The North Carolina House adopted its update to the Governor’s budget proposal last week. We expect the Senate budget released in the coming weeks. Below are some provisions in the House version that could have an impact on physicians and physician assistants.
The bill includes modest teacher and state employee pay raises, increased transportation funding and a number of health care related spending items. While the House budget does not include legislative language on Medicaid reform, it does provide funding to the Department of Health and Human Services for planning and reform of the program to a capitated model.
North Carolina Medical Society (NCMS) staff has highlighted some additional budget provisions affecting physicians below.
Authorizing the Secretary of the Department of Health and Human Services (DHHS) to administer the Medicaid and Health Choice programs within their enacted budgets

  • This provision of the budget gives the DHHS Secretary broad authority to administer the Medicaid and Health Choice programs within their enacted budgets. This effectively provides the Secretary with the ability to cut funding to certain programs or providers as necessary to run these programs within their enacted budget amounts. This is an unprecedented change, taking the budgeting responsibility from legislators and transferring that responsibility to DHHS and the Secretary. The impact of this change is not certain at this time, however the .9 percent reduced appropriations funding for Medicaid allotted in each year of the fiscal biennium indicates the Secretary would have broad authority to reduce program funding in certain areas and/or to provider payments under this provision to meet the outlined budget amount.

Creation of a Joint Legislative Oversight Committee on Medicaid

  • Establishes a new Joint Legislative Oversight Committee consisting of 14 members of the General Assembly to examine budgeting, financing, administrative functions, outcomes and operational issues related to the Medicaid and Health Choice programs.

Funding for Medicaid reform planning and implementation

  • Provides $2.5 million in fiscal year 2015-2016 and $2.5 million in fiscal year 2016-2017 for planning and reform of the Medicaid program to shift utilization risk from the state under a capitated model.

Transition to performance-based managed care, care management, health services and health-related service contracts

  • Requires DHHS to ensure any contract related to managed care, care management, health services and health-related services are performance-based contracts. This includes requirements for including measurable outcomes for contractors.

Continued funding for programs to improve birth outcomes and lower infant mortality rates

  • Funds are provided for a competitive grants process in the sum of $2.5 million in recurring funds for each year of the 2015-2017 fiscal biennium and $2.5 million in nonrecurring funds for the 2015-2016 fiscal year to establish a competitive grants process for local health departments for evidence-based program proposals to improve birth outcomes and lower infant mortality rates.

Creation of the Office of Program Evaluation Reporting and Accountability within DHHS

  • Creates a new Office of Program Evaluation Reporting and Accountability within DHHS that will assess the evidentiary basis of all department programs, and evaluate any programs when directed by the General Assembly or the Secretary.

Health Information Technology

  • Transfers oversight and administration of the statewide Health Information Exchange (NC HIE) network to DHHS in the event of the dissolution of the NC HIE.
  • Provides $3,160,611 in fiscal year 2015-2016 and $3,160,611 in fiscal year 2016-2017 to be used by DHHS to effect the transfer of the NC HIE to the Department in the event of the dissolution of the NC HIE.

Continued funding for NCTracks

  • Provides $2.3 million for the 2015-2016 fiscal year and $940,000 for the 2016-2017 fiscal year to match federal funds for NCTracks.

Medical Examiner funding

  • Provides an increased medical examiner autopsy fee of $1,750 and an increased medical examiner fee of $200. The budget also requires annual continuing education training by county medical examiners and provides funding for this training. In addition, $2, 195, 000 in nonrecurring funds also are provided to replace and upgrade the Medical Examiner Information System. Additional money is provided to develop and implement an electronic Death Records system as well.

Funding for local inpatient psychiatric beds

  • Provides $43,049,144 for the 2015-2016 fiscal year and $43,049,144 for the 2016-2017 fiscal year to be used to purchase additional local inpatient psychiatric beds or bed days.

Funds to increase capacity for behavioral health crisis centers

  • Appropriates $2 million in nonrecurring funds to increase the number of co-located or operationally linked behavioral health urgent care centers and facility-based crisis centers and to increase the number of facility-based crisis centers designated as facilities for the custody and treatment of involuntary clients. A priority will be given to those areas of the state experiencing a shortage of these types of facilities currently. These funds will also help support reimbursement for services provided by facility-based crisis centers. Lastly, funds are provided to develop and operate a psychiatric bed registry to provide real-time information about available beds at each licensed inpatient facility in the state.
  • The budget bill also establishes a behavioral health partnership pilot program aimed at increasing inpatient bed capacity for short-term care of individuals experiencing an acute mental health, substance abuse or developmental disability crisis.

The NCMS will continue to keep members updated as the Senate begins their budget process and the negotiations between the chambers take place over the coming weeks.