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The Senate’s budget proposal for the next two years had some significant health policy changes packed into it, namely a proposal to peel Medicaid oversight away from the N.C. Department of Health and Human Services and open the door for managed-care management of the $14 billion program.

House and Senate Republicans have spent the last few years debating what to do with Medicaid and how to address routine budget overruns from the federally-mandated program that provides health care coverage for low-income, seniors, the disabled children and some of their parents and the disabled.

House members favor keeping Medicaid within DHHS, and phasing in changes that would open up the Medicaid program to management from non-profit groups (called ACOs, or accountable care organizations).

Sen. Ralph Hise, the Republican senator from Spruce Pine who has long pushed for a managed-care solution to Medicaid, said that beginning the Medicaid reform process and moving Medicaid administration into a stand-alone division would allow the legislature to better predict and cap costs for what is the state’s largest program. (Scroll down to watch video of Hise talking about the Senate budget proposal.)

The Senate proposal does have room for ACOs, with options to have managed-care companies offer state-wide coverage while also having six regional divisions that will have slots for ACOs to work, Hise said.

Any changes to the state Medicaid program will need federal approval as well.

The Senate budget, which is expected on the floor for a vote tomorrow, would also cut ties with Community Care of North Carolina, a provider-led network that had been credited with keeping Medicaid costs down by closely managing patient cases, and pairing high-risk patients with primary care physicians. The contract with the state would end by Jan. 1. The cut will amount to a $32 million cut in the 2015-16 budget year, and savings of $65 million in the second year.

There were plenty of other note-worthy details in the budget proposal, with some re-investments in some areas of the budget, and cuts in the others. To read the 504-page budget, click here. The accompanying money report is herehere.

Among the proposed changes were proposals to:

  • Eliminate 520 slots in the state’s pre-kindergarten program, which currently offers early education offerings to 28,700 low-income children.
  • Get rid of the state’s “certificate of need” process by 2019, in which hospitals and medical centers need to make a case to state regulators for adding surgical or other specialized medical offerings, in favor of a more free-market approach that’s been a cause long championed by conservative groups in the state.
  • Extend the foster care age to 21, offering more help for children instead of cutting them off from state services at age 18.
  • Shut down the Wright School, a part-time residential facility in Durham County that provides inpatient help for children with severe disabilities and behavioral issues.
  • Get rid of the Office of Minority Health in DHHS (cut of $3.1 million). Senate Republican leaders said Monday the elimination would allow more money to flow through to actual services that affect minority populations including teen pregnancy and sickle cell programs, but Democrats argued an office dedicated to looking at overall health disparities between racial groups was important.

N.C. Health News has a great rundown as well about what’s in (and what’s not in) the budget. You can read that here.

 

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News

An annual audit of North Carolina’s compliance with federal human services programs uncovered significant issues at the state’s health agency, including overpaying for Medicaid services and skipping a background check for adoptive parents.

The audit released on March 31 found problems with nearly every program they checked at the N.C. Department of Health and Human Services, from administration of the federal food stamps program to Medicaid billing and neglecting to spend a federal grant to help AIDS and HIV patients.

DHHSA DHHS spokeswoman said the agency has worked under in recent years under Secretary Aldona Wos to improve the management of federal programs, and plans on addressing the issues highlighted in the audit.

“The department has made significant progress improving its operations over the past two years and we continue to value the role that audits can play in further enabling us to do so,” DHHS spokeswoman Alex Lefebvre wrote in an emailed response to questions. “This annual audit will be used by the department to continue on the path of improved effectiveness.”

There were other findings that didn’t point to wasted money, but may have put children’s safety at risk.

The N.C. Department of Health and Human Services didn’t check to make sure prospective adoptive parents were clear of prior abuse allegations, by checking a registry of abuse and neglect allegations.

“The Department did not monitor that the child abuse registry was checked before a child was placed for adoption,” the federal compliance audit stated. “As a result, children could be placed in an unsafe environment.”

DHHS, in the response contained in the audit, said it thought county-level officials had ensured the abuse and neglect check had been done. Criminal background checks were conducted.

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Commentary, NC Budget and Tax Center, Raising the Bar 2015

Editor’s note: This is the latest installment in “Raising the Bar” — a new series of essays and blog posts authored by North Carolina nonprofit leaders highlighting ways in which North Carolina public investments are falling short and where and how they can be improved.

Gov. Pat McCrory’s budget proposal for the years 2015-17 offers a welcome change of direction in the area of behavioral health services, which would see spending increase by 1.5 percent compared to current law. Though far from what is really needed, this modest increase would be a real turnaround from years past when lawmakers imposed significant cuts to programs and direct services as a way to balance the budget and make up for revenues lost to tax cuts. We are pleased to see the Governor’s support for restoring some funding to the health and human service budget to serve citizens with mental health, intellectual or developmental disabilities, and substance use disorder services.

In addition to stopping most of the bleeding, this money would help the state to catch up on at least some of what was lost during the recession and begin to rebuild to address current needs. Furthermore, over the past few years, lawmakers enacted provider rate cuts year after year. Under the Governor’s plan, there are no further provider rate cuts.

Some new things to take note of that we are very heartened to see: almost $24 million is invested in services for mental health treatment in our prisons. This is the first time funding has been allocated specifically for this kind of treatment. With this money, 72 beds that are not open due to budget constraints at Central Prison’s mental health hospital can be fully staffed. Additionally, behavioral health treatment units can be opened at eight high security prisons. Funding was put in the budget to support the Treatment Alternatives for Safer Communities (TASC) program. TASC integrates community mental health and substance use disorder services with the criminal justice system to improve outcomes. The funding, about $1.86 million, will reduce caseloads of care managers to accommodate more referrals. Read More

News

Reproductive rightsThe North Carolina Department of Health and Human Services released proposed abortion provider regulations today and the preliminary take seems to be that the intent of the rules themselves may not be as malicious or destructive as that of the legislation that gave rise to them.

As Alison Kiser of Planned Parenthood told WRAL.com:

“We are pleased that DHHS included a Planned Parenthood provider as part of the regulatory process. As we have been for 40 years, Planned Parenthood affiliates in North Carolina are committed to our patients and meeting the health care needs of the more than 25,000 women, men and young people that come to us every year for high-quality, affordable health care. Ensuring the health and safety of our patients is central to our mission.”

Meanwhile the folks at NARAL Pro-Choice NC issued the following statement:

DHHS Releases Rules for Abortion Clinics in North Carolina
Advocates caution that process must put women’s health before lawmakers’ political agenda

DURHAM, NC—Today the North Carolina Department of Health and Human Services (DHHS) released a set of rules regulating abortion providers in North Carolina, in accordance with SB 353, which the legislature passed in an extended legislative session this year.

“The Department of Health and Human Services has written a set of regulations with input from experts in the field of reproductive health care. At NARAL Pro-Choice NC, we believe it’s critical that this rule-making process not be politicized by the same political interests and lawmakers that sought to eliminate access to abortion care in the first place,” said Suzanne Buckley, Executive Director of NARAL Pro-Choice North Carolina.

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Commentary

Medicaid expansionIn case you missed it over the weekend Ned Barnett of Raleigh’s News & Observer had an on-the-money column about the latest  bizarre claim from the McCrory administration that we can now expand Medicaid under the Affordable Care Act because they have “fixed” what was a “broken” system. As Barnett notes:

“It’s good news that the governor is now open to doing the right thing about Medicaid expansion. Even Tillis now says he might favor it. Refusing to do it could cost the state $51 billion in lost federal money over the next decade, according to a report from the Robert Wood Johnson Foundation.

But this change of position shouldn’t pass without a look at the rationale for not doing it in the first place. Wos’ reign at DHHS has been marked by massive provider payment problems, an exodus of staff, plummeting morale and expensive consultants hired to fill in the gaps. Now she’s saying that the administration of Medicaid has been fixed and it’s ready to take on a half-million new recipients.

If that turnaround is true, Wos has accomplished an amazing feat of introducing efficiency and accountability. Yet there’s nothing to suggest that is the case. DHHS under Wos remains an agency riddled by vacancies and burdened by a reputation for administrative dysfunction that has discouraged top applicants. But the Medicaid program itself was never “broken”. It has operated in North Carolina for decades and in recent years has successfully held down administrative costs compared with the national average. Medicaid’s “out-of-control costs,” which Republican legislators say busted the state budget, reflect wishful budgeting. Simply putting a number in the budget won’t hold down costs. People need treatment, and when there’s a recession Medicaid rolls grow. With the economy now improving, Medicaid costs are coming in under budget.”

In other words: It’s great that McCrory and Wos want to expand Medicaid and even fine if they want to delude themselves about the reasoning, but anyone who’s been paying attention knows their claims and rationales are bogus.