A searchable audio archive from the 2013-2016 legislative sessions of the North Carolina General Assembly.

searching for


Reliance on Information Posted The information presented on or through the website is made available solely for general information purposes. We do not warrant the accuracy, completeness or usefulness of this information. Any reliance you place on such information is strictly at your own risk. We disclaim all liability and responsibility arising from any reliance placed on such materials by you or any other visitor to the Website, or by anyone who may be informed of any of its contents. Please see our Terms of Use for more information.

House | July 1, 2015 | Committee Room | Appropriations: Health and Human Services

Full MP3 Audio File

Good morning and welcome to Health and Human Services our sergeant at arms today is Young Bay, Bill Moores, Jim [xx] and coil [xx] our pledges Henry Allan Wake county, Becky Corn, George Aby you have Craig Davis, [xx] Nas[sp?] County master bill. Lisa Brit-love, Carl Max, Stephanie Ross Rachel Ferguard[sp?] Speaker Moore.   Jack [xx] Randolph County Pitt and [xx]. Just to give a little bit ahead up for tomorrow meeting on public hearing the sign of back their better mike that you can sign up today forward to speak tomorrow, it'll probably hear anyone interested please sign up today and there'll be a limit of two minutes speaking tomorrow for the public hearing. I don't know if any of our chairs have any remarks this morning. Everybody's good. We stayed in meetings long enough yesterday, we kind of talked it out. Did So first on the agenda, we're going to have a HHS money report start with Debra Landry. Denise did you have anything, any remorse to start off. Okay, Deborah Thank you, Mr. Chair and members of the committee. Before we get started on the comparison report, I wanted to give you an ananlysis of the differences in the total spending between the House and the Senate. In 2015/16, the House spends billion and the Senate spends $5.1 billion and the difference is $223.4 million. In 2016/17 the House spends $5.4 billion, the Senate spends $5.2 billion and the difference is 223 . $7 million. Also I just wanted to point out as we go through the differences, staff is going to go over the major differences between the House and the Senate budgets, we'll not be going over every item. When you look on page one of the comparison report you'll notice the title is shaded on number one. Any time there's a shaded item, that means it is in controversy. There are some items that are shaded that the only difference is the language and the snappy but that's just technical. There are notes on the printed copies that says technical, it's what gets posted online we don't have those handwritten I'm [XX] on but it I'm your hand out so it does if it's purely a technical change. Mr. Chairman may I ask you a question? Chance goes to representative [XX] Thank you, this is a different report, it includes what's similar as well as That's correct What's different And then Thank you Right, so what's shaded is different, if it's not shaded at all then it's identical and I can say today we're just going to go over the major differences. So, starting on page, item number line item number 4, this is a house only provision for vacant positions where the house limited the vacant positions 57 within the department of health and human services and the senate did not do that Adam Seven is INC Trucks. This is operational savings from INC Trucks in the senate budget that is not in the house budget and this is lower cost to operate the system INC Trucks Item eight is miscellaneous contractual. Contractual services, that's in the Senate only and that's a non recurring reduction of 3.2 million dollars. Turn over to page three.

Item 9 is also a Senate only item and is it's first require changes this is recurring dollars of $360 on each year and 3.2 million non reccurring on increased to provide funds make changes to Insys first associated with allowing Easter barn of charities, to administrate their Medicaid and food nutrition services programs. Just want to go over that instead of going on each line in see fast and the see track of both funding did in both budget there is one major difference and that is on page four item 13, the Senate pulls out the child welfare the funds for child welfare case management system and provide those funds on none accruing bases to purchase the child welfare case management system and it been demonstrated it's ability in the US and that it should be integrated within to be able to is within see fast but it is to purchase a separate child welfare case management system. For the down on page four item 16 of information exchange the house budget it at 3.1 million each year, the senate at 8 million and you will hear more about this during this special probation discussion. If you turn over to page 6, I would like to point out there a number of differences in the competitive law grand both budgets both the house and the senate increase funding for the the compettive bar breads over there different levels and designate the funds to different entities one of the major differences is on item 20 [xx] and that is to transfer funds from elimination of the officer of minority health and physical activity in his usual brands in the division of public health health bending from the elimination of those officers is transferred into the competitive block ground to provide money to for programs to reduce health disparities and to improve physical of health and nutrition across the state and that is in the senate only. Adams 24 is also a senate only item and that's work for compensations I want to reserve and that was done across all departments in the state. Turnover to page 8 Adams 28, 29 and 30 are all around the justification review this are Adams 45 required justification reviews as a part of the state wide plan to invest evidence space programs focussed on reducing infant mortality, improving birth outcome there are ideas the same budgetsthe difference there is some difference in monies and you'll hear a little bit more about the justification review as it's covered in the special provisions. Item 31 is a house only item on page 10 and that's residential house space 20 million non-recurring in the first year. Items 32, 33 and 34 are house only items and that's around [xx] benefits for state employees for the division of aging and child services on page 11, the senate took no action and the house provided funding for the home and community care block grant of 960000 dollars non-recurring in each year. We'll start with the division of child development and early education, both budgets were federal funds for state funds varying levels, I'm not going to go over each one but these varrying levels it will have to be worked out, in conference items 42 and 43, both the the house and senate fund precare at the same appropriation amount but as you can see on item 43, the house provides a also provides lottery funds of 2.7 million and the senate did not do that. Item 44 is a senate only item and that the child care subsidy market rate increase, these provides funding for children age zero, one and two. I'm sorry it provides fundings to increase the market rate in tier one and two counties for children ages zero, one and two in those counties in that area also on page 14 item 46 this is a Senate only item this provides funding of $300, 000 non-recurring for the program evaluation division to have a contract for a plan to consolidate NC precase in childcare subsidy programs. The House has different plan and you'll hear more about this again in special provisions and that leads us to public health and to Denise. Good morning. The public health items start on page 15. Items 47 and 48

Debra has talked about a bit in CMS but the House for items for the Office of Minority Health basically that the Governors recommendation which was to swap out some of the general funds support for preventative health services block grant. The Senate instead has eliminated that office and transferred those funds to CMS. Going on to items 50 and 51, it's the same issue with the physical activity and nutrition branch. The House swaps out general funds support for block grant receipts. The Senate will eliminate that and transfer the funds to the competitive block branch. Regarding the Office of the Chief Medical Examiner which are items 57-65, the House and the Senate took identical actions as it relates to providing funds for training, automation, equipment and the fellowships at the ECU in Wake Forest University. The Senate does, in item 60, provide additional funds. They provide $400, 000 recurring to increase the rate for transporting the bodies. Also the Senate budget for items 63 and 65, they budget the fiscal impact of the senate autopsy the increase, which is increase from the current 1250 to I'm $2800 for an autopsy. The house also increases the autopsy to fund other current 1250 into 1750 of the house budget does not include the national item when they are budgeting the receipt. Their final item that I will point out in public health is item 73 the forensic test alcohol branch. This is the senate item because the senate across all appropriations areas made a decision to eliminate a lot of highway transfer and highway remote on highway fund and to keep it in the highway fund to use only for highways and one of those remarks is the forensic test for alcohol branch which conducts the alcohol testing on the road side. They actually provide training and satisfication for doing that may also have to that mobile that are used to do the road side side checks and the senate they have not eliminated the transfer for forestic test alcohol, they have eliminated the recurring amount this year and given them a non recurring amount pending the outcome of the justification provision review which will be decided when you come back in 2016 whether to continue to provide recurring highway funds for these purpose. The highway funds make up about third of the budget for forensic test to alcohol brand. That conclude the major items for public health and Debra  will now do the major differences in the social services project. We go to page 24 item 80 and 81 the senate extends foster care to age 21 and the house extends foster care to age 19 there is slight difference in money in the second year, first year for the a position  only on both to help with the administration in getting that programs started. Turn over to page 25 item number 84 is the house only item in that successful transition of use of in foster care 1.3 million in the first year, 1.75 million in the second and its a recurring funds it's fund to support demonstration project to improve outcome for youth age 17 to 20 years-old, who would transition from foster care. Item 85 is a senate only item and it is to provide recurring funding for maternity homes any amount of $925, 000 now turn it over to Steve Allen to go over the division of medical system and health choice items. Beginning on page 26 item 88 through 93 in the senate budget will handle differently on house budget in item 97 for this house had flags card budget that William bind it all this now the senate identify each individual component. 28 article 94 and 95 this relates to the elimination of discontinuing with 2% add on to the LME MCO competition payments up to for house is 1st January 2000 16 starts actually starts on January 1st 2016. Article 96 is elimination from the claims payment for the graduate medical education and on for hospital inpatient services which will again cause a change though the dish plan through the MRI plan [xx] those

through those particular supplemental payment processes On page 29 Article 98, 99 and 100 are all related. Article 98 is elimination effect of January 1th 2016 of the CCNC PMPM time rates[sp?] as well as because primarily standard of the individual position for participation in [xx]. This interesting contracts runs through December 1st of 2015. The second item reinstates the direct payments that will for were actually being paid to N3CN[sp?] through the per-capita or through the BMPM time rates[sp?] for health department so this reinstate a direct payment of funds to January 1st back to the health department for those services, and then finally in 100 it takes those proceeds from that funding increases primary care physician rates to 100% of Medicare as well as administrative rates to 100% of medicare. The next major item is on page 30 item 104, and this is funding for medicaid reform, the House had 2.5 million of non recurring senate has $5 million per year of recurring, and the final two items of measure items on medicaid or on page 31 107 is the re-base, the difference between the House and the eSnate here were updates from the departments based on more current around utilization enrollment as well as expected achievements of reduction items. Item 108 reflects the changes as part of the appropriations authorization of the S chip or the health choice program what it does, it actually calls for two year period for the state to have other night by 23% increase in the federal match rate, which would actually put the match rate above 99% for two years over that biennium budget, the difference between the house and the senate is the senate version utilize information from department that included all populations, the house looked at only portion of the population. Beginning on page 32 is health choice item 109 is is worth the same item I just talked about in medicaid reflecting under health choice at 23% more increase item 110 is an expansion item senate only where they will be introducing a cost settlement for a hospital health patient services on the same basis that medicaid cost settles hospitals, and 111 for re-base, and I'll turn it back over to Denice. Moving on to the division of mental health and disability substance abuse services on page 34, item 116 the senate reduces the single strain funding by $186 million non recurring in each year that's about a 55% reduction and the House does not include a similar item. Item 122 the House provides $5.1 million recurring to address the short falls in the state's facilities particularity at central regional hospital. Item 128 the House provides $2 million non-recurring to expand behavioral health crisis units in the community to be used to divert persons from the emergency rooms. And then finally items 132 and 133 are Senate items in which the Senate eliminates the general fund appropriation for the ADAC and converts them to receipts. and the general fund appropriation is then used to be provided to the LME/NCOs to purchase ADAC services for the two years of the biennium and you will hear more about that in special provisions. That concludes the major items for differences for mental health and Steve will now review the health services regulation budget. On page 41 the item I'd like to point out is item 138, what this reflects is the phased elimination of the certificate D program in the special provision which we'll be talking about it in a minute. It actually identifies which services currently required certification will be eliminated in which year they will be eliminated, so this represents the cost, at least during the biennium period, for the elimination of that program. Mr. Chairman, that concludes our review of the money report. okay thank you.

The just a reminder for the one's that came in late that the signup sheet back on the mic by the mic on the table for tomorrows public hearing. Please, if you're interested in speaking tomorrow, please signup in senate today for that, so now we'll move into the special provisions Josh Jones. Good morning, I will be suing the document entitled house incentive budget health and human services items and controversy and I do want to point out that this document only contains special provisions that are in controversy, it does not contain the identical provisions, and we'll be highlighting the major differences between the house and the senate budget. so to begin with we'll start on page 348, and we'll also be looking at page 350, this is special provisions 128.2, funding for programs to improve children's health and establish competitive grounds process. This is a new special provision including in both the house and senate budget that follows the money items, it requires the department to designate a lead agency to work in consultation with the UNC school of public health, to design a statewide plan to improve North Carolina's rankings for birth outcomes, infant mortality and  the overall health of children from birth to age five by focusing on early provisions, the house and senate versions are substantially similar except that on page 348 in subsection C in comparison to page 350 in subsection C, there are variations in the program that will be converted from recurring to nonrecurring funding during 15-16 fiscal year and then subjected to justification review in addition their are some differences in the amount of non recurring appropriations for these program and specifically the house and senate appropriated different amounts of money for the maternal and child health contracts with the house providing sightly more. The house provided funding for one healthy beginning contract where as the senate provided funding for two contracts the house converted funding for residential maternity homes from recurring and non recurring and subjecting this program to justification review where as the senate did not, so under the senate budget residential maternity homes would continue to receive recurring funding and finally the senate budget converted funding for high risk maternity clinics from recurring and nonerecurring and subjected them to justification review where as the house did not and continued the recurring funding for high risk maternity clinics. Another difference between the two versions of that in subsection S on page 349 the house appropriated $2.5 million and recurring funds for each fiscal year of the biennium, plus an additional 2.5 million non-recurring for the 15-16 fiscal year to establish a competitive grants process for local health departments to provide evidence based programs to achieve the goals of these section whereas subsection F on page 351, the senate did not provide an additional 2.5 million in non recurrence funds for fiscal year 15/16 for the competitive garnt process. On pages 358 and 359 section 12.85 funds for oversight administration of state wide health information exchange network, the house and the senate took very different approaches to addressing the HIE network on page 358. The House provision requires the secretary's office to use appropriated funds to effect the transfer of the Orion contract and other underlying contracts associated with the functionality of the HIE network from the non profit entity known as NCHIE to the department in the event of dissolution of that non profit. The house version allows the department to use appropriated funds to pay for the monthly operating expenses of NCHIE but not for any other purposes. Then turning to pages 359 all the way through 367, the senate provision directs the use of appropriated fund to establish a successor HIE network to be overseen and administered by a new state controlled entity know as the NCHIE authority. It also created an NCHIE advisory board to provide consultation to the new authority. The successor HIE network will gradually become and remain 100%

receipt supported by establishing reasonable participation fees approved by the General Assembly and by drawing down available matching funds whenever possible. As a condition of receiving state funds including Medicaid fund, hospitals with an electronic health record system, Medicaid and all providers that receive state funds for the provision of health services will be required to participate in the HIE network. The goal is for all Medicaid providers to be connected to the HIE Network by July 1st, 2017, and for all other entries that receives State Funds to providing health services to be connected to this successive Network by July 1, 2018 Now turn the mic over to Lisa Whelchel to discuss another provision within the secretary's office. Thank you. If you turn to page 372. This is the competitive grants process for non profits provision. Both the Senate and House version continue the grant process for non profits, the biggest difference comes with the senate decision to office of the minority health as well as the physical activity and nutrition [xx] as was previously mentioned during the money report with those eliminations, those grant functions will now move to the office of the secretary, so if turn to page 374 this is the senate version and beginning on page 376, you'll see that language has been added to address health disparity related initiatives that previously a function of the office of minority health in the division of public health. I'll mention that the language that you see under sub section C was the language substantialy similar to provision that was in the house budget and section 12E point 3 part three was in entitled focus community eliminating health disparity initiative so when you look at the differences you'll see that this language has been formally dropped here. On the bottom of page 377 under sub section D this is whether compared to the grdaes process had been set up under the office of secretary for physical on nutrition related activities, and again that was due to the elimination of the physical activity and nutrition branch in the division of Public Health. Next if you turn on page 383, this a senate only provision that again follows the money as previous mentioned during the money report, and the Child Management Welfare Case System. This provides fund to purchase issues of child welfare, case management systems that has demonstrated it's ability to provide child welfare case management services in another state We in the United State this system is the intent for the system to be integrated with [xx] and to work along with the work product of a provision that's also included in the senate budget related to the Child Protective Services Pilot Project, and I will also note that the department is the intent that the department is not to move forward with the implementing the child welfare case management system in [xx]. There's also language requiring coordination with the department of information technology which is newly formed under the senate budget and there's also a report on requirement in subsection C with the report due October 1, 2016 and Mr. Chair I'll turn it back over. Okay, I'm sorry, there aren't any more in office of secretary, next we'll begin with the division of child development and early education. If you turn to page 386, child care subsidy rates and it's easier to I think work from the senate version so we'll if you look at page 88, in subsection A the house version regarding eligibility requirements listed under the age requirements zero to third grade and first the 6th to 12th age group it listed it for 4th grade through age 12 and so that's the biggest difference under sub-section A. I will note that in sub-section B although this item is not in controversy it's in agreement with both the House and the Senate versions. I just wanted to know that

there is languish there that deals with excluding from the divisions policy for definition for income unit on non-parent relative caretaker, so this takes care of the grand parents issue that has been raised during this budget. Under 12B point 2C, this is a difference of regarding the co-payments, the second Senate on line 17, the Senate version now goes back to languish as it was drafted in 2014 requiring co-payments not to be prorated for part time care whereas the house version have those payments allowed the peroration for a part time care in it's version. Moving  to page 391 this is the child care allocation formula and the major difference here, it would be easier to look at the Senate version on page 393, and the major change comes online 28 through 36 and basically this amends the allocation of childcare subsidy funds to counties, Counties will receive the amount they expended in the previous fiscal year and if a county's spending co-efficient is less than 95% they are not eligible to receive any additional funding except when a market rate increase is approved by the General Assembly. This requirement as was the case last year can we waved due to extra ordinary circumstances and that's the languish that you see beginning on lines 37 on page 393. And also it states that a county who spending co-efficient if 95% or above they may receive and increase in their allocation if funding is available. Alright, if you'll turn with me now to page 399, this is the smart start provision and again we will look at the senate version so that it will be easy to identify the changes against page 399 the two major changes one is under sub section B dealing with administration, in the house version there was a cap at 8% for all local partnership which has been the bullet plate language has been existing in the previous versions. What the senate did was to put a require that not more than 3.25 %for spend it for central administration for the NC partnership and then with respect to local partnerships and 2015/2016 there's a gap at 7.75% and then that moves to 7.5% begin in the 2016/2017 fiscal year. Under sub section D there has also been some adjustments about the march regarding in the House version, for cash there is 11% met requirement with in kind being 4% and with a total match of 15% and that was what was established according to last year's budget. What the Senate did was say for the 2015/16 fiscal year, the cash requirement is moved to 12%. The in kind is moved to 5% for a total of 17% for that fiscal year, and then in 2016/17 the cash requirement moves to 13% and income moves to 6% for a total of 19% for the 2016/17 fiscal year. Moving on to pages 402 and 403, this is, I'll start with the Senate version because what the Senate does  is establish the basically want the division program evaluation division, excuse me, to include in it's work plan a directive to merge childcare subsidy Pre-K and the Smart Start programs. And as mentioned when Debra gave the money report, there's funding provided for that and there is a report that due March 1, 2016. The house's approach on page 402 was to simply establish a subcommittee of HHS oversight and to study the early childhood and family support programs that included

the subsidy program, NC Pre-K and Smart Start. And then under subsection C, that sub-committee was to develop a proposal for a statewide plan and report by April 1, 2016. Okay, moving on to the Division of Social Services, on page 409, I'll just know that this was the House only provision and this is based on representative Ambrose Bill, House Bill 933 Successful transition of foster care in youth and this is dealing with youth aging out of foster care and this was not included in the Senate budget. On pages 411 and 412, this is the provision that deals with extending foster care and the age of foster care of course the house extended it to 19 years and they just have language[sp?] here basic contingent[sp?] upon the passage of either of the two bills that were introduced in the houses, the senate decided to drop in senator Burger bill which is senate bill 424 and they extended the age to 21 and so this makes all the statutory conforming changes with intent that this become effective August 1 2016, and lastly I will move on page 419 the foster care family act again this was a bill that was introduced that relates to the prudent the parenting standard in providing a insurance and various other things for use in foster care, I will say again this is again based on senator Burger bill, senate bill 423 but this has been rectified so more than likely this language will be removed, and Mr. Chair that completes my division of social services I will hand over back to Joyce Jones to begin division of public health turn with the pages 425 and 426. I would like to highlight section 12.4, this will begin a series of special provisions related to the office of the Chief Medical Examiner. Pages 425 and 426 relates to appointment, training and replication of appointments of county medical examiners. Both the house and the senate versions were moved corners from the category of professionals eligible for appointment as medical examiners in subsection A on page 425, the house maintains the existing requirement that chief medical examiner appointment a minimum of one medical examiner per county whereas on page 426 in subsection eight the senate requires the chief medical examiner to appoint a minimum of two medical examiners per county. The mandatory annual training requirements and the provision allowing the chief medical examiner to revoke a medical examiner appointment for failure to adequately perform the duty of the office are identical in both versions. Turning to pages 427 and 428, 12.5 this is an increase in North Carolina medical examiner our top cc. On page 427 on line 18 through 19 the house increases the autopsy fee from $1250 to $1750 as satisfied in July 1, 2015, and subsection B the house also requires department to send message of autopsy financing and cost sharing of this service between the state and counties, as well as the amount of state appropriations that would be necessary to eliminate the shortfall between the amount of the autopsy fee and the actual cost of performing an autopsy. If you turn to page 428 and sub-section A, you'll see that the senate increases the autopsy fee $2800 effective July, 1, 2015 but the senate does not include the reporting requirement in its provision the senate version also specifically disallows the office of the Chief Medical Examiner from using appropriated funds to provide a supplement to the counties, to ask that any portion of this increased autopsy fee. On pages 429 and 430, this reflects the increase in the North Carolina Medical Examiner fee on page 429, line 12 the house increased the medical examiner fee for death investigations and reports from $100 to $200 and on page 430 line eight, the Senate increased this fee to $250 with both increases taking into effect on 1st

July 2015. Page 431 30.7 an increase in transportation rate for certain investigation and autopsies. This is a new Senate-only unit provision that follows a money item, it allocates $400, 000 for both years of the fiscal biannuam to increase the base rate paid for the for transporting bodies for death investigations and autopsies from $90 to $190 dollars for the first 40 miles, and then $1 per mile after the first 40 miles. Page 432 transfers function of office of minority health officers and its senate only provision related to the competitive grants process that list to discuss. It'eliminate the office of minority health and transfers to the secretary office the responsibility for establishing and administering an competitive grants process for evidence based program proven so eliminate or reduce health [xx] amount minority population in the state. On page 433 the transfer of functions physical in nutrition program to the secretary's office this is another new Senate only provision related to the competitive grants process that was discussed earlier by Lisa, it eliminates this program and transfer the functions to the secretary office. Page 434 this is a news senate only provision that transfer the office several health and community care from the division of central management and support otherwise known as the secretary's office to the division of public health and it changes the name of the office to the rural health section. Moving on to the division of mental health development of visibility and substance abuse services, the first provision that I will be highlighting starts on pages 439, and 440. 12F 2 single string funding for house development of data feasibility conception to this community  services. The House version on page 439 reflects our standard [xx] language for single stream funding. The Senate version on page 440 retain these [xx] language in subsection A but it also add a new subsection B that follows the money item, it directs to the department to reduce the single stream funding allocation by 186 million, non-recurring for each year of the fiscal [xx] and to allocate this reduction of among the elem MCO they stand a percentage of the total each elem MCO receives in the 14-15 fiscal year. During each year of the 15 to 17 fiscal billenium each allonym[sp?] M. C. O is directed to use its cash reserve to provide at least the same level of services paid for by single stream funding during the 14, 15 fiscal year. On page 45, this is a new senatorial provision that creates a separate authority on this hospital property funds within the house trust fund and directs the the next proceed from the sale of the Dick hospital property be deposited into the funds. These money maybe carted or expended only upon an act of appropriation by the general assembly. Page 446-447 12F. 7, this is a new house only provision thaty's based on House Bill 923 by Representative Moran. It also rises a three year pirate program in three different regions of the state to assist hospitals and converting existing unused acute care beds into licensed short term impatient beds without undergoing certificate of need review. Subject to the availability of funds deposited into the mental health trust fund from the net proceeds of the sale of the Dicks Hospital's property, the Division of Mental Health can expend up to $25 million of these proceeds to pay for renovation or building cost associated with converting existing acute care beds in the participating hospitals into licensed short-term inpatient behavioral health beds. On page 453, this is a new Senate-only provision that terminates all state appropriations to the alcohol and drug abuse treatment centers and transitions the ADATCs into being 100% receipts supported beginning with the 15/16 fiscal year. It redirects state appropriations for inpatient alcohol and substance abuse services to the LME-MCOs, but ensures that the ADATCs will be able to continue operating for the duration of the 2015

to 2017 fiscal biennium by requiring the LME-MCOs to purchase a minimum of 100% of their inpatient alcohol and drug abuse services from the ADATCs during the 15/16 fiscal year, and then a minimum of 90% of these services from the ADATCs during the 16/17 fiscal year. You'll note that in subsection C on page 453, the department is directed to develop and report a plan to allow the ADATCs to remain 100% receipt supported after 2017. I also want to mention section 12 S. 10 going back to pages 450 and 451 of the document. These are actually identical provisions that should not be included in the items of controversy, the Senate and the House have identical language under special provision, so it's erroneously included in this document. Moving on to the division of health services regulation, if you turn to page 465, on page 465 licensure of overnight respite facilities. This is a new House only provision that's based on Representative Arvelis Bill, it establishes a licensure process for the provision of overnight respite services and facilities certified to provide adult daycare or adult day health services and in licensed adult care homes and family care homes, the Senate budget does not include a similar provision, I will note that there is a session law that has passed which extends the duration of the existing overnight respect pilot program from June, 30th, 2015 to June, 30th, 2017 and that session will well provides a more comprehensive evaluation of the provision of overnight recipe in an adult care setting. And then finally on page 469 phase repeal of certificate of need. This is a new Senate only provision that provides for the repeal of all certificate of need requirements in three faces beginning on January 1, 2016 with all requirements repealed by anywhere you want in 2019. That concludes my report and now I will turn in over to Jenifer Helment[sp?] to discuss the medicaid provisions. Alright picking up with the first significant medicaid provision that I'll point out is on pages 474 and 475, it's section 12.8, the House and Senate version differ, those versions continue the 2% add on to the allonym MCO monthly administrative payment which has been funding the allonym MCOs contractually required medicaid risk reserve account. The House version will do that effective July, 1, 2016 the Senate version is effective immediate and adds sub-section A requiring the allonym M. C. O to transfer money from their cash reserve to their risk reserve accounts and in amounts sufficient to bring the balance of the Risk Reserve Account to 15% of annual Medicaid premiums. The Senate directive to transfer reserves applies after the LMECOs have allocated funds in their cash reserves, to replace the loss of single stream funding required by section 12.2 in the Senate budget, which was discussed in the mental health section, the directive applies to funds in excess of those needed to meet the monthly Medicaid Service Expense of the LMECOs, and after the Risk Reserve Account reaches 15% of annual premiums, then the department will discontinue the monthly 2% add-on The senate version also adds sub-section C, directing the department to work with LMECOs to consolidate multiple existing reserve accounts. Next, the next provision I would point out is on page 478 - 80, this was the house only provision that the Senate did not take, it would authorize DHHS to administer medicated health choice, within the programs and active budget, sub-section A now withstands the current restrictions on state-planned amendments submissions for the biennium. Subsection C creates a new joint legislative oversight committee on medicate, subsection D requires quarterly reports on an outcomes operations and budget of the programs,. Sub section E requires an annual four year forecast with proposed necessary changes subsection F requires 90 days prior notice to the general assembly of changes and subsection G directs for any state plan amendment or waiver related to Medicaid reform would be subject to prior consultation with [xx]. The next youth provision begins on page 488 and goes to page 504 since the senate communicate

transformation provision and what I have done to summarize this provision is I have prepared a chat which is also included with your materials and it's a one page document on the front page has a chart that compares the medicaid reform features in the senate provision where the medicaid reform features start working in house bill 372, the third edition which was passed by the house. On the back side of this document, it also has both bring out many features, the reorganization plan, creating a new health benefits authority that this senate that is also in the senate provision, so quickly walking in some of the highlights, the differences between the two reform plans beginning at the top of the chart the senate would create a new health benefits authority as an independent agency to conduct medicaid reform where the house would use the different [xx] of helping advised by the newly created quality insurance advisory committee. Those plans would have the same basic goals of budget predictability and quality care. They both would use the payment structure of full risk capitated health plan and the Senate Plan would allow for provider led entities in managed care organizations to contract for payment and the House Plan would allow provider led entities only. Both plans provide for state wide coverage and regional coverage, the Senate plan would allow 3 State wide contracts and up to 12 regional contracts in 6 regions to be set by the Health Benefit Authority whereas the House Plan would have individual contracts that must cover 30, 000 lives, every 30, 000 lives and may cover less in the entire state but the contracts and aggregate would have to cover the entire state. In regard to the individuals that will be covered in the Senate plan, all Medicaid beneficiaries except the dual eligible categories where Medicaid pays only Medicare premiums will be covered. And in the House plan 90% of all Medicaid beneficiaries state wide will be covered except for dual dirigibles. The covered services under the Senate plan LNMCO's services will be to pass to contract during the first 3 years, and to premier care case management will be eliminated. In the House plan all services except for Eleny and service, dental, and drugs and pharmacy would be included and it'll build on the existing enhanced primary care medical home model. The timeline for implementation of the Senate plan will be full implementation in approximately 2 years by August 1st 2017 the house plan will have full implementation of capitated payments within five years of enactment it will be approximately 2020 withnperformance and quality goals that must be met within six years of enactment and then both plans creating new legislative oversight for the medicaid program turn to the second page some of the highlights of the features of the senate proposed Health Benefits Authority, it will be a new agency independent of DHHS managed by a compensated board of experts, effective October 1, 2015,  the authority will become the Medicaid single state agency would have broad authority to administer both Medicaid and Health Choice except for setting eligibility. Health benefits authority, I'm sorry, DHHS willl continue to operate the program under an agreement with the Health Benefits Authority until transformation is complete in August of 2017. The Health Benefits Authority would plan for and implement Medicaid transformation. DHHS will identify from among its current employees those who are essential to operating the current Medicaid programme, and those employees will be eligible to receive bonus payments. DHHS employees would not automatically transfer to the Health Benefits Authority. The authority will hire the Medicaid director and staff of the authority will be exempt from certain portions of the State Personal Act certain employees would also be subject to a cooling off period. And some additional responsibilities of the authority would be to keep Medicaid withing it's budget by providing annual four year forecast, and having access to a Medicaid reserve account. There will be required strategic planning and performance measurement. There will be increased transparency and reporting and some other features of the board are that it would have seven members the secretary of DHHS will be non-voting ex officio members. Medicaid providers, lobbyist for Medicaid providers and state employees would be excluded from serving on the board, and compensation to board members will be comparable to compensation paid to boards operating large health insurance plans. So that concludes our review of this hand out. Moving back to the items in controversy packet will pick up on page 505.

The next major provision is the Senate-only provision. This discontinues the primary care case management contract the CCNC and uses the savings to increase rates to primary care doctors and OB/GYNs to 100% of the Medicare rate, and this provision follows the money item that Steve discussed with the money report. And on page 508 there's a Senate-only provision that's related to funds that are in the Medicaid contingency reserve which was established in the 2014 budget with approximately $186 million. This provision directs that those funds would remain in the reserve unappropriated and could be appropriated after the budget director finds a Medicaid shortfall and a state plan amendment has submitted to the Centers for Medicare and Medicaid services to delink eligibility for Medicaid from the eligibility for the state county special assistance program. And that concludes the major Medicaid provisions. Okay, and we've concluded our review of the documents. Thank you, Mr. Chair. Thank you, Steff questions from committee, do we've any, Representative Inso? I will, probably call staff to get specific questions to some of these issues, but I'm interested in getting more information about how, given the local government requirement for the LAMCO's[sp?] to have a fund balance, and given that the 2% risk reserve would have to be replaced if it disappears with I believe stop laws insurance or insurance of some kind. Is that all manageable or have I got that wrong? It seems to me like it's hard to do what they've done with the moving the risk reserve and the fund balance around replacing single stream funding with the fund balancing. I'm Steven from Fiscal Research. I may answer your first question about the our fund balance of the medicate risk reserve is a state require fund balance we are currently researching other states cash sheets and rules to determine if they are other action mandated reserve [XX] reserves as required, at this point we haven't found a specific reference requires [XX] action the fund balance it relates to 52%, what the senate does is actually to takes existing cash, dollars losers into their medicate risk because they're which would increase sudden needs contract in the waiver requirement 15% so they would have a cash reserve of 15% that would maintain and then the 2% that would be discontinued can followup. Follow up. So you're saying that if there's excess funds addition to fund balance that would be moved in to the two percent into the risk reserve  if you said. I just one thing to point that their is a difference in fund balance and cash balance basically but this proposes is take the cash reserve, the cash balances that are not restricted, there is s restricted cash balance relate to the medicaid risk reserves so we will be taking this unrestricted cash balances moving enough after funds the 186 production of single stream funding taking remaining cash reserves moving those into the risk reserve so the medicaid risk reserve both in terms of in their fund balance as well as their cash balance would be there. If I can just pursue this a little bit further, so you are saying that the local, that the requirement of the local government commission for local government does not apply to the LME MCO. We are currently researching but the general statue 159 and 122 to identify specific reserve requirements under 159 section aid I believe it is, talks about a balance budget ordinates that talks about an equation in there that determines when you have a balance budget situation, and I guess should in current assets and so forth of how you actually calculated unrestricted fund balance. We have not found a specific requirement within that fray[sp?] fund balance for now. So it's assumed that it's not required. What percent of the fund balance is that the [xx] is currently have is used to pay providers when they don't get the medicate funds from the department. I have understand that part

of the used fund balance have been to have immediate payments to providers and that sometimes they're waiting for the money to come from the department the 1/12 to come in, and the provider payment would be late, so I think that they've done something in the field with this cash flow to keep some provider rate and they've also use that fund balances I think to fill the end for it has given them 50 flexibility I think to be creative with some of there programs to increase rates for some providers for use of some hellenist[sp?] have deficiency of shortage of some providers and they've used to that, they've had some flexibility, will all of that go away? As from the information from the AAMCAs at the end of April, their total current cash balance is at that point well around 740 $7 million when you look at the entire state. That 747 million, about 604 was what they identified as Medicaid which really is coming through the capitation payments through that from the MCO business, about 34 million I believe it is, was identified as local 103 was identified as state for federal funding so they actually had cash balance of over $100 million for that state federal side and terms of what this what would do is that end of December we estimate they need about a $100 million to fund the 15% and then if you took the 180 plus the 185 next year that would mean they would need about $365 million of cash, currently they have 740 $7 million of cash. Is it working? Thank you, any other questions or whatever, if not I'll certainly want to thank the staff for all the hard work long hours that trust that they have kept to this to come up to get this far and we know we got a long list to go, but thank you so much for for getting this cleared and get the difference sense just to give us IDN to the committee members, we I can assure you that we are still have a long list to go with working with the differences, but at this time just a reminder, if you want to speak up tomorrow there's a sign up sheet in the back please sign that up and we actually have a few minutes left in this so if anyone in the audience wants to speak today step up to the mic and introduce yourself. Mr. Chair Yes. Sorry I had to I was made aware earlier and dint get with you before that Miss Sherry Brudford[sp?] is only going to be available today and if we have any issues regarding the child welfare case management issues if we would like here from her or whatever we could I don't see Sherry Bishop is okay, sure you want to speak? Perfect. Thank you for recognizing me Sherry Braid sure Deputy Secretary Department of Human Services and one of the business sponsors for the NC fast program, I really appreciate the opportunity to speak to you today about the importance of continuing down half that were currently on with regards to NC fast. We have five programs that are currently implemented in NC fast and appreciate your support to get the low income GS systems programs and child care program integrated into NC fast and would appreciate your support to allow us to continue down that path for child welfare. All three of our federal partners have signed off on the path that we are on including the administration for children and families and they have been participating in the course in order to support the path that we are currently on for this integrated system we have spent a lot of time since January with our county departments and social services, specifically our child welfare staff, in order to assure that the

requirements are where they are, and need to be for a successful implementation of child welfare in to NC FAST. If we were to change course of action at this point in time, we would be abandoning our course that we're currently on for that integrated system, and I'd like to point out to the committee that about 80% of the families that we touch in our child welfare services in some way or another, intersect in those means tested programs that are already currently housed in NC FAST such as Medicaid, and food nutrition services, and our workforce programs, and I'd be glad to answer any questions that you have about NC FAST and the direction that we're headed in. Anyone have any questions or comments for Feury  I would like to. Representative Thank you Mr. Chairman. To thank you all for your work doing that and appreciate this explanation of how important it is to continue that path, and if I could, I just also would like to thank the chairs and the staff for this really good report, and I can actually understand it and I'll be in touch with questions. Thank you. Mr. Chair? Representative One thing I have spoken with Mr. Shola earlier today, what I'd like to see is another spent cost allocation done as we move forward or even though the case management system isn't in place or whatever a lot of work, will feed into that and it gets it's share. I'd like if I could get those numbers, because if we change direction one of the things we have to weigh is, what have we already spent, what will we have to spend, and then justify what improvement or better course or whatever would be worth changing the course in the middle of the stream so to speak thank you, and we'll be glad to supply those stickers as well as the additional time that would be needed if we were to separate child welfare from the current path because we would have to be on planning from the beginning. I think you've done a great job Dobs here, no question. Thank you. Anyone else? And medicaid directly do you have anything? We want to commence tomorrow. Thank you. If not, this meeting stands adjourned. Thank you.