Summary of Health and Human Services Budget Provisions

Part 2 of 4 on the 2014-15 Budget

Again, the Committee Report summarizing the budget adjustment provisions is online here and the full budget bill is online here.

Health and Human Services

CENTRAL BUDGET AND MANAGEMENT

·         Flexibility Cut: DHHS is required to cut $16 mil from administration expenses, vacant or filled positions, or contract expenses on a recurring basis. The budget prohibits DHHS from taking funds that provide direct services, but the term is not defined.

·         Provides $2 mil for state matching funds to support the Health Information Exchange.

·         Allocates $2 mil for continued short-term assistance for group home residents who became ineligible for personal care services on or after January 1, 2013.  A report is due by April 1, 2015 to HHS Oversight with a detailed plan for a long-term solution for individuals residing in group homes who would like to continue residing in this setting and, as a result of an independent assessment, have been determined to need only supervision, medication management, or both; and a list of funding sources for each group home that receives assistance.

·         Allocates $175k from the departments’ competitive grant funding to St. Gerard House for the purpose of assisting individuals with autism spectrum disorders, learning disabilities, developmental delays, and behavioral health needs. St. Gerard House shall be required to seek future funding through the competitive grants process.  

      

MEDICAID

·         Medicaid Reform: The House and the Senate were unable to reconcile their different proposals for Medicaid Reform. We will be returning to Raleigh in November for a special legislative session to come to an agreement. (As a reminder, the Senate proposed a separate Medicaid agency outside of DHHS and allowed private managed care organizations; the House proposed continuing the current agency structure and public Accountable Care Organizations.)

·         Allocates $136 mil in non-recurring funding for Medicaid for FY 13-14 for unpaid claims and enrollment backlogs.

·         Medicaid Contingency Fund: The budget allocates $186 mil to a contingency fund that may be used for a Medicaid overage but only after the department has applied to CMS to eliminate automatic eligibility for all SA recipients (not just those over 100% Federal Poverty Level as discussed below).

·         State/County Special Assistance (SA): The budget reduces Medicaid eligibility for recipients of SA to only those individuals whose income is 100% of the Federal Poverty Level or less. The current standard is individuals with insufficient income or resources to provide a reasonable subsistence. The special provision language also attempts to grandfather in all those who are currently Medicaid eligible through Special Assistance.  However, Medicaid eligibility will no longer be tied at all to Special Assistance if Medicaid is over budget and the Department needs to access the above contingency fund.

·         Mental Health Drug Management: Directs DHHS to make adjustments to the Preferred Drug List, prior authorization, utilization review and other restrictions to achieve $6 million in savings this year and $12 mil in future years.

·         Modify Intensive In-Home Service: No later than October 1, 2014, DMA shall modify the service definition for the Intensive In-Home Service to reflect a team-to-family ratio of one Intensive In-Home team to families for both the Medicaid and NC Health Choice programs.

·         Study Additional 1915(c) waiver for adults with developmental disabilities: directed to study a waiver that would create 1,000 new slots each year for 3 years, to serve a total of 3,000 additional adults with developmental disabilities from January 1, 2016, to June 30, 2019, with a budget for each slot capped at $20k per plan year per beneficiary, and slots will target individuals on the registry of unmet needs.

·         Traumatic Brain Injury Waiver: Directs DMA to design and draft a waiver to add a new service package for Medicaid eligibles with TBI. A TBI subcommittee of the HHS Oversight committee is also to be established.

·         Personal Care Services Management: Directs DMA by March 1, 2015 to propose a financial plan to contain the budget growth of PCS to keep the total PCS budget at the same level as the fiscal year 2014-2015 certified budget for PCS. It also authorizes the HHS Oversight committee to engage a contractor to study issues related to reforming and redesigning PCS while meeting the State's obligations under the ADA and Olmstead.

·         Provider Rates: Reduces provider rates by 1.0% effective January 1, 2015. This reduction applies to all fee-for-service providers with the exception of hospital inpatient services, drugs and dispensing fees, nursing homes, non-PCS home care services, private duty nursing, all cost based providers, services where rates or rate methodologies are set by the federal government, negotiated through a contract, hospice, CAP services, FQHC and Rural Health Centers or as specified in special provision.  This is in addition to a 3% reduction passed last year, which applies to inpatient hospitals, Physicians, excluding primary care until January 1, 2015, Dental, Optical services and supplies, Podiatry, Chiropractors, Hearing aids, Personal care services, Nursing homes (ending June 1, 2015), Adult care homes, and Dispensing drugs.

·         Nursing Home Case Mix Index Adjustment: Freezes the case-mix index adjustments for direct cost of nursing home rates effective January 1, 2015.

·         Personal Care Services (PCS) Study Optional Program: Allocates $300,000 to contract for a study to define a new limited PCS optional service program. The report from this study is due December 1, 2015. Additionally, the Department will study and report on Adult Care Home inspections, procedures and processes.

·         Medicaid Appeals: Amends appeals related to non-LME/MCO decisions to shift the burden of proof to the recipient in all appeals; and to clarify in all appeals that a recipient who accepts and offer to mediate and then does not attend the mediation without good cause shall have their appeal dismissed. It also shifts the burden of proof in provider appeals to the provider.

·         County of Origin Issues: Directs DHHS to address issues arising when Medicaid recipients move residence from one county to another county and from one LME/MCO catchment area to another, including reducing the administrative burden on ICFs which contract with more than one LME/MCO, and engaging counties to create a plan to resolve issues related to the county of origin for social services and public assistance programs.

·         Hospital Funding Changes:

• Hospital Outpatient Cost: Reduces the settlement for the UNC Hospitals and Vidant, formally known as Pitt Memorial Hospital (ECU), for outpatient services to 70% of Medicaid costs effective July 1, 2014. This represents a 2.1% reduction in overall hospital outpatient Medicaid spending.
• State Retention of the Hospital GAP Plan Assessment: Increases the State retention on assessments through the hospital GAP plan from 25.9% to 28.85% effective July 1, 2014.
• Single Base Rate for All Hospitals: Establishes a single base diagnosis related group (DRG) rate for inpatient hospital services based on the statewide median base rate at June 30, 2014 for all hospitals effective January 1, 2015.

 HEALTH SERVICE REGULATION

·         Modifies Moratorium on Special Care Unit Licenses to allow licenses to be issued for facilities that were in possession of a certificate of need as of July 31, 2013, that included authorization to operate special care unit beds.

EARLY CHILDHOOD

·         NC PreK: $5 mil to accommodate the recommended rate increase and teacher salary increases, and additional slots if funding is available. The budget also replaces nearly $20 mil in general fund dollars with TANF funds on a non-recurring basis.

SOCIAL SERVICES

·         Child Protective Services Funding: $7.4 mil in additional funding for child protective services and $4.5 mil for expanded in-home services. The General Fund appropriation for Child Protective Services is increased by 101% to $27 million.

·         Enhance Oversight of County Child Welfare Services: Provides $750k for nine positions to enhance oversight of child welfare services in local county departments of social services. These positions will monitor, train, and provide technical assistance to the local county departments of social services to ensure children and families are provided services to address safety, permanency and the well-being of children who are served by child welfare services. 

·         Child Protective Services Statewide Evaluation: Provides $700k for an independent, statewide evaluation of Child Protective Services at local departments of social service and the Department of Health and Human Services. The evaluation will assess performance, caseload sizes, administrative structure, funding and worker turnover and include recommendations on improving Child Protective Services.

·         Child Protective Services Pilot Program: Provides $300k to develop and implement a pilot program designed to enhance coordination of services and information among agencies to improve the protection and outcomes for vulnerable children served through Child Welfare Services. The agencies included in the pilot are local county departments of social services, local law enforcement, the court system, Guardian Ad Litem programs and other agencies as determined appropriate by the Department of Health and Human Services. 

·         Foster Care Assistance Payments increased by $5 mil.

·         Drug Testing for Work First: Provides funding for implementation of Work First drug testing that was passed in last year’s budget.

·         State County Special Assistance Income Eligibility: Changes SA eligibility to income at or below 100% of Federal Poverty level, regardless of where recipients reside. Current recipients of SA are grandfathered in and will continue to receive SA. Saves $378k in the first year.  Accompanying reduction of $4.2 mil for reduced SA caseloads.

·         Adult Care Home Case Management: Eliminates funding for the Adult Care Home Case Management Service which ended in June 2013. This service provided funding for county DSS workers to perform the assessment and case management for individuals in adult care homes and licensed family homes who were heavy need residents. The Personal Care Services (PCS) Program now uses an independent assessment to determine eligibility for PCS and therefore the Case Management Service is no longer needed.

·         Public Guardianship: Amends the law regarding status reports filed by public guardians and directs DHHS and the Administrative Office of the Courts to develop a plan regarding the Department's evaluation of complaints pertaining to wards under the care of publicly funded guardians in order to ensure that, in addition to current requirements, the complaint process incorporates a face-to-face observation of the ward, an interview with the ward, or both. This was a DRNC agenda item.

PUBLIC HEALTH

·         Early Intervention / CDSAs: The budget maintains the previous year's $10 mil budget reduction and the elimination of 160 positions, but it does not include the mandated closure of four CDSAs. It also mandates maintenance of current eligibility requirements.  This was a DRNC agenda item.

·         Child and Family Support Team: Eliminates $252k in funding for two positions that were allocated for start-up of the program.

Mental Health/Developmental Disabilities/Substance Abuse Services

·         Funding for the Wright School is maintained.

• $1.8 mil reduction to LME/MCO administration through projected savings from consolidation from 9 LME/MCOs operating in FY 2013-14 to 7 or fewer by June 30, 2015.  Leaves $30 mil for administration.

·         Eliminates 7 positions at Central Office Administration.

• Eliminates $6 mil LME/MCO risk reserve.
• Allocates $2.2 mil for community-based crisis services to increase the number of co-located or operationally linked behavioral health urgent care centers and facility-based crisis centers; increase the number of facility-based crisis centers designated by the Secretary as facilities for the custody and treatment of involuntary clients with priority to areas of the State experiencing a shortage of these types of facilities; to provide reimbursement for services provided by facility-based crisis centers; and to establish facility-based crisis centers for children and adolescents.
• Ensures that $2.4 mil will be used exclusively to support TBI services.

AGING AND ADULT SERVICES

·         Reduces General Fund appropriation to the Home and Community Care Block Grant by $970k, a 3% cut.

·         Allocates $100k Non-Recurring for Senior Center capital costs.