By Rose Hoban
In an eerily unoccupied General Assembly building, only a scattering of lawmakers were in each of the chambers of the Senate and the House of Representatives. Nonetheless, there were enough members present to vote and carry out their work.
Thus began what is likely the strangest of legislative sessions, one designed for the age of the COVID-19. This new reality requires lawmakers, many of whom are older and in the age bracket most at risk for a poor outcome from COVID-19, to forego their usual habits of huddling around colleagues’ desks and caucusing in stuffy meeting rooms where it’s often standing room only.
The lawmakers returned to the state capital to address policy and funding issues created by the COVID-19 pandemic and the health care and economic havoc wreaked by the virus on the state.
One of the primary tasks for lawmakers is to allocate the billions in federal dollars that have flowed to North Carolina, more than $6 billion coming as a result of the federal CARES Act and other pieces of federal legislation passed in the last six weeks.
And while the circumstances and procedures for this week’s sessions are extraordinary, the politics that emerged even before lawmakers arrived are familiar to those who have observed the General Assembly for the past decade.
Cautious spending plan
Over the past six weeks, House lawmakers have engaged in a public committee process to hear from constituents and make decisions about where to spend those federal dollars, and eventually, some state dollars. In contrast, the Senate has had an internal process, with little opportunity for public input. That chamber’s spending plan was outlined in a bill posted online late Tuesday afternoon.
According to House Speaker Tim Moore (R-Kings Mountain), one $4 billion infusion of federal cash came to North Carolina, $3.5 billion to go directly to the state with about a half-billion dollars earmarked for large municipalities with more than 500,000 residents. In North Carolina, those were Wake, Mecklenburg and Guilford counties, and the city of Charlotte.
Moore explained that they did not want to spend all the money right away.
“Under the current language from the feds, you’re supposed to spend all of that this calendar year,” he told reporters Tuesday afternoon after the House session adjourned. “There are a lot of moves afoot to give flexibility to be able to roll that into later.”
Moore also pointed out that the spending plans championed by the Republican-led legislature have left the state with a robust rainy day fund and a surplus in the unemployment insurance trust fund.
Nonetheless, he said that it would be wise to “spend all this federal money before you touch a dime in state money because we don’t know under the current rules if it would have to go back.”
The differences in the spending plans were notable.
Of the remaining funding, Gov. Roy Cooper has proposed spending about $1.4 billion to address short term needs. The House, in their multiple proposals, has signaled they want to spend about $1.6 billion and in a bill posted online late Tuesday afternoon, the Senate proposed spending a bit more than $1.2 billion.
Senate spending proposal (SB 704)
|$50 million to purchase personal protective equipment made available to public and private health care providers||$50 million to purchase personal protective equipment to the NC Healthcare Foundation, the NC Senior Living Association and the NC Medical Society|
|$25 million for contact tracing, trends tracking and analysis||$25 million for contact tracing, trends tracking and analysis|
|$25 million for homeless response, adult and children’s protective services, domestic violence shelters, child care; of this, $6 million for food banks and $2.5 million for fresh produce for SNAP recipients||$6 million for food banks|
|$2.25 million for foster care services||$2.25 million for foster care services; $290,000 for the LINKS program that supports foster children from 13-21 years old|
|$25 million for state/ county special assistance recipients, amounting to monthly allotment of $1325/ facility resident||$15 million for state/ county special assistance recipients, amounting to monthly allotment of $937/ facility resident|
|$25 million for rural and underserved communities||$5 million to the NC Community Health Centers Association|
|$75 million for rural hospitals||$1.8 million to the Old North State Medical Society to target and African American communities with COVID outreach.|
|$1.4 million for free and charitable clinics||$10 million to the NC Association of Free and Charitable Clinics|
|$1.5 million for NC MedAssist, program to provide low income people with pharmaceuticals|
|$25 million for teaching hospitals|
|$25 million for other hospitals|
|$25 million to the Duke Human Vaccine Initiative for vaccine research||$25 million to the Duke Human Vaccine Initiative for vaccine research|
|$25 million to the Gillings School of Global Public Health||
$15 million to be split among Gillings School of Global Public Health at UNC Chapel Hill, Brody School of Medicine at ECU, Wake Forest University School of Medicine and Campbell University School of Osteopathic Medicine
|$25 million to Brody School of Medicine at ECU|
|$25 million to Wake Forest University School of Medicine|
|$10 million to Campbell University School of Osteopathic Medicine|
|5% rate increase for Medicaid providers||rate increase for Medicaid providers|
|Proposed Medicaid waiver to cover all COVID testing and treatment for people earning up to 200% of the federal poverty level.||Details estimated federal funding for various programs that will pass through the state, including appropriations to: Child Care and Development Block Grant, Community Services Block Grant, Low Income Home Energy Assistance Program, Child Welfare Services, Supportive Services, Congregate and Home-delivered Meals, Family caregivers, Protection of Vulnerable Older Americans, Centers for Independent Living, Ryan White HIV/AIDS funding, CDC grant, Homeless Assistance, Housing Opportunities for Persons with AIDS, WIC, Community Health Center, Small Rural Hospital Improvement Program, Hospital Preparedness program.|
Familiar fissures emerge
With a half-billion dollar gap between the total House and Senate proposals and significant differences between the two chambers’ health care plans, a familiar legislative dynamic began to unfold of tension between the two bodies.
Moore made the case for the House’s plan.
“It’s being targeted to where we believe the needs are. In the process of negotiations with the Senate, that number may get smaller of course,” he said, “and so if it does, we’re just going to make sure that the key priorities are met.”
In a press availability later Tuesday afternoon, Senate leader Phil Berger (R-Eden) made the case for his chamber’s approach, a bill cosponsored by 45 senators, both Republicans and Democrats.
“Back in March, (minority leader Sen. Dan) Blue (D-Raleigh) and I sat down and tried to just figure out a way that we could come together with a consensus bill,” Berger said. “And so we decided to work the process that we’ve had in the Senate, and to give every member of the Senate an opportunity to have meaningful input in terms of what gets considered and what ends up in the bill.”
Notable differences in health care are a lack of funding for rural and other hospitals that have been hammered by the governor’s decision to have them stop doing elective surgeries. The House would appropriate $125 million to go to hospitals, while the Senate skips that funding.
“I believe that there are dollars that are going directly in one of the federal bills to the rural hospitals,” Berger said. “The thought that we have is ‘let’s see where those dollars are going, let’s see if there are additional needs at this time based on what takes place.’”
He said that there are multiple streams of federal funding going in different directions and he argued against doubling up on that effort.
But Berger’s stance drew criticism from the North Carolina Healthcare Association, which represents the state’s hospitals.
“We are disappointed that the Senate chose to ignore the very caregivers that have provided places of healing and care for North Carolinians during this unprecedented crisis,” wrote NCHA vice president Cody Hand. “I hope that the rural hospitals that have taken the largest hit due to decreased work, at the direction of the state, can survive despite the Senate’s obvious oversight.”
Berger also said his chamber disagreed with a plan put forth by Health and Human Services Secretary Mandy Cohen to obtain a waiver from federal regulators to cover all the costs for COVID testing and treatment for anyone earning less than 200 percent of the federal poverty level (about $42,600 for a family of three). The House included the provision in its bill, but the Senate left it out.
“It is our belief that the federal dollars that are going directly to health providers to deal with coronavirus, there are specified or specific federal dollars going directly to providers, should take care of the treatment for folks that are uninsured,” he said.
The issue may be moot, however, based on new guidance from the federal Department of Health and Human Services, which launched a portal on Monday where health care providers that have provided testing or treatment to uninsured patients can submit claims for reimbursement.
“Congress appropriated funding for COVID-19 testing for the uninsured and also appropriated funding for a general fund to support providers affected by COVID-19,” said HHS Secretary Alex Azar in a press release on the federal website.
Different approaches to research dollars
Another notable difference between the two chambers’ plans is how the House and Senate have approached funding North Carolina-based research aimed at addressing the pandemic.
The House plan appropriates $110 million, with $100 to be divided up between the state’s four older academic medical institutions to support vaccine research, community testing initiatives, and development of an antibody treatment for COVID-19 infection. An additional $10 million would go to Campbell University’s School of Osteopathic Medicine for community- and rural-based workforce responses to the pandemic.
The Senate bill allocates $15 million total to the five schools for the same priorities, in addition to an extra $15 million to Duke University’s Human Vaccine Institute to go towards vaccine research. The senate proposal also earmarks $20 million to Wake Forest University’s syndromic surveillance and antibody testing project that previously received $100,000 in legislative discretionary funding.
Berger bristled when asked about the significant problems that continue to plague antibody tests, which have been critiqued roundly in scientific circles. In a recent investor call, Roche CEO Severin Schwan called antibody testing “a disaster. These tests are not worth anything, or have very little use.”
But Berger pushed back.
“I think that kind of approach is akin to letting the perfect be the enemy of the good,” he said. “I believe that the folks at Wake Forest are very sensitive to the fact that the antibody tests that are out there are not 100 percent accurate, and that there are some challenges and some limitations, but that they are going to follow the best science that is available in putting those tests into the field.”