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House | July 2, 2015 | Committee Room | Appropriations: Health and Human Services

Full MP3 Audio File

Alright. First things first. Would somebody like to give me an agenda? Thank you. Alright. first lets do some introductions. We have some pages today. From Wake County Kate Russel. Sponsors Rep. Gary Pendleton. Brandon Ferris from Gaston County is Kelly Hastings. Rep. Hastings. Tre Jones, Columbus County. Rep. Jamie Bowles, now tell me if I'm doing well on this one. Jack Kerhean[sp?], Randolph County from Rep. Hurley. How'd I do? good. Perfect. Meredith Levy. Gaston County. Rep. Bumgardner is the sponsor. And Emily Perry from Pasquotank. Bob Steinburg. Rep. Steinburg. And our Sergeant-at-Arms today are Young Bey, Doe Morris, Jim and Cory Bryson. Now our first order of business is to continue our discussion from yesterday on HP97 you guys have anything more to speak on? Or we just can go ahead and ask any more questions that anybody has? you have questions later now might be the time if anybody have any questions why do we go ahead will skip to a public comment since we have so much time I will give we just go ahead and extend it for three minutes and see where we go with this. First up is Miss Leza Wainwright. Thank you Mr chairman and members of the committee, my name is Leza Wainwright, I'm the Chief Executive Officer of Trillium Health Resources, which is two day old LME-MCO formed by the consolidation of Coastal Care, and its Carolina behavior of health. The senate budget provision to utilize the LME-MCOs cash reserves to supplant state funding for behavioral health services fails to recognize the the different functions of the LME-MCO. We manage federal state and local funds, and these funds have different purposes, as well as different rules that govern their use. One of our most basic functions for our funding sources, is to pay providers for medically necessary services delivered to consumers in a prompt manner. Senate 208 which was enacted by this General Assembly in the 2013 session requires that we pay all proper claims submitted by providers within 30 days. To meet those requirements we must have adequate cash reserves. Trillium Health Resources, my organization has a total budget of  $428 million. Just to have 60 days worth of cash on hand, which most business experts tell you is not adequate, requires $71 million. I understand that  sounds like a lot of money, but that is the amount of money required just to pay two months worth of bills. Medicaid funding for behavioral health services are delivered under an agreement between the state and the centers for Medicare and Medicaid services through the 1915BC waiver. The state is contracting with LME-MCOs to operate that way we're on an at risk basis. Action taken by the General Assembly to direct the use of Medicaid funding must be consistent not only with state law, but also with federal regulations, CMS regulations and guidelines, and the terms of the waiver or in the state contract with the LME-MCOs. The senate provision is inconsistent with both the waiver and the contract. It presumes funds were available to supplement state services when dollars are already encumbered. The other thing that's critically important to recognize is that on any given day for Trillium we have about $20 million worth of claims that we owe providers for services that they have delivered but not yet billed. If we would cease operations today that $20 million would be owed to providers. And finally one of the promises of the waiver in the public sector was that we could reinvest funds to address critically needed services and I'll mention just three that my organization is working on. One is replication of the

Healing Place of Wake County to address the needs of the adults substance abuse population child first and the evidence based model out of Connecticut to address needs of early childhood trauma, and then intellectual developmental disability services. This excess of the LME MCOs depends upon the control of the money, and having the reserves is the only way to ensure that we can produce the continued savings that this model has enabled the general assembly to enjoy. Thank you sir Thank you mam. Mitchelle [xx]? good morning, thank you Chairman Maloon, and members of the committee for this opportunity to speak with you. I'm Mitchell Rivers and I'm the executive director of the North Carolina Child Care Coalition. The coalition state wide association that has been dedicated to promoting high quality [xx] care and education since 1990. I'm here today to publicly thank the house for its work to build a very positive strong budget for early education. High quality early education is a solid investment for North Carolina, with quality, early child development experiences, children are school ready, graduate from high school, and grow into productive citizens and valuable employees. We think that the house budget, for early education does what is needed to ensure that North Carolina's early education system continues to be a national model, a leader that produces results for young children and families advance us to state's future prosperity. I want to specially focus on what the house budget contribute to early education, first it provides level funding for North North Carolina's early education systems, and it's three signature programs, Smart star, NCPK, and [xx] Subsidies. These three programs are evidence based, produced solid results and served over 200, 000 children each year. In addition the house provides 5 million, in continuation funding for NCPK program, this expands services to 520 children last year, it also provides a minimal salary raised for the teachers the first in many years. Third, the house budget strengthens child care subsidy policies for eligble low income children and their working parents, who pay a portion of their child care class. Child care subsidies are in reality, we think opportunity scholarships that open the door for early learning and disadvantaged children, and support the efforts of low income working parents to earn more and become self sufficient you've got three proposals, three provisions that we hope you'll continue to keep in the budget, one restores the family income unit definition for better allow grandparents to continue to care for their children, a second allows parents to pay only a part time [xx] pay fee for part time care, this is the same as any private pay parent would be able to do, and the third restores income eligibility for children 0-8 two third grade, this is particularly important because it makes sure that those children have early learning opportunities for an after school, so they'll be successful in school, and show greater third grade reading proficiency in mass course which we'd all like to see and then last, I'd like to thank the house for creating a study committee for a study committee to examine the purpose and effectiveness of early patient and family support programs, and some opportunities perhaps to streamlining administration across programs, the kind of approach that can lead to strengthening and improving our early education system, and accelerating it's effectiveness in the years ahead. So in behalf of a thousands of children across North Carolina that our coalition serves, I want to thank you on their behalf, and urge you to stay strong during the budget negotiation process thank you so much. Thank you, next up Mary Hopper and on deck Rob Tomson Good morning Mr. Chair and thank you for giving me this opportunity to speak. My name is Mary Hopper, I'm the Executive Director of the North Carolina Council of Community Programs representing the LME MCO's and on behave of the LME MCO's I want to underscore some of the comments that my colleague Lisa Wayne Right from Trillion Health Resources made. We support the continued operation of the BC waivers as directed in house bill 372 and we oppose the senate budget bill version which will cripple the ability of the LME MCO's to maintain adequate and responsive provider networks to respond to local needs, fill service gaps, negotiate and adjust rates manage utilization, prioritize outcomes and leverage public dollars. We oppose the $186 million per dollar per year fund reduction provision in the senate budget. The intent of the Medicaid fund balance is to

have dollars available to build the systems. The elemy[sp?] MCO's' as fully capitated at risk public operations have been successful in saving the state millions of dollars and this specialty operation must be supported to continue. All at risk MCO's are given the authority to reinvest to save dollars. When elemy[sp?] MCO's generate Medicaid savings in their at risk contracts the waiver and CMS guidance make clear that Medicaid savings belong to the elemy[sp?] MCO. While commercial MCO's make this profits for their share holders, this dollars are being used by elemy[sp?] MCO's for services to build and staff crisis units as infrastructure for integrated health care initiatives to expand hospital transitional teams and much more. The members of this committee another hand out identifying and giving a snap shot example of some of the use of the many millions of dollars that the elemy MCO's that are already reinvesting into services locally the started a new some fund balance a complex issue from both illegal and financial stand point we feel that compliance with the senate provisions vision is more or less impossible and likely to result in serious service reduction for vulnerable population we ask you to look very carefully where this provisions. Thirdly we oppose to the 2% medicate risk reserve card beginning in 2016, the requirement for the amount equals to percent of the ALMCO annual medicate operating budget is written into the 1915 BC we have the agreement between the state of North Carolina and the federal center for medicate and medicate services it's requirement of the CMS and more likely required amending the waiver CMS correctly holds the state to many rules and requirements and the state then contracts and hold the [xx] MCOs to these requirements. A simple statement of cash available does not reflect the financial requirements passed down from CMS to the state, to the LME-MCOs. If the goal for the LME-MCOs to take on this risk reserve and to remain viable, a planful process must occur that does not compromise contractual agreements with CMS, or destabilize our service system, thank you. Thank you madam. Mr. Thompson, you're up, and Richard Blackburn, you're under extra. Mr. Chairman, members of the committee, thank you for the opportunity to speak today. My name is Rob Thompson, I'm the Policy Director at NC Child, it's a statewide child advocacy organization dedicated to promoting public policy that benefits children and families in North Carolina. We do have a broad set of recommendations for the health and humans services budget and items in contention, I'm going to limit my comments right now to just two items, and that's childcare subsidies which you heard Miss Revist[sp?] just talked about, and also the issue of foster care. First we appreciate the Houses's leadership in restoring eligibility for child care subsidy in grades K33 and in reinstating the prorated parental fee. Two weeks ago, NC Child released a report showing a county by county impact of last years decision to limit eligibility, and what we see is that statewide over 6000 children have lost or will lose their childcare subsidy and in Wake County alone, over 450 children have lost or will lose their subsidy. The provisions included in the house version of the budget will restore access to child care for thousand of willing [xx] children which is critical for the academic success and despite the house leadership on this issue the senate chose not to include either of this policy revisions on its budget. So we support the house proposals to ensure our children have access to important learning opportunities. Second, we appreciate the willingness of the house and the senate to extend the age of foster care beyond 18. Outcomes for children exiting foster care are unacceptably poor and providing them with the continued support of the foster care system should assist their transition into adulthood. The senate has proposed increasing the age of foster to 21 and we hope the house will consider following suit to give these children and youth the best chance at a successful life. later today I'll send a complete list of our health and human service human recommendation along with a district specific profile of child well-being so you all can locally how children are doing in your districts. And we certainly hope we can be of assistance in terms of providing data as you move forward in the process, thank you. Thank you sir. Mr. Blackburn, Mr. McNeill and [xx] you're up next. Good morning Mr. Chairman and members

of the house committee, my name is Richard Blackburn. I'm the vice president of diagnostic and support services Caramount health in Gastonian, glad to see some young leaders in Gaston county here as pages care [xx] independent nonprofit 435 bed hospital system serving a population of approximately 200, 000 residents in Gaston county, I'm here today to speak on the proposal from the senate to completely repeal our state certificate of need law as an administrator I have seen first hand how C. O. N has worked to protect the delicate health care ecosystem while the C. O. N process is far from a perfect system, the system still accomplishes the ultimate goal keeping our communities protected from increased health care costs by controlling and regulating utilization and distribution of services in its current state the C. O. N processes promoted fair competition in an unfair environment as you know we mistreat all who come through our doors due to an unfunded mandate from the federal government known as [xx] Because of this our supply demand model is not like any other business. And we must make up for the cost of treating the uninsured to other avenues such as imaging and outpatient services. The estimated cost to our system at Karma should C. O. N go away is the equivalent of approximately $17 million. This would translate to a significant caller shift to our patients, compounded by the transformation we are undertaking as the Affordable Care Act is implemented and the proposals in the Senate budget regarding our non-profit tax exemption, quite frankly. Our mission at Karma is under attack. Should C. O. N go away completely or allow for certain services to be seen as different it will simply drive costs up for everyone, especially those who are privately insured. Commercial surgery centres only profit their investors while non-profit hospital outpatient surgeries support vital services to the community. that quite frankly would become less accessible in a paused[sp?] C. O. N system. The risk this legislation pauses is immense and would change drastically what services are available. It threatens most of all our rural and independent hospitals all that leaves us vulnerable to large cooperate take overs reduction in services and even closing our doors our prescriptive is an independent [xx] hospital health care system is different there are only a several numbers but remaining here in the state less than 15 its and we need to remain independent thank you, thank you sir Miss Romero, Miss Mary Grapft you are up next. Thank you Mr. Chairman and members of the community my name is John McMillan I represent Pharma pharmaceuticals research and manufactures of America my comments relates to items 92 and 93 on page 27 of the compulsion law report, these two item appear in the senate budget and not in the House budget. The two provisions would seek to extend 340 B pricing to the medicaid program. 340 B refers to section 340 B of the federal public health service act of 1992.340 B was established to promote prescription access for the disadvantaged patient population. It requires drug manufactures to extend discounts on many drugs to certain categories of health care providers referred to as covered entities. Neither pharmacy nor specialty pharmacies are covered entities under 340 B and so they don't qualify for the 340B pricing discounts. Even if they did, federal law prohibits rebates on 340B price drugs. You can't get both 340B prices and rebates. So the state would likely lose the rebate dollar if they were successful in implementing the 340B pricing. 340B is under review in Congress because of it's misuse and a realignment of the program is expected. This would be an expensive with proposition to implement.

The provision itself says most of the savings in the first year would go to reprogram the NCTracks program and so that money would be wasted. We urge you not to accept these Senate provisions. Thank you. Thank you, sir. Ms. Mary Graft. Up next is Louise Fisher. Mr. Chairman and members of the committee, thank you for allowing me to address you today. My name is Mary Graft and I'm the Presiden-elect of the North Carolina Nurses Association, NCNA commences committee for recognizing the importance of addressing North Carolina Infant Mortality Rate and proposed funding for evidence space programs to help provide the best care for this population we sue the housing senate budget both maintain current funding for school nurses however we uncured the general assembly to study the current funding formular as outlined in senate bill 641 and house bill 701 since many schools for has limited coverage by qualified providers. Finally, with large amount of proposed health care policy to in the senate budget particularly in the area of medicaid reform we urge the members of this committee and all those involved in the state budget to consider the law that advanced practice registered nurses play in addressing many girls have increasing access to the highest quality of care for a lower cost. We have a serious and glowing access problem in North Carolina. 41 counties are full or partial primary healthcare provider shortage areas and 31 counties have no practicing OBGYNs. We have thousands of advanced practice nurses across the state with the training and the education to help fill these needs. APRNs provide excellent primary care. A successful Medicaid reform plan must utilize all qualified providers working to the full extent of their education and training, unencumbered by outdated were unnecessary regulations, multiple studies have demonstrated that potential cause savings that can be realized from hundreds of millions to billions of dollars annually we urge this committee  to consider these issues as the final budget and medicate reform plan are corrupted. Thank you very much Thank you madam. Ms. Fisher. On Ms Meyer, Carol Meyer. Thank you for the opportunity to speak for the mentally ill of North Carolina I have been and have a good volunteer for over 30 years. North Carolina greatest need is to promote state's hospital bed not more contract reach in local hospital. Such hospitals care for the sickest and possibly the most dangerous whereas the local hospital do not take the sickest nor are they equipped to do so, [xx] hospital have to control the [xx] for 17 days, it took 17 days to find one in Tibet[sp?] [xx] hospital the patient attacked seven workers and nearly tore off the outlay of security car and Rex almost lost their federal funding because they had to restrain him, and North Carolina mum was trying to get help for her son who wanted to kill himself, as well as others. The response she got was, I have no where to send him besides there are 43 people waiting ahead of him. If you tell anybody I told you that I will loose my job I was a mental health worker, state hospitals were given how did we come to this situation, state hospitals were given Quotas and Deadlines for getting rid of patients, and to downsize and close some. They falsely claim that Home State Decision required all institutions be closed especially state hospitals. Patients were sent to shelters streets unknowns et cetera open by bus or van, and sometimes at night for [xx] for them. Most patients did not get any of the promised services of the reform, some are still missing.

North Carolina pays contracted hospitals $750 per bed per day, whether the bed is used or not. That's $278, 750 per year for every 365 days, beds are unoccupied. I've seen new monies in the past budgeted for local hospitals when there was already a surplus because the money had not been claimed someone  needs to demand that DHHS and workers provide trues information, unless we'll never know what's going on out there when the rubber meets the road crossing over the lack of services in North Carolina for the mentality ill should not be allowed and reflects, not only on you, but in all of us. To add more local bids does not address the critical need. Private psychiatric hospitals won't always take [xx] lack of hospital beds for severe and [xx] patients is a life or death matter and must be addressed. thank you. Thank you madam. Ms Meyer[sp?] Good morning Mr. Chairman and members of the committee. My name is Carol Meyer[sp?] and I'm the CEO of the Carolina Center Hospice and End of Life Care, thank you for the opportunity to share our concerns about the proposed repeal of stratified of needs in the Senate budget Hospice's budget falls under C. O. N. Our association is opposed to the repel of C. O. N for Hospice. Advocates for the repel of C. O. N argue that it will result in increased competition and Increased costs. We disagree with this assessment, because hospice providers are typically paid a per diem for their services that is a capitated payment, the cost for providing services won't decrease. North Carolina's hospices are experiencing healthy competition and patients have choices of providers, everyone of the states 100 counties has at least two hospice providers that provides services to them. Here are some other key points that highlight the effectiveness of North Carolina certificate of need, it promote access to care where is needed, through the state annual planning process CON provides a rational approach to ensuring hospice services are available where they are needed in all areas of the state and North Carolina provide a petition process for special need determinations that allow for new entrance to the market. CON also promote quality of care, it provide formal mechanism in quality check on those entering the market requiring. to each to offer thoughtful justification for why they are entering that market, and over abundance of hospice can lead to expensive service areas that effect the quality of care delivered. The Carolina center work in both Carolina's, where North Carolina has CON and South Carolina has limited CON, it only apply to hospice and patient facilities. One important metric for CMS is tracking over payments to hospice programs to have an annual aggregate cap on what they can build for patients. The over payments typically result from long lane of staying hospice of the state in our 16 state medicare region, 6 state have CON ten states are non-CON. The highest the provider over payments are as much as two times as high in the non-CON states, and by comparison hospices in North Carolina falling to the over payment group is only 3%, in South Carolina it's 30%. Related to this the average total cost for patient receiving hospital services is higher in South Carolina, over $12, 000 per patient in North Carolina it's under 10. We urge you to hold firm in upholding provisions of North Carolina's certificate of need law, North Carolina enjoys a leadership position for hospice in the US, and we believe certificate of need is an important part of maintaining that position thank you. Thank you maam, Coudy Hand you're up sir Mr Nash, John Nash you are on [xx] Thank you Mr Chair good morning members of the committee my name is Coty Hieve[sp?] from North Carolina Hospital Association, I wanted to first thank you for giving us an opportunity to speak about the senate's budget I believe this is the first time we've been asked to make a public comment since the document went public, and so

I do appreciate that I wanted to talk not specifics about the provisions because anyone of these provisions that affect hospitals would have caused us concern, but having all of them lumped into one document, into one budget proposal doesn't just cause me concern, it really worries me about the future of hospitals and healthcare in the State of North Carolina. You've heard many provider groups today talk about their concerns with Medicaid reform, the proposal on the senate budget with a CON repeal that the senate put in the budget, and you know we've got other issues including the elimination of the graduate medical education add on, and the sales tax refund cap. All of these provisions will cause harm to our hospitals. We are just now figuring out how to accommodate the over $700 million annual cut given to us by the Obamacare. We're going to have to, if the senate budget were to go into effect, we would have to add on to that $700 million another $1.2 billion of annual cuts to hospitals alone. We're at the point where can't pass those onto the patients, they're paying as much as they can and we're trying to reduce their cost as it is. So what we're trying to figure out is what we do to absord now almost $2 billion of annual cuts if the senate budget were to go into effect, and the only way that we can think about doing that is when we have to eliminate services and that's one of the largest employers in the state, when you eliminate the service you eliminate a lot of high paying jobs, and so I want to thank this house for a budget that allowed us to continue this work we are doing and I want to really caution you about considering the provisions put in by the senate because again it will cost us over $2 billion at the end of the day because of all the cuts that we will have to absorb, did want to specifically remind you that on medicaid reform a bunch of medicaid provider group came together and presented a plain to this general assembly not just once but several times and the house passed a medicaid reform plan that was very close to what we as providers presented to the general assembly while the senate tended to ignore that in their proposal so I just wanted to remind every body that your provider community has come together to do that, and we urge you to continue down the path that the house chose to take in your budget and reject most all of this senate provisions at least in the health care portion of the budget Thank you. Thank you sir Mr. Nash, Day Richards you are up next Mr. Chair man and members of committee, may name is John Nash, I'm the executive director of the Ark of north Carolina, the ark of north Carolina would like to express our appreciation to the chair and members of this committee for the opportunity to provide public comment on the budget. We were very encouraged to the both the house and senate budget protected all optional services under medicaid where people with intellectual development disabilities. Also it's greatly appreciated that no medicate rate reduction were included in either budget. For providers of IDD services who have endured multiple changes over the past few years, who've experienced significant rate cuts providing stability as we look to medicate reform is critical. There are items in both budgets we feel they are very important to people with IDD and we will hope that going forward this will be on the forefront of your discussions. The house budget includes funding and special provision for a targeted case management pilot program for people with with IDD who are on the elevation Weber wedding list. Target case management is a critical support services with people with IDD and as we look toward an in grade health care system we need to have case managers who have skills for managing both health care and rehabilitative services which are needed by his population the senate budget proposes an increase in funding for closely programs this funding provides individuals with id critical services including residential living day services supported employment and family support services. This services are the only services available to people without the anabation weaver and this increases a great need and we extend our thanks to both chambers who recognize the need to expend start crises services for adopting children with id although we do feel that house appropriation with more flexible language would best address the need for critical crises this community. Finally we are deeply concerned about the ongoing funding crises facing group homes, we received reports just this week about closures due to the lack of stable funding this adds to the frequent concerns expressed to me by group home operators residents who live in those group homes, their family and friends about their fears of an unstable and an unpredictable future. Again, the Ark appreciates and welcomes the opportunity to continue the dialogue with leaders in both the House and Senate on how to best provide support services and opportunities, and how to address the many issues facing people with intellectual and developmental disabilities and their families. Thank you. Thank you sir. Mr. Richard, Miss Taylor you're next. Mr. Chairman, members of the committee, my name is Dave Richard.

I'm the Deputy Secretary for Medical Assistance at DHHS, and like everybody else we want to thank you for the opportunity to speak today and the chance to have a hearing on the budget proposals. When we look at how both the House and Senate look at the Medicaid Program we see two seriously divergent paths. One, the House proposal that is consistent with what Governor McCrory proposed is one that is measured takes in case the priorities of Medicaid reform to do that on a path that is well thought out, that relies upon the provider community, the recommendations that we've made, builds upon the things that work in North Carolina including our CCNC Network, our LME MCO System, the high quality provider system that we have and the medical professionals and hospitals across the State. Its a measured approach that leaves the Department of Health and Human Services to continue its work with you, to improve the operations of our Medicaid program, one that we know continues to improve every day because of the working relationship that we've had with you going forward. The Senate Proposal obviously significantly is different than that. It is a proposal that is massive in terms of its change to the Medicaid program, you've heard many of the speakers today bring those up, we mentioned a few, it eliminates the CCNC program after six months, by December something that is working in North Carolina, proven to save money, it seriously changes in challenges and [xx] system one that is new, and growing and is a fully capitated manage care system, but it changes it so rapidly that we're not sure it will survive as we go forward. It's seriously insignificantly different approach to medicaid reform, we think that, that approach is not consistent with what the governor and house members have said which is provide a land and one that continues to build upon everything else that we have. It also takes the medicaid program out of DHSS and puts it under a health authority board which then reduces our ability, one to work with you directly as the members of the general assembly, secondly to continue the good work that we've done and integrate in our medicaid program with our other service divisions inside of DHHS. Medicaid is a big program, it's one that relies upon the expertise of all the folks in DHHS and to separate that out with clearly cause significant challenges and finally it moves the duty sayings in such a rapid fashion that we're convinced that it will seriously disrupt services as we try to make those changes. So we encourage you to continue on the path that you started, we believe it's the right path and we thank you for your support at the department and the work that we've done together and look forward in working with you to implement serious medicare reforms, thank you. Thank you sir, Miss Taylor and this one has already spoken so Zack Register will be next Hi! Thank you to the chair and the committee for allowing me to speak today I'm Angelo Taylor, I am the director of NT funds for the department of health and human services, first I want to thank the house for your support of an integrated case management solution to support our 100 counties as well as the state, it is important that we continue to move forward with what you all had proposed our concern is with the senate bill which takes us in a totally different direction. That direction is going with a stand-alone separate system that does not truly integrate with the current NC first case management solution, that causes a a lot of concern not only at the state level but at a county level. We have been working with 100 counties since December of last year to look at the case management solution, compare that to the child welfare requirements. There are 5000 requirements that we have developed, and re -vetted since January of this year through May. We had over 100 participants from our counties working with us to vend those requirements to make sure that this is the solution we've been forward. They probably provided close to 5000 hours of work going in and looking at counties and how they're doing their processes. So the concern here is that not only will it impact our ability and forth, it would delay us at a minimum two and a half years, because if we move in a to tally different direction, then we have to start from the very beginning, which means payback to our federal partners that have already participated in the frame work for this case management solution,

that's close to one million, a little excess of $1 million, it also then having to repeat work that we've already done, we've already spent close to $56-57 million for global case management, that was the first project. What global means is that that allows us to leverage across all solutions and all programs, the information that is shared there. So I think and I employ that we already have close to 80% of the recipients that we would be tracking in child welfare already in the system, and we also, the other key thing is that, there is other services for aging and adult services that Without moving forward with the child welfare, 40% would be built through that child welfare that we would not be able to leverage as we move forward with the ageing adult services. So I thank you for your support and hope that we can move forward with this I think the majority over 100 support this effort and support what you have done, thank you. Thank you mum, Mr Registre, Miss Wilson you are next. Good morning thank you all for allowing us to speak my name is Jack Registre, I am the executive director of the National Alliance on mental illness in North Carolina. So first I'd like to say thank you for your dedication for the vulnerable population that we serve at army which are individuals and families living with chronic mental illness. We're greatly concerned about the current state of affairs, to me it's almost the best of times and the worst of times simultaneously, and it's the best of times that we've possibility to have a new North Carolina and a new dialogue about how we actually serve the chronic mental ill in our state. We have some phenomenal initiatives that have come out on the duke cell. No, while the duke cell in itself was a grave huge experience for our community, and it's something that we're still coping with. We'd like to see those funds actually go towards services, and some of the initiatives that the house has put forward, things like the world hospital bed initiative are great ideas. The concern that goes with that, going towards the worst of times is that without the infrastructure of the staff to go with those beds, we end up in a situation where we have beds, but we don't have folks who can actually serve folks in rural communities. We need to make sure that we're doing a comprehensive infrastructure sort of approach. The thing with nomes is that we believe in a robust array of services across the continuum, whether those services be institutionally oriented which for us is a last resort, or community based.community based services can look like everything from out patient group home funding, and so on, so that we have a consistency which is what our population needs the most. We're very, very concerned about the current speed which the senate budget proposes have changes, the changes to the LME system are detrominal I believe. To the stability that our folks need to be able to know. that the commitment of this state, which was started by [xx] Dicks[sp?] by the way, to actually have an array of services and know that the state will help take care of vulnerable populations. We actually gravely concerned that with the changes that are proposed in the senate budget for the LME System that stability will disappear. We'd like to see some conversation about how we can work on this together and [xx] stands ready to be of assistance. Thank you for your time. Thank you sir, [xx] Thank you Mr. Chairman, my name is Connie[sp?] Wilson and today I'm representing the North Carolina Orthopedic Association and the North Carolina Society of Eye Physicians and Surgeons or I wish they had a shorter name called the ophthalmologists but I have the orthopedic physicians and the ophthalmologists. I'm here today to recommend to this committee that they support some form of C. O. N reforms that is currently in the senate budget you have probably heard about what the senate budget does which is a full repeal and have seen when a [xx] facing and I can't tell you that I'm an expert on those different areas but I can tell you for our patients across the state. Ambulatory surgery and the diagnostics centres [xx] are very important in reducing costs and increasing accessibility I know you heard today, and probably heard for months and months, and we've been working on this for few years. So you have been probably hearing about it for year, then if you change anything on CON your hospitals are going out of business or they're going to have to raise costs, but on AFCs ambulatory surgery centers there are 24 states that already do not require a CON for [xx], and you know when you hear those states where all the hospitals are going went out of business and you're not seeing data coming in, proving that their cost are so much higher. So you've got 24 states on AFCs, now taking each on diagnostics centers and really the biggest is city scanner, we

are the only state in the country that requires a diagnosis six center ceiling, and so for our patients they have to go to other facilities that are either much more oral physicians have to kind of demiwag where they don't spend more than half a million in any one building, and patients have to move here and there to have their diagnosis services so basically what we are talking about is patient care and patient cost which from everything I have heard from this committee people one evidence base, they want services that can go to the patient example and so it from NCL our surgery centers $9700 and this for NCL  repair all this copy at a hospital the highest cost was almost $30, 000. A bunner enactement  Wake county 3600 at a surgery center, at a hospital on surgery center where they can charge higher you are looking at 13, 000, with both copies going up this is extremely important I will also tell you this will create jobs and this facility will pay taxes, so we appreciate your consideration of this we believe it helps grow our hospitals because gives them the flexibility to have ACs[sp?] the way they need to so there is not in our migration to the larger counties around them, thank you very much committee and Mr. Chairman. Bye Thank you mum, those who were done with the signup sheet was there anybody that did not get a chance to speak and wanted to alright I will take that as no so we are going to move to continue our discussion Representative Insko we've been waiting Thank you Mr. Chairman I can go through this document and ask a lot of questions but I actually I'm very concerned about the senate budget that would actually considered a document that you could use the bases for negotiations as I look at the entire document I find so many things that are troubling I will employ you not to go pretty of negotiations thinking that you have to have a 50% from each document because there are provision to the senate budget that needs to be excluded from the entire discussion and the change in the as MCO system the funding there is think is an example of that. I can go through that that we need to look at the other federal, all the state requirement for all the money spent we need to look at CMS regulations we need to look at the statutes that have guided us in our middle health reform that created this system that gave the mln union MCO flexibility with that money is statutory. Wasn't just an intent with an handshake, I'd know. I should remember that, I don't happen to know, I know that this worked very well, and I can imagine that we would make in the next year any major change in that system that would further hamper our ability to provide services for the LaMCoS and for mentality in the state, so I would like to just respond and a little bit more by saying, health and human services is a place where the market system doesn't, you can't apply the market system in every situation, in health and human services, the way an insurance company makes money, a health insurance company makes money is to sell policies to healthy people who pay their bill every month and never get sick, and that is the market how do you make money? And the market will drive any for profit company in that direction and that leaves the other people for the public sector to take care of, and that's what we're doing with this budget, or that's what we should be doing with this budget and I just comment on the last, if you do away with the CON and you put an advertorial care sitter, sure it's going to be cheaper for the patients who go there. They'll cherry pick the best patients and this is not universal I'm saying that these are maybe the Outliers but it will happen and I eventually think we can move towards changing our CON systems if we do it systematically and very carefully. But if you put in CT scanners in a local ambulatory care center, the incidence of filming exposing people to radiation goes up five times over what it would be if you went through the old system where everybody got their scans at a hospital system and the readings are done there.

There are plenty of studies that I can give you that show that that happens. It's going to be cheaper, yeah the physicians may part their money by billing insurance for extra scans and they take the best patients of course it's going to be cheaper for the patients. That is going to increase the cost to the hospital system that has to provide that service. I could make a lot more comments about that those kinds of examples. I think our group homes are problematic. The other comment I'd like to make is I don't know how you go into these negotiations. I don't know how you use your professional staff in fiscal research. I understand that both the House and the Senate will be depending on that staff for information. They are required to make every legislator look good. So I don't know how they will talk to the Senate side and give them information help them argue their case, and then talk to the House side give them information to argue their case. I think that that's a problem and I hope that you will be able to get independent information from a lot of people that will provide you with the information that you need to do the document and those are my concerns. So I wish you the best of luck and I would endorse the House budget to the extent that you can. I just assumed that you come out with 90% House budget and 10% Senate budget. Thank you, Rep. Insko agree with. Representative Pendleton. Mr. Chairman I've got two questions if it's OK, can I progress? You can ask one, no go right ahead. OK, can I address Representative Avila? You can address who ever you like. Alright. wanted to ask you we did a bill that's in Appropriations Committee and I don't know what happened to it but it was to appropriate $7 million a year for prevention of smoking, do you recall what may have happened to that? I'd get it for you but it was from the American Counselors Society.   [xx] can I that specific item I don't have it my finger tips if you give me bill number we'll look into it. OK. I want to talk on the same thing that representative Insko spoke on, hospitals are not equal in North Carolina. There are a number of hospitals that treat very, very few into the people, less than 1%, some of them none, and once it do trive[sp?] into the people, I don't even know how they stay in business, whether they're big or small I don't know how they stay in business . And doing away with CON is just another way to drive them out of business, so I feel very strongly about Thank you sir. Does anybody else have any questions? Give staff another opportunity to expound on anything if they have anything else to say. Mr. Chairman, if I could just take one more minute. You can take as many minutes as you like, go right ahead. Well the other thing I think that I didn't comment on is that is our early childhood care system. You know if you want to drive economic development If you want to increase the high school graduation rate, if you want to improve our health outcomes, if you want to have fewer people, if you want to have reduced crime rate. What you do is you make those kids successful, and you start at birth and you work with them, and you help them through you get them ready for education, and you make sure we've got an education system that will produce people who have a job, who can work and who can take care of themselves.education is the best prevention for all of our ills and it is the best early intervention, and we have got to put adequate money into that system or we're defeating ourselves. We're making irrational decisions that will hurt us in the future, so that's the other area where I would urge you to pay close Thank you madam. Ladies and gentlemen this concludes our today, I thank all of you who came out to speak thank you the staff for the great work, I move to adjourn.