By Thomas Goldsmith, Rose Hoban, Taylor Knopf

Legislative buildings in Raleigh buzzed with activity and parking was hard to find in the streets surrounding the capitol complex Thursday morning, as policymakers, lobbyists and advocates arrived to get their first glimpses of the budget version being presented by the state’s House of Representatives.

As advocates flipped through more than 300 pages of health and human services budget provisions, a familiar sigh resonated – once again, the legislature failed to include an expansion of the state’s Medicaid program, a policy option they’ve had since the implementation of the Affordable Care Act in 2012.

“We are disappointed the House budget does not provide a solution for the over 600,000 hardworking North Carolinians who have no way to afford health insurance,” wrote Erica Palmer Smith, who heads Care4Carolina, an advocacy group. “We are hopeful that as budget negotiations move forward, our state leaders will work to find a solution for these workers, parents, and veterans stuck in the coverage gap.”

House members will compile all of the different area budgets into one large bill that will get a formal introduction next Tuesday. Then House lawmakers will disappear behind closed doors to negotiate with their Senate colleagues to hash out the final plan to be presented to Gov. Roy Cooper. 

“This is the House’s budget and the Senate will not adopt our budget,” said House health and human services appropriations chair Rep. Larry Potts (R-Lexington) “Everybody’ll hold fast at first, and then we’ll realize we all got to meet in the middle. We’ve gotta have a budget.”

That’s not to say that there weren’t budget provisions to cheer many in the health care sector. For one thing, billions of federal dollars are being poured into states to help improve health care and community-based services which have been battered by the coronavirus pandemic. 

Boost for home and community-based service fund

Funding from the American Rescue Plan bumps up Medicaid reimbursement for home and community-based services, through next March. Budget writers estimate that enhancement will net the state close to $275 million in additional federal receipts. 

The plan is to transfer money the state won’t need to spend as a result out of the General Fund into a new Home and Community-Based Services Fund. That money will then be used to enhance and expand services including $54 million to bump up in pay for home health care workers and private-duty nurses paid by Medicaid, $11 million to create additional places for enhanced Medicaid services for people with intellectual and developmental disabilities and $680,000 to extend home health services to people on Medicaid who might want to move out of an institution and return to living in the community. 

Another new pot of money – a total of $40 million – comes from a settlement reached by the office of state attorney general Josh Stein from his lawsuit against the e-cigarette manufacturer Juul. Thirteen million dollars of that money will be used for tobacco and nicotine prevention activities aimed at young people. It’s the first time there have been more than a million dollars aimed at teen tobacco cessation since the General Assembly eliminated $17 million in the 2012 budget that had funded the successful Tobacco. Reality. Unfiltered campaign.

The Juul settlement stipulated how North Carolina could use the funds. There’s precedent for money from settlements being swallowed by the state’s General Fund. For instance, portions of the Master Settlement Agreement with tobacco manufacturers, a sum that’s been upward of $140 million annually in North Carolina, were intended to be used for tobacco cessation activities. But for the past decade, money for tobacco cessation has only totaled less than $3 million a year.

Changes to child care

Among the 174 pages of special provisions in the House budget is language that would initiate dramatic changes to how North Carolina’s 100 counties administer social services. The provision would create seven regional supervision offices to oversee county social service agencies and begin the long process of standardizing the policies they have and how those policies are administered. 

The initiative comes out of the passage of Rylan’s Law, a 2017 law that overhauls the state’s child welfare system. The eponymous Rylan was a little boy who was returned to his mother despite the objections of a court-appointed guardian. Rylan wandered away and drowned several weeks later. 

“We believe this will help provide the state support that county DSS agencies have been requesting for years while enhancing the oversight and transparency of services provided locally,” texted Karen McLeod, a lobbyist and head of Benchmarks, an umbrella agency representing child and family welfare organizations.

She bemoaned the fact, though, that there was no money to fund the transition. 

“We believe it to be important for the success of the restructuring,” she said. 

The special provisions also appropriate some $20 million in new money to support the deployment of the child welfare software created for the state’s NC FAST social services information system that’s years behind schedule. 

When asked by Rep. Hugh Blackwell (R-Valdese) why the state was moving forward with the software, what’s been re-written and redeployed at least once and panned by social services departments committee chair Potts (R-Lexington) quipped, “this is the girl we brought to the dance, so we’re gonna have to probably take her home.”

Money to spend

Long-sought legislative help for low-income residents of assisted living facilities and for adult day care centers would become law under the House’s budget proposal. 

Residents of assisted living on Medicaid have for years had only $46 available each month to pay for everything from medical copays to toothpaste. That figure would increase to $70 in the House budget. But previous attempts to increase the personal needs allowance have failed.

“The Coalition is excited to see the investment in increasing the Personal Needs Allowance,” Heather Burkhardt, executive director of the North Carolina Coalition on Aging, said in a message. “The funds are used by residents to buy essential needs (like shampoo, soap, and slippers) and the rate hasn’t increased in decades. It is well overdue.” 

The increase has won support from the long-term care industry and advocates, she said. 

Help for adult-day centers

Another proposal would release the state’s struggling adult-day care sector from a cap on fees that no other industry faces. Instead, county commissioners, who pay for the services, would have the power to set the rates based on local conditions including worker shortages.

“That’s a very big deal,” said Mary Bethel, a longtime advocate for older people and a member of the Governor’s Council on Aging.

Facing twin pressures from the COVID-19 pandemic and from the cap on fees, about half of adult-day care centers closed their doors, some never to reopen.

Much of the funding for North Carolina’s aging services comes from federal sources. One example is the non-recurring grant of $3.8 million for nutrition services for older people, enough to provide eligible adults each week with two meals or grocery money of $20; high-risk people discharged from hospitals with meals for two weeks; and fresh-food lovers with growth in the North Carolina Senior Farmers’ Market Nutrition Program

‘They’re weaker’

Rich Zeck is executive director of the Pitt County Council on Aging, which oversees the farmers market program. He offered a 30,000-foot view of the importance of staying on top of services to older North Carolinians.

“There’s a lot of focus for the young people, for children and they’re the future, but it’s the present who pays the taxes, who buys the goods and services, who keeps the economy going,” Rich Zeck, who’s involved with a farmers market in Greenville as executive director of the Pitt County Council on Aging, told NC Health News in April.

“When you have a homebound senior who’s not getting fresh fruits or fresh vegetables, it breaks down their immune system. They’re weaker, they have more opportunities for sickness.”

House budget makers sent an additional $4 million over two years for home and community-based services such as Meals on Wheels, senior centers, transportation and other popular programs. The amount is enough to take 1,500 people off waiting lists that usually contain about 10,000 citizens, House budget writers said. 

More than $2.5 million in federal American Rescue Plan funds would go to the state’s strapped Adult Protective Services function. Counties are obligated by law to fulfill the role of protectors of older people against exploitation and abuse, but have received next to no state money.

Alzheimer’s/Dementia Support Services got an extra $150,000 for a one-time project identified as Memory & Movement Charlotte. 

Mental health and substance use

The pandemic launched North Carolina into a “behavioral health emergency,” according to hospital officials and other health groups who have begged state leaders for help. Here’s some highlights of how House budget writers intend to address the state’s rising mental health and substance use issues. 

The House, in agreement with the Senate, adds 1,000 slots for people with disabilities to receive enhanced community services under the Innovations Waiver, which has a current 10-year waiting list of more than 15,000 people. 

Additionally, the House budget aims to give providers at care facilities for people with intellectual and developmental disabilities (IDD) a pay rate increase, as well as short-term financial assistance ($1.8 million) for group homes and $15 million each year of the two-year budget cycle for group home stabilization and transition. 

House budget writers included a modest increase in funds to serve North Carolinians with Traumatic Brain Injuries. The proposed $4 million — up from about $2.4 million in past budget cycles — would be used to “provide residential services, day programs, transportation, respite services and home modification.”

As wait times for psychiatric beds have increased during the pandemic, the House budget aims to open more inpatient beds to treat people with mental illness. Under the House budget, Johnston Health Enterprises, Good Hope Hospital in Harnett County and Harnett Health System, Inc. would each receive $1.4 million from the Dorothea Dix hospital property fund to open more inpatient psychiatric beds. 

Additionally, in an attempt to divert people in mental health crisis from hospital settings, the House budget gives a one-time amount of $25 million to Forsyth and Mecklenburg Counties “to be used for each county’s crisis behavioral health program partnership with the applicable county’s local hospital system, local behavioral health crisis centers, local emergency services 10 providers, and the local management entities/managed care organizations (LME-MCOs) serving the county.”

Missing from the House budget were funds to expand mental health peer support centers — which are operated by people with lived mental health experience — and funds to provide non-police mental health crisis interventions. NC Health News reported on the rise in petitions to involuntarily commit mental health patients and the trauma many live with after being handcuffed and transported by law enforcement in the process. In response, a bipartisan group of House lawmakers sought to create community-based alternatives

“We need a culture shift in our public administration and more community based capacity, including peer generated supports,” said Winston-Salem based mental health advocate Laurie Coker. “We do not need a larger footprint of hospitals or other confining crisis center environments. And we surely do not need to continue to compel people to inpatient treatment (IVCs) when so much else is simply absent in our system.”

The House budget provides $15.1 million each year in additional funding — for a total of $68.2 million over the two-year budget — to help ensure the state complies with the U.S. Department of Justice Olmstead settlement, which requires that the state move Medicaid eligible people with mental illnesses out of institutions into community living settings. A recent independent review of North Carolina’s progress toward the goals outlined in the settlement found that the state fell behind in some areas during the COVID-19 pandemic over the last year.

With the pandemic also came a rise in substance use and drug overdoses. The House budget includes funding amounts — both large and small — across the state to target issues of addiction and offer more recovery treatment. 

The budget includes $4.6 million to expand the Reentry Medication-Assisted Treatment pilot program to treat opioid use disorder in nine additional minimum security prisons and includes $6 million to expand the MAT Community Supervision pilot program for people recently released from prison and on probation. 

Other House budget funds to address addiction and recovery:

  • $2.2 million to Addiction Recovery Care Association, Inc.
  • $4.7 million to Addiction Professionals of North Carolina, Inc.
  • $53,700 to AYA House, Inc.
  • $2.8 million to expand the EMS-based Medication Assisted Treatment Bridge program from two to 10 counties.
  • $500,000 to Partners Health Management to address addiction and recovery needs in Surry County 
  • $5 million per year to Hope Alive, Inc., to operate a substance use disorder treatment and recovery facility in Robeson County
  • $500,000 to Wilkes Recovery Revolution, Inc., in Wilkes County. 
  • $100,000 to Fellowship Hall, Inc., a nonprofit drug and alcohol recovery center in Greensboro. 
  • $150,000 to Safer Communities Ministry, Inc., a nonprofit in Union County for rehabilitation and recovery services to the formerly incarcerated
  • $75,000 to the NC Harm Reduction Coalition to purchase naloxone, an opioid overdose reversal drug and $25,000 to law enforcement agencies to buy naloxone

North Carolina’s state fiscal year ended more than a month ago. In previous years, that’s meant that the state legislature would have to have most of its budget work completed by the end of June, or else pass so-called continuing resolutions to keep the wheels of government grinding. But a provision inserted into the state budget in 2018 now means that those continuing resolutions automatically kick in on July 1 if lawmakers haven’t completed their work on the budget.

Correction: An earlier version of this story incorrectly stated the size of the Juul settlement. It is $40 million, not $15.7 million. It also incorrectly described a budget provision encumbering how an attorney general may settle cases without getting a green light from the legislature. 

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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...

One reply on “NC House counters Senate budget with more funding for mental health, home and community services”

  1. Hi, I’m a frustrated private practice Licensed Clinical Social Worker who provides mental health services to adults and adolescents in a rural setting. There is a dire need for Medicaid providers in our community, and the process to become one requires jumping through many hoops, especially for those of us in private practice. I receive many referrals from physicians in our area to provide care for clients with Medicaid, but am currently unable to see them for the following reasons:
    Although I’m an approved Medicaid provider, I can’t provide services unless I’m approved by the LME, a process which can take up to 6 months, and then you may or may not get approved. On their website, they say that contracting with them is a “privilege, not a right.”
    Then, if by chance I get approved by the LME, I have to apply separately to each Medicaid MCO. In the meantime, clients are desperately awaiting help, something I could provide immediately.
    I don’t know if I’m sending this message to the correct place; I’m just sad and frustrated, and feel very powerless in this situation.
    Thanks for allowing me to vent!

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