, and the bill has been sent to a conference committee to work out the differences.  House conferees are Jones, Avila, Turner and Glazier.  Senate conferees have not yet been appointed.

 

HB 587, Alternate ACT/Plan for Certain Students (Whitmire, Holloway, Blackwell, Glazier). HB 587 amends NCGS 115C-174.11(c)(4) regarding the administration of the ACT test for students to require the administration of an alternate to the ACT or an alternate to the PLAN precursor test to the ACT to a student who (i) exhibits severe and pervasive delays in all areas of conceptual, linguistic, and academic development and in adaptive behaviors, including communication, daily living skills, and self-care, (ii) is following the extended content standards of the Standard Course of Study as provided in G.S. 115C-81, or is following a course of study that, upon completing high school, may not lead to admission into a college-level course of study resulting in a college degree, and (iii) has a written parental request for an alternate assessment. The State Board of Education shall ensure that parents of students enrolled in all public schools, including charter and regional schools, have the necessary information to make informed decisions regarding participation in the ACT and the PLAN precursor test to the ACT. Additionally, alternate assessment and ACT assessment results of students with disabilities shall be included in school accountability reports, including charter and regional schools, provided by the State Board of Education. HB 587 has passed the Senate and was presented to the Governor last week.

HB 725, Young Offenders Rehabilitation Act (Avila, Moffitt, Mobley, Hall).  HB 725 seeks to raise the age of juvenile jurisdiction from 16 to 18-years-old for misdemeanors. The bill takes effect over the next four years: 16-year-olds charged with misdemeanors would be placed in the juvenile system in 2016 and 17-year-olds in 2017. The bill was approved by the Judiciary A committee and has been referred to the Appropriations committee.

 

HB 831, Educational Services for Children in PRTFs (Avila, Johnson, Glazier). HB 831 seeks to allocate funds to PRTFs for educational services. It was approved by the House Education committee last week and has been referred to the Appropriations committee.

 

SB 542, Drug Testing for LTC Applicants and Employees (Cook, Jackson, Rabin). SB 542 would require Adult Care Homes and nursing homes to require applicants for employment and certain employees to submit to drug testing for controlled substances. It was signed by the Governor on June 19^th and is Session Law 2013-167.

 

SB 663, Blue Ribbon Commission Recs/Supportive MH Housing (Hise). SB 663 would implement the recommendations of the Housing Subcommittee of the Blue Ribbon Commission on Transitions to Community Living to require DHHS to establish a Supportive Housing Program and to create a Transitions to Community Living Housing Budget within the Transitions to Community Living Fund to integrate individuals with Mental Illness into Community-Based Supported Housing. It was approved by the full House and awaits a hearing in the House Health committee.

 

Bill Update

Bill Updates

HB 317, Improve Education for Children Who Are Deaf (Blackwell, Farmer-Butterfield, Holloway, Martin).  HB 317 mandates assessment and consideration of language and communication needs of children who are deaf or hard of hearing; ensures that personnel who are highly qualified in the education of children who are deaf or hard of hearing are available to meet the unique needs of each child, including interactions in the child's language and communication modality to meet academic and social goals; and directs DPI to develop and implement strategies to ensure that parents of a child who is deaf or hard of hearing know they are entitled to request that the child's IEP team consider placement of their child in a residential setting and, if such a request is made, that a representative from one of the two North Carolina residential/day program schools for the deaf shall be a member of the IEP team.  HB 317 has passed both chambers and has been presented to the Governor.

HB 492, Safeguard Qualified Individuals/Medicaid PCS (Dollar). HB 492 allows for an additional 50 hours per month of Medicaid Personal Care Services (“PCS”) for recipients who meet the PCS eligibility criteria and additional criteria.  HB 492 was approved by the Senate Health Care committee last week. There were a few changes made to the bill (which was incorporated in large part into the Senate budget but not the House). The bill now states that rates will be reduced to allow for the additional hours within the current Medicaid budget.  It also directs the department to submit a State Plan Amendment by August 15, with an effective date of July 1. There was testimony at the committee that 86% of Medicaid recipients in Special Care Units receiving PCS need hands-on assistance with 5 ADLs.  We do not yet know the number for individuals receiving PCS in their homes. It is scheduled to be heard in the Senate Appropriations committee tomorrow.

HB 543, Guardianship Roles of MH/DD/SA Providers (Jones, Avila, Glazier, Turner). HB 543 was approved by the Senate Health Care committee this week.  It was further amended in the Health Care committee to make clear that a corporation shall not be appointed as guardian for any individual to whom it provides MH/DD/SA services for compensation as part of a contractual or other arrangement with a local management entity (LME), including an LME that has been approved to operate the 1915(b)/(c) Medicaid Waiver.  It also now allows for a licensed family foster care provider, or a licensed therapeutic foster care provider who is under contract with an LME for the delivery of MH/DD/SA services and is serving as a guardian as of January 1, 2013, to continue to serve as guardian.  It will next be considered in the Senate Judiciary I committee.

HB 585, PREA Compliance (Lewis). HB 585 directs all correctional facilities in the state prison system to comply with the provisions of the Federal Prison Rape Elimination Act. HB 585 was amended in the Senate Judiciary II committee to add back in a policy for local county facilities to comply.  It was set to be heard by the full Senate last week but was withdrawn from the calendar and referred to the Senate Appropriations committee.

HB 944, Opportunity Scholarship Act (Bryan, Brown, Brandon, Hanes). HB 944 would provide scholarship grants for students who qualify for the federal free or reduced price lunch program to attend private schools. The grants may be up to $4200 per student. It has been approved by the House Education committee and incorporated into the House budget, which allocates $10 mil in the first year for the program.

HB 980, Medicaid/2012-2013 Additional Appropriations (Burr).  HB 980 directs budget adjustments to cover a total $451 mil projected budget shortfall in Medicaid ($333 mil in Medicaid payments and $118 mil for the repayment of federal drug rebates). One of the adjustments under the bill allows any unspent or unobligated State appropriations from the Transitions to Community Living Fund to be used to cover the shortfall (all payments required to be made from the fund must be made first). It was signed by the Governor on May 30, and is S.L. 2013-56.

SB 208, Effective Operation of 1915(b)/(c) Waiver (Tucker, Barringer). SB 208 seeks to define LME/MCOs in state statute and enact parameters for a properly functioning LME/MCO.  If an LME/MCO cannot operate in accordance with the law, the HHS Secretary shall transfer the operation of that LME/MCO to another LME/MCO.  The bill passed the House this week, and the Senate concurred in the House Committee substitute.  The bill is off to the Governor to be signed into law.

SB 334, Dorothea Dix Lease (Hise, Pate, Tucker). As originally filed, SB 334 seeks to take by condemnation the leasehold interest in the Dix property that was conveyed to the City of Raleigh. The bill was rewritten in the House to give the state and Raleigh officials time to renegotiate the deal, giving officials until April 2014 to rewrite a deal over the 325-acre Dorothea Dix property and give the city a chance to add an adjacent piece of land to link two parks. It also states the intent of the General Assembly for the proceeds from any disposition of the property to be held in a special fund for mental health purposes consistent with the purposes in the underlying deeds transferring the Dorothea Dix Property to the State and in the laws of 1848-1849 that authorized acquisition of the Property.  The Senate did not concur in this House Committee substitute and the bill has been referred to conference.  The conferees are Reps. Burr, Stam, Daughtry, Brisson and Sens. Pate, Hise and Tucker.

SB 542, Drug Testing for LTC Applicants and Employees (Cook, Jackson, Rabin). SB 542 would require Adult Care Homes and nursing homes to require applicants for employment and certain employees to submit to drug testing for controlled substances. It was approved by the House Health and Human Services committee and full House this week. It was amended on the House floor to allow a single-use test device to be used and administered on-site. It has been placed on the Senate calendar for concurrence.

SB 663, Blue Ribbon Commission Recs/Supportive MH Housing (Hise). SB 663 would implement the recommendations of the Housing Subcommittee of the Blue Ribbon Commission on Transitions to Community Living to require DHHS to establish a Supportive Housing Program and an Assistive Technology Reutilization Program and to create a Transitions to Community Living Housing Budget within the Transitions to Community Living Fund to integrate individuals with Mental Illness into Community-Based Supported Housing. A Proposed Committee Substitute was approved by the Senate Health committee last week. The policy outlined in the bill is not included in the Senate budget, so it will need to pass both chambers to become law. The bill is scheduled to be heard in the Senate Appropriations committee tomorrow.

House Budget Update

The House budget will be considered in the House Appropriations committee tomorrow morning and voted on in the full House on Tuesday and Wednesday. This is a very quick rundown.

The House budget spends $12 mil less than the Senate budget. Points of particular interest: $8 million for individuals residing in group homes no longer receiving PCS;  adjustment to special provision language regarding prior authorization for psychotropic medications; change in eligibility for PreK; ADATCs no longer eliminated; and includes compensation for victims of the state’s sterilization program.

Health and Human Services

Division of Central Management and Support

·      Eliminates 6 positions in the Office of Citizen Services associated with CARE Line (also in Senate budget)

·      Funds for Nonprofits: Provides funds for historically funded non-profits for FY 2013-14. The Department is directed to create a competitive block grant process for the appropriation of these funds beginning in FY 2014-15. In addition to the state funds, Social Services Block Grant funds are appropriated for non-profits for FY 2013-14 in the amount of $3,194,751 for a total appropriation of $12,723,885. (Senate Modified)

·      $8 mil Group Home Funding: Appropriates funds for one year for group home residents who were determined to be ineligible for Medicaid personal care services on or after January 1, 2013. The maximum monthly payment is set at $464.30 and is based on providing 33 hours of service per eligible recipient. Group homes may only use these funds for: non-hands on assistance, supervision and medication management for a resident who meets the required eligibility criteria. Funds for this purpose are capped at a maximum amount of $8,000,000 and will end upon the implementation of a tiered State-County Special Assistance Block Grant program or upon depletion of the funds. (New House Item)

·      $2 mil for statewide telepsychiatry program

Division of Child Development and Early Education

·      5,000 additional PreK slots with $24.8 mil from lottery receipts (New House Item)

·      Changes PreK eligibility to lower income to 130% FPL and eliminates other risk factors such as development delays, health impairments and limited English proficiency.

Division of Social Services

·      $4.8 mil for child welfare services (identical)

·      $1.5 mil R for adoption promotion fund (new in House)

·      $1 mil for permanency innovation (House)

Vocational Rehabilitation

·      $10k reduction to administration for the Independent Living program

·      Reductions based on historical transfers to the Medicaid program and replacing general funds with program receipts

Aging

·      HCCBG - Reduces by $500k to replace expiring federal grant but does not take Project CARE statewide

·      LTC Ombudsman: $200k in '14-15 to replace lost federal receipts and maintain the current level of service.

Division of Public Health

·      Postpones closing Child Developmental ServiceAgencies by one year and directs the division to make it a priority to maintain the CDSAs that have the highest caseloads of children who reside in rural or medically underserved areas of the State.

·      ADAP - Gov's position, reduces funding for the AIDS drug assistance program

·      Did not adopt eliminations in oral health

Division of Mental Health

·      3 way beds - add beds with funds from reserve and implement tiered payment system

·      Wright school and ADATCs NOT closing

·      Funds from reserve for 19 additional beds at Broughton Hospital

·      $1.8 mil for the Child Treatment Program

·      Adult Developmental Vocational Program : $250k to the LME/MCOs to serve adults on the waiting list  for the Adult Developmental Vocational Program.

Division of Medical Assistance

·      $3.75 mil reduction to offset federal funds received through the Health Homes for Chronically Ill increased federal match

·      Increased Medicaid co-pays (Senate)

·      Modified shared savings payment plan - to 2%

·      Prior authorization for MH drugs out

·      Medicaid Reform Proposal - creates Medicaid reform advisory group

·       Pharmacy Changes - shift to payments based on invoice costs; Implement a limit of 4 brand prescription for each Medicaid recipient without prior authorization and work with CCNC to implement reporting to CCNC providers that identifies Medicaid patients by pharmacy provider needing compliance help, identifies patients upon discharge to appropriate pharmacy and recipients who are frequent users of Hospital EDs. (House budget)

·      Same Rehab and physician limitations as Senate budget

·      Additional funds for ACA woodwork effect and Medicaid Rebase

·      Additional PCS services- language taken out, policy will be in bill

·      Medicaid subrogation - policy will be in bill

·      IOM board reworking removed

Education

·      Opportunity Scholarships (Vouchers): $50 mil to creates grants of $4200/year for some low-income students to attend private schools. Expected savings of $12 mil in first year and $36 mil in second year from decreased public school enrollment. $10 mil in first year and $40 mil in second year allocated for the grants.

·      School safety: Provides $10 million in recurring support for School Resource Officers in elementary and middle schools, $2 million for installing and maintaining panic alarms in public schools, and $4 million for school psychologists, school counselors, and social workers.

·      Pilot program for sports programs for students with disabilities: No additional funding but he Department may use up to $300,000 to develop and implement a pilot program for an integrated community-based adapted sports program for students with disabilities in K-12. If the Department uses funds for this purpose, the pilot program shall be consistent with the "Dear Colleague" letter addressing equal access to extracurricular athletics for students with disabilities released by the U.S. Department of Education, Office for Civil Rights, on January 25, 2013. The pilot program shall also include specific strategies to overcome barriers to the participation of students with disabilities in extracurricular athletics and incorporate a philosophy of personal empowerment for those students.

Justice and Public Safety

Adult Corrections

·      Closes Duplin, Robeson, Wayne, North Piedmont Correctional for Women and Western Youth

·      $4.75 mil for substance abuse treatment services for offenders assessed as moderate to high- risk for recidivism and high need for substance abuse services.

Division of Juvenile Justice

·      Eliminates 3 full-time executive positions (Deputy Comm Courts and Programs, Deputy Comm Facilities and Director of Detention Services).

·      Lenoir, Richmond, Buncombe YDCs close.

·      Safer Schools Initiative: Provides funding for the Center for Safer Schools, which will provide training and technical support to educators, law enforcement agencies and parents statewide $311,572 Recurring, $5200 NR, 4 positions

Judicial

·      NCPLS funded, funding reduced by $231k due to declining prison population

·      Restores 16 Magistrate positions

General Government

Elections

·      Funds to implement Voter ID (also in Senate)

·      HAVA funds: Provides matching funds for federal HAVA funds to support the Statewide Election and Information Management System (SEIMS) and two time-limited positions in FY 2014-15. These additional funds will allow the State to access $4,071,740 of HAVA federal funds for information technology efforts.

Housing Finance Agency 

•   Reduction to Housing Trust Fund same as Senate

Reserves

·      Eugenics Compensation: Creates a $10 mil fund to provide $50,000 for each verified victim of the State's Eugenics Program, to continue the operations of the Justice for Sterilization Victims Foundation, and to provide funds for administration.

Budget Update

Due to the Memorial Day holiday last weekend (and lots going on at the legislature), this budget update is long overdue.  The Senate approved its version of the budget the week of May 20th.  The House then spent last week considering the Senate version and the changes desired by the House.  We expect to see the House budget considered in subcommittees this week and voted on by the full House by June 13th.  At that time, the budget will go back to the Senate to accept or reject.  As there are certain to be many changes, the Senate will surely reject (or not concur with) the House version.  A committee of House and Senate members will then be appointed to consider the differences between the two budgets.

Below is a summary of the Senate proposed budget.  The full bill is online here and the original Committee Report is here. Stay tuned for the House proposals in the coming weeks!

Summary of the Senate Budget Passed May 23

General Provisions

·      Government Efficiency and Reform: The Office of State Budget and Management shall contract for a Government Efficiency and Reform review and analysis of the executive branch of State government, which shall be known as NC GEAR. The purpose of the review and analysis is to evaluate the efficiency and effectiveness of State government and to identify specific strategies for making State government more efficient and effective. The review and analysis may examine entire departments, agencies, or institutions, or similar programs in different departments.

·      Next Generation Secure Driver License System: As part of a report required by August 1, 2013, the Dept of Transportation must report on requirements and costs to implement a process to allow persons who are homebound to apply for or renew a special photo identification card, with a color photo, similar in size, shape, design, and background to a drivers license, by means other than personal appearance.

Education

·      Eliminate LEA Flex Cut - $376 mil restoration of funds for local school districts.

·      Classroom Teacher Cut - $286 mil cut in FY14 and $245 mil cut in FY15. Ratios for distributing guaranteed positions are revised to achieve this reduction (In 2013-14: K 1:19, 1-3 1:18, 4-6 1:24, 7-8 1:23, 9 1:26.5, 10-12 1:29).

·      Eliminates TAs in grades 2 and 3 and lowers the per student amount for TAs in K-1 - $142 mil cut in FY14 and $149 mil cut in FY15.

·      Instructional Support Personnel - $16.9 mil cut in FY14 and $17.1 mil cut in FY15. This will reduce the number of social workers, counselors and psychologists in schools.

·      Education Services for Children in Juvenile Facilities: Transfers responsibility and funding for teachers in juvenile facilities to DPI eff. July 1, 2014.  LEAs with a Youth Development Center or Detention Center in their district will be responsible for providing services and will receive funding from DPI ($3.8 mil allocated in 2014).

·      Funding for three additional consultants in the DPI Office of Charter Schools ($320k per year).

·      Excellent Public Schools Act - $18.6 mil increase in FY14 and $35 mil increase in FY15 to carry out provisions of the Excellent Public Schools Act, and $10.2 mil in FY15 for teacher merit pay.

·      Eliminates class size requirements.

·      Residential Schools: DPI shall not transfer any school-based personnel from the State's residential schools to central office administrative positions. The Special Provision also states that DPI shall retain all proceeds generated from the rental of building space on the residential school campuses. These receipts shall not be used to support administrative functions within the Department.

Health and Human Services

Division of Central Management and Support

·      Eliminates 6 positions associated with NC Care Line, which was previously eliminated in 2011.

·      Provides $3.8 mil in FY14 and $9.4 mil in FY15 for implementation of the DOJ settlement, to develop and implement housing support and other services for people with mental illness.  Said to fund 150 people in FY14 and 708 in FY15.

·      DHHS Competitive Block Grants for Non-Profits: Creates a competitive block grant process to fund non-profits for services that have historically been provided by non-state entities. The $9.5 mil allocation can fund programs directed at enumerated issues including autism services, brain injury, substance abuse, services for children and adults with I/DD and MI, food distribution, homelessness, and services for individuals aging out of foster care.

·      Modifications to Commission for the Blind: Eliminates the Professional Advisory Committee; and adds 6 members to the Commission for the Blind: 2 ophthalmologists, 2 optometrists, and 2 opticians (these appointments are also exempted from the requirement that a majority of the commission be persons who are blind).

Division of Child Development and Early Education

·      Pre-K Transfer – Transfers 2,500 NC Pre-K slots ($12.4 mil) in FY14 and 5,000 NC Pre-K slots ($24.9 mil) in FY15 to the Child Care Subsidy program. It also directs that all Child Care Subsidy dollars will be administered by local DSS agencies, not Smart Start.

·      Maintains current NC PreK standards except for children who have Limited English Proficiency.

Division of Aging and Adult Services

·      Project CARE: Transfers HCCBG funds to expand Project CARE statewide.

·      Tiered Special Assistance: Directs the Division to establish a pilot program in 4-6 counties (at least 2 urban and 2 rural) to implement a tiered rate structure within the State-County Special Assistance program for individuals residing in group homes, in-home living arrangements, and assisted living residences as defined in G.S. 131D-2.1. The  purposes of the pilot program are to (i) determine the best way to implement a block grant for this program statewide and (ii) test the feasibility and effectiveness of implementing a tiered rate structure to address program participants' intensity of need, including medication  management. The pilot program shall be implemented during the  2013-2014 fiscal year for at least a 12-month period. The Department shall implement the pilot program in collaboration with the local departments of social services in the counties selected for participation. As part of the pilot program, the selected counties shall receive a State General Fund allocation as a block grant to be equally matched with county general funds. The General Fund allocation provided to each county participating in the pilot program shall be calculated  based upon the average annual Special Assistance expenditures for that county during the 2011-2013 fiscal biennium, adjusted for the amount of projected annual growth in the number of Special Assistance recipients in that county during the 2013-2015 fiscal biennium. These funds may be used to pay for room, board, and personal care services, including medication management, for individuals eligible to receive State-County Special Assistance, subject to the  following limitations and requirements:   (1) These funds shall not be used to cover any portion of the cost of providing services for which an individual receives Medicaid coverage. (2) The pilot program shall comply with all federal and State requirements governing the existing State-County Special Assistance program.  (3) The tiered rate structure shall be based upon intensity of need, and an individual's placement within a tier shall be based upon an independent assessment of the individual's need for room, board, and assistance with activities of daily living, including medication management.

Division of Mental Health, Developmental Disabilities and Substance Abuse Services

·      Alcohol and Drug Abuse Treatment Centers: Close all 3 ADATCs.  A fraction of the savings from the cut will go to fund MCO treatment services - $10 mil in FY14 and $20 mil in FY15.

·      Wright School: Eliminates the program with a $2.7 mil recurring cut.

·      NC Child Treatment Program – The Child Treatment Program is an evidence-based platform that provides training and support to mental health providers to ensure fidelity and outcomes. $1.8 mil Recurring and $250K non-recurring.

·      Implement a statewide telepsychiatry program

·      Local Inpatient Psychiatric Beds (3 way contracts): Realigns the Division's base budget to transfer $9 million to increase the number of three-way contract community hospital beds available to Local Management Entities/Managed Care Organizations from 141 to 186.

Division of Public Health

·      AIDS Drug Assistance Program: Directs Public Health to submit a report to the HHS Oversight Committee on the  use of the funds appropriated to support ADAP for the preceding fiscal year; steps taken by DHHS to reduce the waiting list; alternative options for serving individuals diagnosed with HIV/AIDS who are eligible to receive services under ADAP, including the State Medicaid program and the federally facilitated Health Benefit Exchange that will operate in this State.

Division of Health Services Regulation

·      Three-Year Moratorium On Special Care Unit Licenses (July 1, 2013- July 1, 2016). This prohibition shall not restrict the Department from doing any of the following: Issuing a license to a facility that is acquiring an existing special care unit; Issuing a license for a special care unit in any area of the state upon a determination by the Secretary that increased access to this type of care is necessary in that area; and Processing all completed applications for special care unit licenses received prior to June 1, 2013.

·      Eliminate Comprehensive Report On Medication-Related Errors In Nursing Homes.  Repeals G.S. 131E-128.5, which requires the Secretary to contract with a public or private entity to develop and implement a Medication Error Quality Initiative. The Initiative provided for the receipt and analysis by the contracting entity of annual reports from each nursing home on the nursing home's medication‑related errors.

Division of Medical Assistance (Medicaid)

·      Medicaid Reform: Directs DHHS to create a detailed plan for, but not implement, significant reforms to the State's Medicaid Program that shall accomplish the following: (1) Create a predictable and sustainable Medicaid program for North Carolina taxpayers.(2) Increase administrative ease and efficiency for North Carolina Medicaid providers.(3) Provide care for the whole person by uniting physical and behavioral health care.  The Department shall submit its reform plan to the General Assembly no later than March 17, 2014, but is encouraged to submit its plan as early as it responsibly can. 

·      Co-pays: Increases co-pays to the maximum allowed by the feds. $3.3 mil reduction in FY14 and $5 mil reduction in FY15.

·      Hospital Outpatient Reduction – Reduces hospital outpatient reimbursements from 80% of costs to 70% of costs. $20.3 mil recurring reduction in FY14 and $42 mil recurring reduction in FY15.

·      Shared Savings Payment Plan – This establishes a 4% withholding on certain services that can later be reallozated to the providers based on savings achieved.  Services covered include Inpatient hospital, Physician, excluding primary care until January 1, 2015, Dental, Optical services and supplies, Podiatry, Chiropractors, Hearing aids, Personal care services, Nursing homes, Adult care homes, and Drugs.  DHHS will work with providers to develop a shared savings plan that will be implemented by January 1, 2015 that will include incentives to provide effective and efficient care that results in positive outcomes for Medicaid recipients.

·      Rate Freeze – This line freezes rates for a variety of services subject to an automatic increase.  $18.3 mil cut in FY14 and $28 mil cut in FY15. Hospital outpatient services' percentage of cost shall be adjusted to compensate for expected inflation that hospitals would be eligible for, and cost settlement will only be up to that percentage. Nursing direct care services shall not receive case mix index increases after June 30, 2013, until reinstated. The following rates are excluded: Federally Qualified Health Centers, Rural Health Centers, State-Operated services, Hospice, Part B and D Premiums, third-party and HMO premiums, drugs, and MCO capitation payments.

·      Medicaid Rebase - $434M expansion in FY14 and $607M expansion in FY15. The rebase accounts for enrollment growth and expected utilization.

·      Affordable Care Act – Senate budget writers include $49.7M in FY14 and $114M in FY15 for new Medicaid recipients under the ACA. The state anticipates significant enrollment growth as a result of penalties for non-coverage and outreach efforts.
Health Choice Transfer – All children under 133% of FPL will be served by Medicaid beginning 1/1/14. This line item transfers $22M in FY14 and $46M in FY15 from Health Choice to Medicaid to cover those costs.

·      Clarify State Plan Amendment Procedures: The Department may submit amendments to the State Plan only as required under certain enumerated circumstances: A law enacted by the General Assembly eithers directs the Department to submit an amendment to the State Plan, or makes a change to the Medicaid Program that requires approval by the federal government; A change in federal law, including regulatory law, requires an amendment to the State Plan; A change made by the Department to the Medicaid Program requires an amendment to the State Plan, if the change was within the authority granted to the Department by State law; or An amendment to the State Plan is required to ensure continued federal financial participation.  Additionally, 10 days prior to submitting an amendment to the State Plan to the federal government, the Department shall post the amendment on its website and notify the members of the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division, that the amendment has been posted, and further explanation of the amendment under certain circumstances.

·      Community Care Of North Carolina Study. Provides funding for a study to determine whether the CCNC model saves money and improves health outcomes. This was recommended by the State Auditor in the January 2013 performance audit of the Medicaid Program.

·      Codify Rulemaking Changes: Amends § 108A-54.1B to add 3 subsections: (b) Prior to filing a temporary rule authorized under G.S. 150B-21.1(a)(17) with the Rules Review Commission and the Office of Administrative Hearings, the Department shall consult with the Office of State Budget and Management on the possible fiscal impact of the temporary rule and its effect on State appropriations and local governments. (c) Rule-making authority granted under this section for particular circumstances or programs is in addition to any other rule-making authority granted to the Department under Chapter 150B of the General Statutes. (d) State Plans, State Plan Amendments, and Waivers approved by CMS for the Medicaid Program and Health Choice program shall have the force and effect of rules adopted pursuant to Article 2A 22 of Chapter 150B of the General Statutes. G.S. 150B-1(d) is also amended by adding a new subdivision to exempt DHHS from rule making with respect to the content of State Plans, State Plan Amendments, and Waivers.

·      Codifies Medicaid Eligibility requirements, as well as re-codifying coverage for workers with disabilities.

·      Service caps beginning January 1, 2014: (1) Prior authorization is required for visits in excess of 10 within a year for professional services provided by physicians, nurse practitioners, nurse midwives, physician assistants, clinics, and health departments,. This limitation and prior authorization requirement does not apply to chronic conditions. (2) Adult private duty nursing (PDN) is limited to four hundred thirty-two dollars ($432.00) per day. (3) Adult rehabilitation home visits for set-up and training are limited to three within a 12-month period.  (4) Prior authorization is required for all mental health drugs. A 72-hour emergency supply may be provided if a beneficiary is waiting for acknowledgment of the prior authorization request.

·      PCS Additional Services: allows additional PCS hours for recipients who have a degenerative disease characterized by irreversible memory dysfunction that attacks the brain and results in impaired memory, thinking, and behavior including gradual memory loss, impaired judgment, disorientation, personality change, difficulty in learning, and the loss of language skills. The Department shall reduce the rate for personal care services in order to fund the additional service hours authorized under this section within the budgeted amount of funds for personal care services.

·      Medicaid Subrogation Provision to comply with recent Supreme Court decision.

·      Repeal of Medicaid Appeal Provision: Repeals G.S. 108C-12(d) which currently says: “Burden of Proof. – The Department shall have the burden of proof in appeals of Medicaid providers or applicants concerning an adverse determination.”

·      Codify Counties Sharing In Fraud Recovery: Adds a new section to 108A: § 108A-64.1. Incentives to counties to recover fraudulent Medicaid expenditures. The Department of Health and Human Services, Division of Medical Assistance, shall provide incentives to counties that successfully recover fraudulently spent Medicaid funds by sharing State savings with counties responsible for the recovery of the fraudulently spent funds.

·      Payment suspension and audits utilizing extrapolation. Rewrites 108C-5 to allow the Department to withhold payment (not exceed the amount of any interest required by law plus nine percent (9%) of the sum of the total overpayment amount identified in the notice of overpayment and any penalty required by law) from providers prior to the completion of an appeal regarding an overpayment

·      Codify Provider Performance Bonds: Adds § 108C-14 to allow the Department to require Medicaid-enrolled providers to purchase a performance bond in an amount not to exceed $100,000.  The Department may require the purchase of a performance bond or the submission of an executed letter of credit or financial instrument as a condition of initial enrollment, reenrollment, recredentialing, or reinstatement if any of the following are true: (1) The provider fails to demonstrate financial viability. (2) The Department determines there is significant potential for fraud and abuse. (3) The Department otherwise finds it is in the best interest of the Medicaid program to do so.

·      Writ to superior court on OAH decision: Allows any party to a contested case at OAH to petition the Superior Court for a writ of certiorari, mandamus, prohibition, supersedeas.

·      CCNC to develop a pay for performance model using PMPM payments to encourage better care management.

·      Requirements for governing board of managed care entity: Requires a specific board make-up for any entity contracting with the state for management of care and cost containment, including members appointed by the General Assembly.

Department of Public Safety

Division of 
Juvenile Justice



·      Closes Buncombe, Richmond and Lenoir YDCs - $5.35 mil recurring cut.



·      Community Programs - $1.5 mil recurring increase. 


·      $550k per year to continue operating a Multipurpose Group Home in Craven county.

Administrative Office of the Courts

·      Special Superior Court Judges abolished

·      Expunction fee raised from $125 to $175

Adult Corrections

·      Closes Bladen, Duplin, Robeson, Wayne, Western Youth, Buncombe and Orange Correctional Centers.

·      Eliminates the State contract with Prisoner Legal Services and replaces with software for use in the prison libraries.

Department of Administration

·      Eliminate Youth Advocacy and Involvement Office

Secretary of State

·      Lobbyist registration and principal fees raised to $250 with no waiver or reduction for nonprofits

General Government

·      Implement voter photo ID requirement

·      Eliminates $185k to the School of Government

·      $876k/year reduction to HTF

·      Office of Administrative Hearings – add 1 ALJ and one law clerk