NC Senate’s “mini budget” would fund Healthy Opportunities Pilot

By Grace Vitaglione 

North Carolina senators slipped the language for a “mini” state budget into a bill passed by the N.C. House of Representatives that was formerly about designating the state star. Completely revamped, House Bill 125 now funds certain state operations until lawmakers can agree on a full budget. 

The state Senate passed the mini budget on June 24 and sent it to the House of Representatives for their consideration. House Speaker Destin Hall (R-Granite Falls) said the House will not concur with the bill.

It’s looking more likely that state lawmakers will leave Raleigh without passing a budget before the new fiscal year starts on July 1. Sticking points have been the two chambers’ different approaches to taxes, along with differences on how to fund a new children’s hospital to be built in the Triangle, among other issues. 

The Senate’s new, more narrow proposed budget has some marked changes for the N.C. Department of Health and Human Services — especially for the Medicaid program, which provides health care services for more than 3 million low-income North Carolinians. 

The mini budget would direct $30 million in funding to the Healthy Opportunities Pilot, a Medicaid program that tackles nonmedical health needs of low-income North Carolinians. This money would keep the program afloat for part of the year, according to Sen. Michael Lee (R-Wilmington). The measure is a far cry from previous proposals to cut funding entirely, which sparked an outcry from advocates.

As a result of those earlier proposals, DHHS had announced the Healthy Opportunities Pilot would cease operations July 1. If the Senate’s mini budget passes both chambers and becomes law, that may no longer happen.

Sen. Jim Burgin (R-Angier) said he “would hate” for the pilots to stop before they’re done and can report to the legislature on their results. Hearing the stories of people who had benefited from the pilots was impactful for lawmakers, he said.

“We’re doing a lot of bills to try to drive health care costs down,” Burgin said. “We don’t need to start withholding services that look like they’re working.”

A review of the Healthy Opportunities Pilot had shown that it was saving as much as $1,020 each year for each Medicaid beneficiary who’s participating in the pilot — largely by helping people stay healthy. That’s because program participants were prevented from becoming sicker or from using more expensive kinds of care. 

The proposed plan would also fund the Medicaid rebase, fluctuating annual costs for the program, at a level much closer to what DHHS asked for — $640 million each year for the next two fiscal years instead of the previously proposed $500 million. The budget presented earlier this spring by Gov. Josh Stein funded that rebase to the tune of $700 million.

Other Medicaid changes

The mini budget would also cut fewer state dollars than previously proposed for the state-authorized regional mental health services management organizations, known as LME-MCOs — only a $14 million cut. That’s compared to a $20 million proposed cut in the House of Representatives’ proposed budget and $30 million cut initially proposed by the Senate.

LME-MCOs use these funds for services to help uninsured and underinsured people with mental health, substance use and intellectual and developmental disabilities, among other needs, according to DHHS. The funds also support mental health crisis services for people who can’t pay for care.

Those cuts would be swapped out with funds received by the state from the national settlement against drugmakers for their alleged role in facilitating the nation’s opioid overdose crisis. But, a DHHS spokesperson said, those aren’t equal replacements. She explained that, by the terms of the settlement signed by North Carolina, opioid settlement dollars must be used for specific projects to combat the opioid epidemic, whereas single stream funds are supposed to be flexible for LME-MCOs to use as needed.

To administer the state’s Medicaid managed care program, the mini budget would allot funding at the same levels proposed by the Senate in the proposed full state budget — $49 million recurring and $34 million nonrecurring.

A spokesperson for NC DHHS said the department “appreciates the Senate’s recognition of some critical and time sensitive funding needs with its recent budget proposal.”

Some cuts proposed

The Senate’s mini budget does reduce some funding compared with its earlier proposal. It would give about $6 million less over the next two years to the Partnership and Technology Hub, or PATH NC. This software is designed to assess and track children monitored by the state’s child welfare system.

The plan also proposes allocating about $6 million less each year to fund statewide operations and maintenance of the Transitions to Community Living Initiative, which would move people with mental health and developmental disabilities from institutional living situations into the community with support services. 

This spending was mandated by a 2012 settlement with the federal Department of Justice after North Carolina was found to be in violation of the Americans with Disabilities Act, which requires states to provide these community supports. 

A little over $84,000 of that money would go to funding a one full-time Olmstead associate director position within the Division of Central Management and Support in DHHS.

The N.C. House of Representatives could vote to not concur with the Senate’s mini budget — which seems likely — and leave the state without a budget at all for the foreseeable future. But a provision slipped into the 2018 budget bill calls for an automatic “continuing resolution,” which allows spending to continue at the prior year’s levels while there’s no official state spending plan. 

Other provisions in the mini budget:

• Establishes a Rural Residency Medical Education and Training Fund to support training and residency programs in the UNC system.
• Allots $1 million to DHHS to purchase 8-milligram intranasal naloxone, a drug that can reverse an opioid overdose.