NCGA House Budget Legislative Update

Today, May 1, the House Appropriations Committee will take up the House budget bill, H966.

In relation to the 2019 session North Carolina Providers Council legislative priorities, here are the bill’s highlights:

  • Avoid Additional Cuts to Single Stream Funding
    • Perpetuates the recurring 2017 Single Stream Funding cuts to the LME/MCOs.
    • Authorizes a maximum $30M transfer (to offset the funding reduction) from DHB to DMH/DD/SAS in each fiscal year of the biennium only if there is a Medicaid and NC Health Choice budget surplus as certified by the Office of State Budget and Management.
  • Group Home Sustainable Funding
    • A provision on stabilization and transition, previously filed as free-standing bill H990, appropriates $23M in only the second year of the biennium for sustaining group home funding
      • Requires enhanced LME/MCO use of Medicaid-funded, in-lieu-of services and facilitating the filling of vacant beds with eligible individuals.
      • Requires development of an actuarially sound, needs-based rate methodology for sustainability.
      • Payments exclude individuals living in group homes who are already supported by Innovations Waiver funding.
    • An additional provision on supplemental short-term assistance appropriates $8M for only the first year of the biennium (July 1 2019 – June 30 ,2020).
      • Authorizes monthly payments (capped at $464.30) to group homes on behalf of eligible residents (primarily legacy residents who have “continuously resided in a group home since December 31, 2012.”).
      • The monthly payments will terminate on June 30, 2020 or earlier if the appropriated funds are depleted prior to that date
  • Direct Support Professional Wage Increases
    • Authorizes and appropriates funding for DSP wage increases with increased capitation payments from DHHS to LME/MCOs and then to provider agencies.  Requires provider agency attestation regarding increased wage payments after receipt of additional payment from LME/MCOs.
    • The specific wage increase amount is “to align the wages paid to these direct support personnel with the current wages paid to State employees in State-owned developmental centers.”
    • Only group home DSP wages are eligible; excludes Innovations Waiver DSP wages. However, adjusted group home resident rate methodologies must be “comparable to” Innovations Waiver rate methodologies.
    • Requires an actuarial study of the average cost of Innovations Waiver slot services and labor, indirect, and administrative costs, with the goal of yielding recommendations for a budget appropriation that would address “the total cost to increase the wages of direct support personnel providing services through the Innovations Waiver to a minimum of fifteen dollars ($15.00) per hour, or the current wage paid to State employees working in State-operated developmental centers.”
  • Increase Innovations Waiver Reimbursement Rates
    • See above; the actuarial study results will include recommendations regarding resources needed to sustain the addition of Innovations Waiver slots beyond the 2020-2021 biennium.
  • Increase Innovations Waiver Slots
    • Authorizes 150 additional slots total in the biennium, beginning March 1, 2020.
  • Developmental Day Center Funding for 0 – 3 and 0 -5 pre-K special instruction
    • Sets forth pre-K program standards for rated facilities, and notes that the State may use developmental disabilities or chronic health issues when considering a child’s eligibility for a program.  Other eligibility criteria include household income and military status.
    • Authorizes a school safety grants program to be administered with local public schools by entities including, but not limited to, LME/MCOs.   Requires the Department of Public Instruction to provide grants to public schools for training and expanded services for therapeutic foster care families and licensed child placement agencies that provide services to students who need support to manage their health, welfare, and safety and have developmental delays.
    • Authorizes child care subsidies for non-citizen families who legally reside in NC when a child is developmentally delayed or at risk of being developmentally delayed.
    • The budget bill contains additional grant and scholarship provisions for this target population. Please see the link above to access the entire bill.
  • Actuarially Sound Reimbursement Rates to the LME/MCOs after Standard Benefit Plan go-live and for Tailored Plan contracts
    • This budget bill does not contain any amendments to Section 1 of Session Law 2018-48 [Medicaid Transformation] language which reads, “The Division of Health Benefits shall negotiate actuarially sound capitation rates directly with the LME/MCOs based on the change in composition of the population being served by the LME/MCOs.”

Additional General Assembly Updates

Governor Cooper Nominates Sen. McKissick for the Utilities Commission

Sen. Floyd McKissick, D-Durham, could soon be leaving the Senate after Gov. Roy Cooper nominated him to serve on the Utilities Commission. McKissick was one of three nominees to the commission announced during Tuesday’s House session; if confirmed by the legislature, he would replace Commissioner James Patterson, a Gov. Pat McCrory appointee whose term expires June 30.

 H536 Update:  Alcohol Deregulation

A wide-ranging alcohol deregulation bill cleared the House ABC Committee on Tuesday despite efforts by one Republican to delete the measure’s most controversial provisions. House Bill 536 would allow bar customers to order up to four drinks at once, allow liquor stores to open on Sunday afternoons, lift the five-bottle cap on on-site liquor sales at craft distilleries, and allow beer and wine on the new Ocracoke Island passenger ferry.

Most of the provisions were requested by industry groups, according to the bill’s sponsor, Rep. Chuck McGrady, R-Henderson. “In an effort to not have 17 different bills, what we did as (committee) chairs was pull them together in one omnibus bill,” he said. But the measure faced opposition from social conservatives. Rev. Mark Creech of the Christian Action League said lawmakers are giving in to the influence of “Big Al(cohol)” without considering public health consequences. And Rep. Pat Hurley, R-Randolph, repeatedly tried unsuccessfully to remove sections of the bill through amendments.

Hurley objected to the ferry provision, which failed to become law last session. The latest proposal would only allow alcohol sales on the trip from Hatteras to Ocracoke, with no alcohol allowed on the return trip, when many passengers would likely be driving afterwards. A representative from the N.C. Department of Transportation said the goal is to add revenue to make the passenger ferry service more financially sustainable. But Hurley noted that some Ocracoke visitors drive golf carts on the island. “Something about transportation and alcohol, I don’t think they mix too well,” she said.

She also opposed the provision allowing four drinks at once, saying it would “allow people to drink four drinks at closing time so they can guzzle them, get into their cars and drive off.” Restaurants and bars say current law makes it too difficult for someone to order a round of drinks for their group because each person must currently approach the bar individually. Ultimately, Hurley was successful in amending out one provision, which would have tweaked laws governing strip clubs and other adult entertainment venues that serve alcohol. McGrady said that provision had encountered concerns from lawyers.

Supporters of the distillery provisions hailed the changes as a major boost to craft distilleries. “We need to unleash it just like we did with our wineries,” said House Majority Leader John Bell, R-Wayne. “Look at what the breweries have done for downtowns all across our state. This is an actual jobs bill, don’t look at it as an alcohol bill.” In addition to allowing distillers to sell an unlimited amount of their product to visitors (instead of a five bottle per year cap, with a tour required first), the bill would allow for tastings in ABC stores, and it would allow distilleries to ship their product directly to customers in other states where such shipments are allowed. Hurley, however, said the changes would damage the current ABC system, which she argues is working effectively. The bill now goes to the House Finance Committee. (Colin Campbell, THE INSIDER, 5/01/19)