Photo credit: Philo Nordlund, flickr creative commons
Photo credit: Philo Nordlund, flickr creative commons

Every budget has programs that get funded well and get what they want. NC Health News takes a look at some of the winners in this year’s Health and Human Services budget.

By Rose Hoban and Holly West

State lawmakers in both the North Carolina House and Senate voted for final passage of the biennial budget late Wednesday afternoon. The $20.6 billion plan reflects the revenue goals created in the tax reform bill passed last week and cuts $53 million from last year’s budget total.

While the plan makes deep cuts to education, many advocates in the health care world have said that this budget could have been a lot worse for the state’s health care system.

“We think early-childhood education fared well in the budget,” said Michelle Rivest, head of the North Carolina Child Care Coalition. “We’re pleased with the commitment that the conference committee made to young children. NCPre-K actually got additional funding.”

But others reflecting on the budget were not as pleased as Rivest.

Lisa Hazirjian from the N.C. AIDS Action Network expressed concern about losses in funding to the AIDS Drug Assistance Plan.

“It means that there’s a much greater possibility that we’ll go back to ADAP waiting lists,” Hazirjian said.

As in every budget. there are winners and losers, and North Carolina Health News profiles some of the winners here.

WINNER: Psychiatric Beds

Inpatient psychiatric beds will soon be paid for using a two-tiered system, with Medicaid paying hospitals more for patients that require more intensive care.

The new system will allow patients with more acute mental illnesses to be treated in local hospitals’ inpatient psychiatric beds.

The current system was put in place in 2008 to provide short-term psychiatric treatment in local hospitals and keep people with less serious illnesses out of state facilities.

Dix Hospital patient care, 1946-1947. Photo courtesy the Barden Collection, North Carolina State Archives, Raleigh, NC.
Dix Hospital patient care, 1946-47. Photo courtesy of the Barden Collection, North Carolina State Archives.

The “three-way beds” are contracted between local hospitals, local management entities (LMEs) and state government.

Because patients with more serious mental illnesses require more costly treatment, it’s hard for them to get treatment at local hospitals.

“Some of the hospitals are losing money,” said bill co-sponsor Rep. Susan Martin (R-Wilson).

Those people have no choice but to go to state psychiatric hospitals. But many of them end up in local hospitals’ emergency departments while waiting for a spot in state facilities.

That’s the problem this two-tiered system aims to fix.

“If we fund more low-level community-based services, we should be able to serve more people without putting them in [state] hospitals at all,” said Corey Dunn, director of public of policy for Disability Rights North Carolina.

Right now, inpatient psychiatric beds cost $750 a day.

The budget provides money to purchase more three-way beds and bed days than are currently being offered. For each of the fiscal years 2013-14 and 2014-15, $38.1 was appropriated.

The budget also provides $3.5 million in funding for 19 more beds at Broughton Hospital in Morganton, beds that were written into last year’s budget contingent on Medicaid funding. But because Medicaid had an overrun this year, those beds ended up unfunded.

The new funding will be recurring, which means that next year the money will automatically be available unless budget writers specifically take it away.

WINNER: Child Treatment Program

The N.C. Child Treatment Program received $1.8 million in this year’s budget for the next two years.

A partnership between the Duke-UCLA National Center for Child Traumatic Stress, the Center for Child and Family Health and the UNC School of Medicine, the program uses evidence-based mental health treatments to help traumatized kids and families and teaches these methods to clinicians.

Robert Murphy, executive director of the Center for Child and Family Health, said he is pleased the legislature is funding the program.

Image courtesy apdk, flickr creative commons
Image courtesy apdk, flickr creative commons

“This new support will allow even more children and families to receive the best mental health care possible, at the most vulnerable times of their lives,” he said.

The budget money will be used to help the program expand its services.

Karen McLeod, head of Benchmarks, a coalition of groups that serve children and families, said they are hoping to link the program with Community Care of North Carolina, a not-for-profit network of primary-care practices, and work with Medicaid.

The Child Treatment Program uses evidence-based practices that help children get over traumatic events.

“We cannot remove their concerns but we can help children and families to gain a sense of mastery and an ability to cope effectively,” Murphy said. “The result for children is that they are again able to go about the critical aspects of daily life, learning in school, participating in family life and having friends.”

He said these evidence-based treatments are not widely available in North Carolina.

The program has high expectations for its clinicians. McLeod said it follows strict guidelines for its proven treatments.

“What we know from the CT program is that these kids are getting significantly better and in a shorter period of time under the evidence-based practices,” she said.

Murphy said clinicians need this rigorous training program to use the treatments more effectively.

“We would not expect a physician to learn a complex procedure in a brief training, yet all too often we have expected this of mental health providers,” he said.

The CTP is aimed at helping kids in the child welfare system. A certain portion of clinicians’ patients must be Medicaid recipients.

McLeod said managed care organizations can use the roster of clinicians to find high-quality providers for their clients.

The program received $1.8 million in recurring funding for each year of the biennium, plus an additional $250,000 per year in non-recurring funds to train additional practitioners from North Carolina.

McLeod said the money will also go to help the program create long-term sustainability by increasing the costs for training in exchange for higher reimbursement once practitioners are actually delivering the service.

WINNER: Adoption funding

This year’s budget includes almost $7 million for adoption funding.

The General Assembly appropriated $3 million for the Adoption Promotion Fund – $1.5 million for fiscal year 2013-14 and $1.5 million for 2014-15.

That money will be used to fund nonprofit organization adoption programs. It will also be used to provide incentives for county social service departments that reach and surpass a certain number of adoptions.

The rest of the $7 million will go toward the Permanency Innovation Initiative Fund, which will be used by the Children’s Home Society of North Carolina to find permanent homes for foster children.

The budget appropriates $1 million for fiscal year 2013-14, and $2.75 million for  2014-15 for the fund. It also creates an oversight committee for the Permanency Innovation Initiative Fund that will report to the General Assembly each year.

Matt Anderson, lobbyist for the Children’s Home Society of North Carolina, said the money is needed to make up for inevitable cuts in federal spending. Until this year, the only source of adoption funding has been from the federal government.

Anderson said the money is going only to the Children’s Home Society because it’s not enough to service multiple organizations.

“Our initial thoughts were that it’d be a larger fund available to all,” he said.

The society uses two unique methods for establishing permanency. One is Family Finding, which is used to find relatives of foster kids in hopes that they can adopt the child.

Rep. Marilyn Avila (R-Raleigh) said knowing where they come from is good for foster children, even if they don’t get adopted by relatives.

“This feels promising, in that you give that child the connection that all of us want,” she said.

The other is Child-Specific Adoption Recruitment Services, a program that develops recruitment strategies for individual children.

“One size fits all doesn’t work with humans,” Avila said.

Anderson said these two services are specific to his organization.

“Those are two specifically prescribed service models that we deliver and no one else does,” he said.

Anderson said the Children’s Home Society’s program will serve as a demonstration program for other organizations.


After House budget writers initially proposed reducing eligibility for NC Pre-K, and thus reducing the number of total slots available for the program, the compromise budget keeps the eligibility for NC Pre-K essentially the same and adds permanent money for about 2,500 new slots.

kidsplaying copy

Legislators allocated $12.4 million in state lottery funds to cover the new slots.

“It’s important to put this in context,” said Rob Thompson from the Covenant With North Carolina’s Children. “Gov. Perdue added 5,000 slots last year, but that was temporary funding only. Those are expiring now, so, in sum, there will be 2,500 fewer slots at the beginning of this year than last year.”

But Michelle Rivest from the the N.C. Child Care Coalition pointed out that those 2,500 slots will be permanent, because the funds for them are recurring, not temporary.

“I can only judge from the outcome that the conference committee had the right information from the right people to make this kind of decision,” she said.

“It was the actions of our lobbying team, to hundreds of coalition members across the state, to thousands of parents and child-care providers communicating with legislators,” Rivest said. “Legislators heard our concerns and responded.”

Child Care subsidies also stayed steady after Senate budget writers created an initial proposal to cut them by more than 40 percent.

Cover photo credit: Philo Nordlund, flickr creative commons

Creative Commons License

Republish our articles for free, online or in print, under a Creative Commons license.

Rose Hoban is the founder and editor of NC Health News, as well as being the state government reporter. Hoban has been a registered nurse since 1992, but transitioned to journalism after earning degrees...