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Senate Approves Budget Adjustments Bill

During the long legislative session last year, the NC General Assembly created a two-year budget for the state. During this year’s short legislative session, lawmakers review the budget and make adjustments based on current spending, revenues, and any new priorities that arose in the past year. The governor released his budget proposal several weeks ago, and the Senate released its budget adjustment bill Wednesday, May 28. The Senate crafted much of the bill outside of Appropriations subcommittees meetings and held a single public committee meeting with the full Appropriations committee on Thursday. The Senate approved the bill on the floor in Friday and Saturday sessions. Now the bill moves to the House, and House Appropriations Committee meetings are expected to start next week. The House typically will pass its own version of the adjustments bill, and then negotiations take place between the House and Senate over differences in the final bills. The budget is supposed to be in place by June 30, the end of the state’s fiscal year.

Below are items in the Senate’s proposed budget that affect individuals with autism or developmental disabilities or are somehow related. (You can view the proposed Senate budget adjustments in their entirety on the General Assembly’s website: www.ncleg.net. Links to budget documents are on the left side.)

Public Education/Schools: The budget overall increases funding for the state’s K-12 public schools by $66.5 million, for North Carolina’s community colleges by $22.2 million, and for the University of North Carolina system by $17.7 million.

  • K-12 Schools: The Senate budget provides an 11% one-time teacher pay raise and supplemental salaries for teachers with advanced degrees. It increases the public education budget by 66 million. Much of the $465 million that will be used for pay raises comes from eliminating teaching assistants in the second and third grades. The Senate’s budget has been criticized for adjusting the school budget due to projections for a lower student enrollment next year, despite the state continuing to grow in population.  Also cut are funds for school bus replacement and transportation expenses. The Department of Public Instruction is cut by 30%.
  • Read to Achieve: The budget includes an additional $6 million to fully fund the Read to Achieve program, which provides focused reading camps, special literacy intensive classrooms, and other resources to ensure students can read proficiently by fourth grade. The program has raised concerns with parents, children’s advocates, and disability advocates over the number of tests required. In addition, the House and Senate have passed H230, Clarify Read to Achieve, which would allow the program to be more flexible in the ways it assesses reading proficiency and exempt students with disabilities who use EXTEND-1 testing. The bill must go back to the House for concurrence, and if passed, would move on to the governor’s desk.

Cuts to CDSAs: The $10 million year two recurring cut to the state organization that manages early intervention services remains in the budget. New special provision language directs the Division of Public Health to close four of the 16 CDSA offices. CDSAs assist families with young children who have been identified with developmental delays to get services and connect to resources for their children. Early intervention (EI) is critical for reducing future disability and for reducing long-term costs. North Carolina already limits EI services and eligibility, leaving the state at risk for legal action.

Medicaid: The Senate proposal adds $350 million to cover the $143 million shortfall in Medicaid, to ensure ongoing health-care services and cover an increase in the eligible population.  However, it pays for $30 million of that gap by ending Medicaid eligibility for some people receiving State County Special Assistance and some people with very high medical costs (the “medically needy”). Senate budget writers have suggested those individuals can purchase health coverage elsewhere, though it’s not clear whether that other coverage, likely through the Health Insurance Exchange Marketplace, will cover the long-term care costs included in Medicaid coverage.

  • Moving Medicaid state agency out of NC DHHS: Unhappy with the way that the Department of Health and Human Services has managed Medicaid, the Senate has set aside $5 million in the budget, which draws down an additional $5 million in federal funds, to create a state Department of Medicaid separate from DHHS. This secretary-level department is seen by many as a precursor to developing a private managed-care system for Medicaid in NC. The Senate’s budget would also end all of the state’s contracts with Community Cares North Carolina (CCNC), the nonprofit started by the state of North Carolina that has been improving health outcomes for the state’s Medicaid population.
  • Plan for elimination of Medicaid “optional” services and populations: The budget special provisions ask for the development of a plan to reduce or eliminate “optional” eligible populations and services in the state’s Medicaid plan. Background: Most services under a state’s Medicaid plan are not required by federal law, and thus are “optional” for states to offer. Innovations/CAP waiver services for people with I/DD and autism, dental, mental health services, ICF-MR (residential placements) for people with I/DD, personal care, prescription drugs, physical therapy, occupational therapy, and speech therapy are all “optional’ services. In addition, many populations are “optional” as well: the state is not required to cover the aged, blind or disabled at or below poverty level who are not getting SSI, the medically needy, children 0-5 who are near poverty level, children 19-20 at poverty level, and others.
  • Study/Develop Additional 1915 c waiver: Requires the Department of Health and Human Services, Division of Medical Assistance to design and draft a 1915(c) wavier, similar to the supports waiver under the old CAP – I/DD program. The waiver would serve 3,000 additional adults with developmental disabilities from January 1, 2016, to June 30, 2019. The budget for each slot would be capped at $20,000, and the slots would be managed as part of the LME/MCO managed-care system. The DHHS, DMA would report its findings to the House and Senate Appropriations Subcommittees on Health and Human Services by March 1, 2015. This is good news for the 10,000 people waiting for Innovations/CAP services, though ASNC is concerned about the focus on adults, because both children and adults with autism have been waiting up to seven years for services from this program.

In addition, the Medicaid budget proposal would:

  • Impose a 3.5% assessment on Managed Care Organizations (MCOs). This assessment on administrative costs appears to be used to enhance the capitation rate and increase services, but it’s not clear how that would work.
  • Implement a preferred drug program for mental health drugs
  • Impose additional assessments for hospitals and other providers
  • Include a 2% provider rate reduction, except for providers with contracts under managed care

Wright School: The Senate budget closes Wright School, which serves elementary-age children with serious emotional and behavioral disorders.

No permanent fix for Group Home funding (to replace funds lost due to changes in personal care services): While last year’s budget included some one-time funding to assist group homes, no permanent funding source has been identified. DHHS officials have suggested that LME/MCOs can use “B3” funds from their capitated managed-care payments to fill the gap at group homes, but many advocates fear that this will result in cuts to other needed services as well as inconsistent funding for group homes in different parts of the state. Background: Group homes in North Carolina are funded in a very confusing and convoluted way. Personal Care Services (PCS) funding was filling in for reductions in rates that happened many years ago. With changes to PCS that ended that service for some people living in group homes, people could not be adequately supported to live in these settings. NC still needs a long-term fix to fund residential supports and services for people with intellectual and developmental disabilities. The state needs to have a plan that accounts for what people need, what the service and supports would look like, and how to fund them.

If you have questions about public policy issues, please contact Jennifer Mahan, Director of Advocacy and Public Policy, at 919-865-5068 or jmahan@autismsociety-nc.org.

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