This article was contributed by Jennifer Mahan, Director of Advocacy and Public Policy at ASNC. It is the first of three parts wrapping up the NC General Assembly’s 2016 short session.
The NC House and Senate agreed on a budget adjustments bill for the second year of the state’s two-year budget, which allocates a total of $22.34 billion across state services including education and health and human services. The 2016 budget adjustments spend less than 3% over what the 2015-2016 budget provided and only adjust the second year of the biennial budget. The budget includes funds for the state’s rainy day account, teacher and state employee raises, additional K-12 students with disabilities scholarships, and 250 additional Innovations home and community waiver slots, while reducing the base budget for Medicaid to reflect lower projected costs for healthcare services. Changes to tax revenue were addressed in a separate bill, which broadens the sales tax base and lowers individual income taxes by increasing the standard deduction from $1,000 to $2,000 through next year.
The $152 million planned cut to single-stream funding for mental health, developmental disabilities, and substance abuse services (MH/DD/SA) remains in the budget. Last year, $120 million was removed with a provision to restore $30 million if targets were met by the end of the 2015-16 fiscal year in June. Those targets were met, and the $30 million restored. The same budget provision remains in place for this year: if targets are met, $30 million will be restored at the end of 2016-17. However, the overall cut remains at an additional $152 million from LME/MCO reserves, typically used for services to people without other health-care options.
There are a few special provisions that target issues for the intellectual and/or developmental disability (I/DD) community including a comprehensive look at federal and state changes to the I/DD system, a strategic plan to address behavioral health in NC that looks at gaps in the LME/MCO system, and a study on the rates paid for certain types of services. As we look toward the 2017 budget process, single-stream dollars will have a significant deficit that could affect direct services across the state. Overall, the health and human services budget attempts to address key priorities from the General Assembly and the governor with small expansions to crisis funding, waivers, and disability scholarships and the preservation of existing autism services in Medicaid and through the nonprofit funding sections, but no large-scale expansion of services or special education funding.
The full budget bill with special provisions and conference reports listing specific dollar amount changes can be viewed at www.ncleg.net; links to budget documents are in the left column. The overall budget includes technical corrections made in House Bill 805 that may not be included in the ratified version of the budget until after it is signed into law. In the sections below where “recurring funds” are mentioned with an R, this means that the program will be funded in an ongoing way (at least for the next year and hopefully into future years) and “non-recurring” noted with an NR indicates that funds are one-time and only for the 2016-17 fiscal year.
Health and Human Services Budget
Innovations waiver slots: The final budget includes $2.6 million (R) for 250 Innovations home and community-based waiver slots (formerly CAP-IDD) to begin opening January 1 2017, which were included in the governor’s budget proposal. Innovations 1915 (c) waivers provide services to people who qualify for institutional level care because of intellectual or developmental disabilities, but can be served under a community-based program in their homes.
Replacement of LME/MCO single-stream funds: $30 million will be restored to single-stream funding which is used for MH/DD/SA services and individuals that are not eligible for Medicaid. An additional $30 million will be made available if there is a surplus in the Medicaid budget. This is well short of the $120 million and $152 million removed in budgets last year and this year.
Governor’s Task Force recommendations: The budget reserves $10 million (R) and $10 million (NR), to implement the recommendations of the Governor’s Task Force on Mental Health and Substance Use. The funds shall be held in the Mental Health and Substance Use Task Force Reserve Fund, will not revert, and shall remain available until expended. The task force recommendations include increasing access to child crisis services.
Dix property and crisis beds: The budget includes provisions for the sale of the Dorothea Dix Hospital property: $18 million and $2 million in funds will go toward increasing access to behavioral health care hospital beds and crisis centers for children and adolescents.
Medicaid rebase: This removes $350 million (R), 7.8%, from the Medicaid budget based on lower than projected costs for health care and the number of people eligible for Medicaid. These funds were moved into the general fund to support other budget increases.
Special provisions of note
The state budget includes policy provisions directing how funds are to be used and often include requirements to look at how departments or programs are operating, including the fiscal impact of making changes to them. A number of provisions could have effects on intellectual and/or developmental disability services.
IDD Study/Study Innovations Waiver: In the budget, the General Assembly’s Joint Legislative Oversight Committee on Medicaid and NC Health Choice is directed to study issues related to the delivery of services for people with I/DD, including causes and solutions for the growing wait list for Innovations home and community-based waiver slots. Potential solutions to address the wait list that are mentioned in the study are funding increases, creating “supports” waiver slots, and utilizing 1915(i) waiver options. The study is also expected to take a look at issues surrounding single-stream funding (state funds for non-Medicaid services), the impact of federal mandates on supports and services, and the coverage of services for autism including any state plan amendments needed to address guidance from the Centers for Medicare and Medicaid Services that directs states to offer autism behavioral services such as Applied Behavior Analysis (ABA) or other treatments.
Rate study for residential services: This would study the “adequacy” of rates paid to providers for residential services, including supportive services such as respite, room and board, Special Assistance, transportation, and state-funded supports.
LME/MCO gap analysis and strategic plan: Section 12F.10.(B) of the budget special provisions requires the NC Department of Health and Human Services to develop a strategic statewide plan to “improve the efficiency and effectiveness of state funded behavioral health services,” including IDD services. Included in this plan are a determination of the state agency responsible for state-funded behavioral health, defining current and future roles of the LME/MCOs; a process for including measurable outcomes in contracts with providers and managed care organizations; a statewide needs assessment for MH, IDD, SUD, and TBI, looking at a continuum of care across services and counties; “solvency standards” for fiscal management of LME/MCOs; and anything else needed for the report. The plan and report to the General Assembly is due January 1, 2018.
Study of Medicaid coverage for school-based health: The General Assembly has asked NC DHHS to identify all school-based health services that are eligible for federal matching funds through Medicaid and report on the fiscal impact of adding Medicaid coverage for these school-based services not currently offered in NC.
Report on the progress of ABLE program trust: The Department of the State Treasurer is required to report to the General Assembly by December 1 on the status of the Achieving a Better Life Experience (ABLE) Trust program that would allow people with disabilities and their families to open 529 savings plans.
If you have questions about the North Carolina state budget or other policy issues, please contact Jennifer Mahan, ASNC Director of Advocacy and Public Policy at firstname.lastname@example.org or 919-865-5068.
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