In this Issue:
New NCALA Executive Director!
As President of the NCALA Board of Directors, I am very pleased to announce that Peggy A Smith will
soon be joining NCALA as our new Executive Director. Many providers are familiar with Peggy from her current position as Program Director at the
Eastern North Carolina Chapter of the Alzheimer's Association. Peggy has many years of experience in working with senior populations, and she brings a broad base of excellent organizational and operations experience to her new responsibilities at NCALA. Peggy is offering many creative ideas and approaches to help our association continue to grow and to best serve our members.
Peggy will be available to meet our membership at the Fall Conference, and will officially begin her
new duties in the NCALA office on October 16. Please join me in welcoming Peggy to the NCALA team and family!
Tonya Cloutier
NCALA Board President
The Revised SA Rate
Budget alert: Key among the funding changes in the final budget for Health and
Human Services is the reduction of State/County Special Assistance rates, cutting nearly $2.3 million in FY 09-10 and nearly $3.3 million in FY 10-11. Effective October 1, 2009, this cut will roll back 75% of the increase for low-income seniors in adult care homes from the $34-per-month increase received January 1, 2009, to about $8.50 per month. The revised SA rate will be $1,182 starting on October 1, 2009 (Source: State Budget, Part X, Department of Health and Human Services, Section 10.57.(b), page 95).
While none of us who provide adult care services are happy about this decrease in funding, the
reality is that it could have been much worse in this particular budget year. We are all aware of the budget challenges in our State, and of the
significant cuts that have been made in many valuable programs. We want to acknowledge the hard work and contributions of our NCALA lobbyist, Evelyn
Hawthorne, in navigating the legislative activities at the General Assembly this year. Without Evelyn's involvement and the grassroots efforts of some of our association members, these budget cuts could have impacted our industry harder than they ultimately did.
2009 NCALA Fall Conference & Trade Show
Register soon!
We are looking forward to seeing you next month at NCALA's 2009 Fall Conference & Trade Show in
Winston-Salem! Conference registration forms are available at www.ncala.org/fc2009, including participant and vendor registration forms and golf tournament registration forms.
Hotel Group Rate Deadline Extended
The NCALA group rate (of $120 per night) at the Marriott has been extended
until the date of the conference.
NCALA Fall Conference & Trade Show
October 6-8, 2009
Twin City Quarter/Benton Convention Center
Winston-Salem, NC
www.ncala.org/fc2009
Summary of Legislative Action and Policy Changes 2009
Economy's Woes Sets Session's Somber Tone
North Carolina's state legislators were confronted with challenges beyond their expectations when
they returned to Raleigh to convene the 2009 Session January 28. The tone was set January 10, when North Carolina's 73rd Governor, Beverly Eaves
Perdue, took the oath as the first female to hold that office. Her first speech as Governor was peppered with references to the state's economic
difficulties about which she was already aware, but also to the bright future that would reward North Carolinians who would face the problems with
courage and decisiveness.
Lawmakers needed both those traits as they waded through economic shortfalls and unemployment the
likes of which had not been seen since the Great Depression. The cliche, "it could be worse," was quoted often as North Carolina's recession arrived
later than it did in much of the nation. The neighbor to the south—South Carolina—faced unemployment numbers that rivaled those in the rust belt. But lawmakers felt real pain as they weighed unthinkable choices—education cuts, human services cuts, and employee furloughs among them—as they worked to give the new governor a constitutionally mandated balanced budget to sign.
All the while, the revenues came in slowly and short of expectations. Still working under the
2008-2009 Budget, Gov Perdue announced cuts due to revenues running far shorter of even the most conservative estimates. The rescissions continued
while lawmakers continued to struggle to cut and to find ways to raise the revenues needed to preserve what was necessary to maintain North Carolina's priorities by onset of the new fiscal year in July and the new 2009-2010 budget.
The fiscal conundrum overshadowed nearly every deliberation, debate, and decision. Few policy
discussions this year did not involve the budget. Policy issues that would otherwise be considered were shelved this year because of the budget.
NCALA Protects Providers, ACH Residents
Despite these obstacles, NCALA was active in advocacy efforts on behalf of assisted living
communities and providers who support them. Because of the state's economic situation, NCALA found itself in a defensive posture, fighting to preserve funding for programs to enable NCALA members to serve frail elderly persons of all income levels and to continue to serve those who need help from state programs.
NCALA fought successfully to thwart a proposal to stymie development of new Special Care Units for
elderly who suffer from dementia. With the help of Rep Jean Farmer-Butterfield, (D- Wilson), NCALA was able to demonstrate to lawmakers that that such a cut would not only be ill-advised, but hurt frail elderly persons who need these services in the most appropriate venue—one that, for persons who need state supports, saves North Carolina money. NCALA worked with the pharmacy community to oppose an effort to impose a mandated mail order pharmacy program in the State Health Plan The proposal would have made serving retired state employees in adult care homes costly and difficult. The mail order mandate for the State Health Plan was eliminated. NCALA worked with others affected by North Carolina's Certificate of Need (CON) law to amend the program to make sense—dollars and cents.
Given such results NCALA's advocacy has clearly emerged as a tremendously valuable service supported
by members' dues. Without NCALA advocacy efforts, adult care homes that serve low-income elderly would have lost all of the increase received in
January, 2009. Instead, members will be able to budget some of that increase. Without NCALA advocacy, adult care homes' Medicaid PCS could have been
cut, as well. Without NCALA advocacy, CON reforms that enable renovations and updates and that curb frivolous, expensive contested cases would not
have happened this year.
NCALA members must prepare for the turbulent 2010 political environment through vigorous support for
NCALA advocacy activities. You can be a part of advocacy that protects your business and residents. Support NCALA by inviting lawmakers to visit your
community. Please support NCALA PAC. Such simple acts can amplify NCALA's advocacy message. For more information on participating in advocacy efforts, please contact Evelyn Hawthorne, NCALA's Government Relations Consultant (contact info below).
Thank you for all that you do to support NCALA!
Certificate of Need Law Changes
HB436, FAIRNESS IN CON DETERMINATIONS/INFLATION ADJ
Summary: An Act to Exempt from Certificate of Need Review Certain Capital Expenditures for Nursing Homes, Adult Care Homes, and Intermediate Care Facilities for the Mentally Retarded that Entail Innovative Renovations and Expansions to Improve Quality of Life. Please note—the bill's limitation to only one allowable renovation was amended to allow more than one of certain types of projects in Section 3 of H 1297, listed below.
Status: 06/19/2009 - Chaptered Session Laws
History: 06/19/2009 - G Signed by the Governor 6/19/2009.
06/19/2009 - R Chaptered Session Law 2009-145.
Web Link
HB1297, PROVIDER CREDENTIALS/INSURER/PROVIDER CONTRACT
Summary: An Act Pertaining to the Credentialing of Health Care Providers Under Health Benefit Plans; Adding a Definition, and Amending Notice and
Contract Negotiation Provisions for Health Benefit Plan and Provider Contracting; Clarifying a CON Exemption Criterion; and Modifying Inspection
Practices of Certain Hospital Outpatient Locations.
History: 08/26/2009 - G Signed by the Governor 8/26/2009.
08/26/2009 - R Chaptered Session Law 2009-487.
Web Link
SB804, CON CHANGES
Summary: An Act to Make Changes to the Certificate of Need Law with Respect to Time Lines for Issuance of a Certificate of Need; to Modify Bond
Requirements for Appeals; to Prohibit the Approval of a Certificate of Need for Certain Types of Emergency Departments for a Specified Time Period;
and to Require the Department of Health and Human Services to Study the Licensure of Hospital-Based Off-Site Emergency Departments.
Status: 07/31/2009 - Chaptered Session Laws
History: 07/31/2009 - G Signed by the Governor 7/31/2009.
07/31/2009 - R Chaptered Session Law 2009-373.
Web Link
Other NCALA-tracked Bills that Became Law
HB456, TECH & ORG CHANGES/CERTAIN DHHS FACILITIES
Summary: An Act to Make Technical and Organizational Changes to the Law Regarding the Licensure and Inspection of Facilities for Aged and Disabled
Individuals.
History: 08/07/2009 - G Signed by the Governor 8/7/2009.
08/07/2009 - R Chaptered Session Law 2009-462.
Web Link
HB994, WILSON HOUSING AUTHORITY-AGING IN PLACE
Summary: An Act to Direct the Department of Health and Human Services to Advise the Housing Authority of the City of Wilson on the Requirements for
Registration as a Multiunit Assisted Housing with Services Program and on the Requirements for Licensure as a Home Care Agency in Order to Assist the
Housing Authority with Their Efforts to Help Individuals Age in Place.
Status: 06/30/2009 - Chaptered Session Laws
History: 06/30/2009 - G Signed by the Governor 6/30/2009.
06/30/2009 - R Chaptered Session Law 2009-220.
Web Link
HB996, REPLACE DHHS WITH UNC POVERTY-ACH/PH STUDY
Summary: An Act to Repeal a Requirement that the Department of Health and Human Services Study the Feasibility of Operating a Licensed Adult Care
Home in a Public Housing Facility and to Direct the UNC Center on Poverty, Work and Opportunity to Conduct the Study.
History: 07/31/2009 - G Signed by the Governor 7/31/2009.
07/31/2009 - R Chaptered Session Law 2009-391.
Web Link
HB1129, CLARIFY SILVER ALERT-ALL AGES
Summary: An Act to Clarify a Silver Alert May be Issued for a Person of Any Age Who is Believed to be Suffering from Dementia or Other Cognitive
Impairment.
Status: 06/19/2009 - Chaptered Session Laws
History: 06/19/2009 - G Signed by the Governor 6/19/2009.
06/19/2009 - R Chaptered Session Law 2009-143.
Web Link
HB1186, DHHS/UPDATE CURRENT INSPECTION PRACTICES.-AB
Summary: An Act to Authorize County Departments of Social Services to Conduct Follow-Up Monitoring of Adult Care Homes.
Status: 06/30/2009 - Chaptered Session Laws
History: 06/30/2009 - G Signed by the Governor 6/30/2009.
06/30/2009 - R Chaptered Session Law 2009-232.
Web Link
HB1187, DHHS TECHNICAL CHANGES/HEALTH CARE PERSONNEL
Summary: An Act to Make Technical Changes to the Health Statutes Pertaining to Health Care Personnel and Health Care Facilities.
Status: 07/17/2009 - Chaptered Session Laws
History: 07/17/2009 - G Signed by the Governor 7/17/2009.
07/17/2009 - R Chaptered Session Law 2009-316.
Web Link
SB188, SPECIAL CARE DENTISTRY COLLABORATION
Summary: An Act to Direct the Department of Health and Human Services, Division of Public Health, in Collaboration with the Division of Medical
Assistance, Division of Aging and Adult Services, the University of North Carolina at Chapel Hill and East Carolina University Schools of Dentistry,
the North Carolina Dental Society, and Current Special Care Dental Providers, to Examine Dental Care Options for Special Care Populations.
History: 06/16/2009 - G Signed by the Governor 6/12/2009.
06/16/2009 - R Chaptered Session Law 2009-100.
Web Link
SB195, PREPARATIONS FOR AGING BABY BOOMERS
Summary: An Act to Direct the University of North Carolina Institute on Aging, and the Division of Aging and Adult Services, Department of Health and
Human Services, to Take a Leadership Role in Helping North Carolina Prepare for Increased Numbers of Older Adults, as Recommended by the North
Carolina Study Commission on Aging.
History: 08/05/2009 - G Signed by the Governor 8/5/2009.
08/05/2009 - R Chaptered Session Law 2009-407.
Web Link
SB287, STATE HLTH PLAN $/GOOD HEALTH INITIATIVES
Summary: An Act to Appropriate Funds for the State Health Plan for Teachers and State Employees and to Make Other Changes Related to the State Health
Plan.
History: 04/27/2009 - G Signed by the Governor 4/23/2009.
04/27/2009 - R Chaptered Session Law 2009-16.
Web Link
Discussion
SB287, State Health Plan/Good Health Initiatives was an effort to reinvent the State Health Plan to make it sustainable for current and
future state employees. With no changes implemented, the State Health Plan risked financial failure. SB287 contains higher costs and increased
co-payments and deductibles for Plan members.
The Plan's pharmacy benefits do not include a mail order or extended pharmacy program that was
advocated by Medco, the Plan's pharmacy benefits manager. Medco will provide specialty drugs as defined by the bill, but cancer drugs will be excluded
from the specialty vendor requirements. The mail order/extended pharmacy network provision would have made serving the pharmacy needs of retired state
employees in assisted living communities difficult. Consequently, NCALA, along with the NC Retail Merchants Association and the Association of
Community Pharmacists and NCAP, worked hard to maintain the ability of state employees and retirees to work directly with their local pharmacists for
quality, responsible and accessible pharmacy services.
2009 State Budget Bill
Beyond the basics of taxing and spending, much policy is set within the North Carolina budget. NCALA
always follows it closely.
SB202, APPROPRIATIONS ACT OF 2009
Summary: An Act to Make Base Budget Appropriations for Current Operations of State Departments, Institutions, and Agencies, and for Other Purposes.
History: 08/07/2009 - G Signed by the Governor 8/7/2009.
08/07/2009 - R Chaptered Session Law 2009-451.
Web
Links
SB202, 2009 Appropriations Act, created a budget that appropriated more than $19
billion, falling short of last year's budget by more than $2 billion. Embedded within the conference report are a myriad of cuts in education and
health and human services spending and changes to the tax code to generate $990 million in new revenues. Additionally, the budget includes federal
stimulus funds—Economic Stimulus Funds and American Recovery and Reinvestment Act funds—to address some ongoing budget obligations. Consequently, next year's budget process will be more difficult and complex.
Revenues
SB202 proposes changes to the collection of revenues to support the state's operations. One change
that provides a break to many taxpayers is the provision to conform North Carolina's income tax calculation to the Internal Revenue Code, generating a
loss of revenue for the state at a rate of $116.3 million in FY 09-10 and $80.9 million in FY 10-11.
- Income Tax Surtax: scheduled to sunset January 1, 2011, the surtax is slated to generate almost
$173 million in FY 09-10 and more than $177 million in FY 10-11. It would apply to the following filers:
- No surtax for single filers up to $60,000, heads of households up to $80,000, married filing
separately up to $50,000 and married filing jointly or surviving spouse up to $100,000.
- 2% surtax for single filers between $60,000 and $150,000, heads of household between $80,000
and $200,000, married filing separately between $50,000 and $125,000, and married filing jointly between $100,000 and $250,000.
- All filers above the respective levels will be subject to 3% surtax.
- Income Tax Surtax for corporate filers: 3%, expiring January 1, 2011. It is expected to
generate more than $23 million in FY 09-10 and $25.5 million in FY 10-11.
- Sales and Use Tax: increased by 1%, estimated to generate more than $803 million in the first
year and more than $1 billion in the second year.
- Clarify state sales taxes to be collected by retailers; impose state sales tax on remote,
internet sales and click-throughs, digital products, magazines delivered by mail, ringtones, and downloads. These changes are slated to generate
almost $11.8 million in FY 09-10 and $24.1 million in FY 10-11.
- Increase "sin" taxes to generate $68.8 million in FY 09-10 and $93.8 million in FY 10-11, as
follows:
- Cigarettes: $0.10 more per pack
- Other Tobacco Products: 2.8% tax increase
- Beer: $0.05 per six-pack
- Wine: $0.04 per bottle
- Liquor: a 5% increase in the excise tax
- Finance Committees directed to study tax code revisions: The President Pro Tempore of the
Senate and Speaker of the House authorize the Finance Committees of the Senate and House of Representatives to meet during the interim between
legislative sessions to consider reforming North Carolina's tax structure to broaden the tax base and lower take rates.
Fee Changes
The budget proposes a number of fee changes in the area of Health and Human Services providers. The
total number of changes is expected to generate more than $1 million in each year of the biennium. Fee changes of interest follow.
- Increase annual licensure fee for adult care homes with fewer than 6 beds from $250 to
$315.
- Increase annual licensure fee for adult care homes with more than 6 beds from $350 to $360 plus
a per bed fee of $17.50, a $5 increase from $12.50 per bed.
- Impose an initial licensure fee for new providers. New adult care homes would be charged a new
initial licensure fee as follows:
- Adult care homes with fewer than 6 beds: $350.
- Adult care homes with more than 6 beds: $400 plus a per-bed fee of $19.
- Imposition of Medicaid provider enrollment fee: establishes a $100 provider enrollment fee,
payable when a provider initially enrolls in the Medicaid program and then once every three years. This change anticipates generating $1.5 million
in savings in each year of the biennium.
Health and Human Services
The Health and Human Services Budget was funded at nearly $4 billion in FY 09-10 and more than $4.3
billion in FY 10-11. HHS budget cuts for FY 09-10 ran to almost $700 million in recurring funds and to almost $1 billion in nonrecurring funds. HHS
budget cuts for FY 10-11 ran to almost $1 billion in recurring funds and almost $560 million in nonrecurring funds. More than 506 jobs were cut from
HHS in both years of the biennium. These figures do not reflect the federal dollars matching the state's contribution to the Medicaid program. Key
among the funding and program changes are the following items:
Cuts
- Reduce State/County Special Assistance Rates, cutting nearly $2.3 million in FY 09-10 and
nearly $3.3 million in FY 10-11. Effective October 1, 2009, this cut will roll back 75% of the increase for low-income seniors in adult care homes
from the $34-per-month increase received January 1, 2009, to about $8.50 per month, effective October 1, 2009.
- Mandate use of Web-based PASARR, mental health Web-based preadmission screening tool for
nursing homes and for adult care homes, expected to generate $350,000 savings in each year of the biennium.
- Provider rate reductions, cutting more than $76 million in FY 09-10 and more than $82 million
in FY 10-11 from Medicaid provider rates. The cut applies to all public and private providers except for federally qualified health centers, rural
health centers, school-based and -linked health centers, state institutions, hospital outpatient, pharmacy and the noninflationary components of the
case-mix reimbursement system for skilled nursing facilities.
- Modification of Personal Care Services Benefits, generating savings of $40 million in FY 09-10
and $60 million in FY 10-11. This provision is primarily aimed at in-home PCS.
- Reduce Prescription Drug Costs, generating savings of $25 million in FY 09-10 and $22 million
in FY 10-11. The provision would employ enhanced utilization management of the prescription advantage list (PAL), increase utilization of generic
drugs in lieu of brand name drugs, and increase collection of rebates from manufacturers on generic drugs. Should the anticipated savings not be
realized, the DHHS Secretary shall implement a preferred drug list for all drugs in Medicaid, including generics and brand name drugs that offer
supplemental rebates.
- Reimbursement for prescription drugs: the formula for reimbursing pharmacies for prescription
drugs will change from average wholesale price less 10% to wholesale acquisition cost plus 7%. This change is expected to generate savings of more
than $10 million in FY 09-10 and almost $14 million in FY 10-11.
- Durable Medical Equipment cut: cuts funding for this line item by $3.5 million in FY 09-10 and
by $4.2 million in FY 10-11.
- Increase copayments on all Medicaid services by $2, expected to generate savings of more than
$3 million in FY 09-10 and $3.7 million in FY 10-11.
- Increase anticipated CCNC Savings: cuts appropriations to Community Care of North Carolina by
due to anticipated savings generated by greater management of care. This change budgets savings of almost $70 million in FY 09-10 and more than $78
million in FY 10-11.
- Nursing Home Cost Ceiling reduction: nursing homes' reimbursement cost ceiling is reduced from
103.5% of the state median cost to 102.6%, generating savings of almost $2.3 million in FY 09-10 and more than $2.4 million FY 10-11.
- Annual issuance of Medicaid cards: this change goes from a monthly to an annual issuance of
Medicaid cards, budgeting $1.75 million in savings in each year of the biennium.
- Medical Assistance Payments: budgeting use of federal recovery funds in lieu of state funds in
FY 09-10 and in FY 10-11, estimating savings of almost $860 million in the first year and almost $503 million in the second year. If the state's
economic recovery lags beyond 2011, lawmakers will have a significant hole in the Medicaid program to address in FY 11-12.
HHS Policy Changes
The budget sets out a number of significant policy changes in the area of Health and Human Services,
including the following:
- Immunizations: the budget clarifies that local health departments may administer immunizations
at no cost to patients who are uninsured or underinsured and have family incomes below 200% of the federal poverty level. The provision further
clarifies that health care providers who receive vaccines from the state may charge an administration fee that is no more than allowed by the
Commission for Public Health, Section 10.29A(a) and (b).
- Medicaid prescription drug policy: Section 10.58. (d)(28): The prescription drug reimbursement
process for Medicaid continues to include a $5.60 dispensing fee for generic drugs and $4.00 for brand name drugs. The provision covers other
details of interest to the pharmacy community, including provision for enhanced fees for pharmacy services, limitations on quantity, encouragement
of
dispensing of generic drugs, prior authorization and protections from substitution of generic prescriptions for certain drugs to treat mental
illness.
- Preferred Drug List, Section 10.66 (a)-(d): S202 provides to the DHHS Secretary the authority
to implement a preferred drug list in the event that drug utilization management efforts alone do not yield the savings budgeted by June 1, 2010.
The provision sets out the procedure for implementation of the PDL.
- Further clarification of Medicaid orthotics/prosthetics provision: Section
10.58(d)24.
- State/County Special Assistance, Section 10.57. (a)-(e): The budget sets out the rates for
adult care homes and special care units for Alzheimer's and dementia residents. Additionally, the provision sets directs DHHS to review the ACH
personal care services programs to maximize allowable reimbursement. The provision also directs DHHS to recommend rates for ACH PCS and for SA based
upon cost reporting.
- Broad Medicaid Authority to Comply with Budget Reductions, Section 10.68A (a)-(d): S202
includes language providing the Division of Medical Assistance broad authority and flexibility to gain the savings budgeted. The DHHS Secretary is
granted flexibility in implementing the provider rate reductions, which is why this summary does not reflect a % cut. The rate reductions are at the
Secretary's discretion, according to the policies set in the provision. The provision also includes significant changes to the In-home PCS Program,
to the Mental Health Community Supports Program, and for consolidation of case management services.
Studies Bill
In most years, Senate and House members agree to study a number of issues raised during the
legislative session. Those issues arise from a number of sources, including unfinished legislation or issues identified through budget deliberations.
The possible studies are usually enumerated in a bill, called the Studies Bill. NCALA monitors the studies that are approved as they are identified by
the Senate President Pro Tempore and the House Speaker.
HB 945, STUDIES BILL
Summary: An Act to Provide for Studies by the Commission, Statutory Oversight Committees and Commissions, and Other Agencies, Committees and
Commissions.
History: 9/10/2009 - G Signed By the Governor 9/10/2009
09/10/2009 - R Chaptered Session Laws 2009-574
Web Link
Discussion
H 945 contains a number of proposals to study issues of interest to NCALA. Some of the studies originated from bills introduced or passed by
the General Assembly. Not all studies will occur, nor does the bill reflect all of the studies that could happen. The studies of interest in H 945 to
NCALA are listed below:
- Section 2.30—Feasibility and Advisability of Establishing "Cover NC" and Establishing the NC Health Insurance Market Choices Program—study may occur at the direction of Legislative Research Commission.
- Section 3.2—Validity of "Do Not Resuscitate" Orders Issued by a Physician in the Absence of a Declaration for Natural Death—study may occur by the Joint Legislative Health Care Oversight Committee.
- Section 14.1—Department of Health and Human Services, Division of Medical Assistance, may conduct a study of rate equity for medical providers.
- Section 15.1—The Department of Health and Human Services, Division of Health Service
Regulation and the Division of Aging and Adult Services, may conduct a study on the feasibility of requiring long-term care facilities to require drug tests on applicants for employment and on employees.
- Section 18.1—The North Carolina Institute of Medicine (NCIOM) may continue to study the work of its Health Access Study Group to study issues related to cost, quality, and access to appropriate and affordable health care for all North Carolinians.
- Section 20.1—The University of North Carolina Institute on Aging may conduct a study
regarding public guardianship services.
NCALA-opposed Bills that Were Not Acted Upon
Bills Posing Impediments to Adult Care Homes' Services
HB95, PERSONAL CARE SVCES/PATIENT CONSENT
Summary: An Act to Require Health Care Facilities to Give a Patient or Client the Option of Choosing to Have a Personal Care Services Provider be of
the Same Gender as the Client.
History: 02/12/2009 - H Withdrawn From Com.
02/12/2009 - H Referred To House Committee On Health, if favorable, Aging.
Web Link
HB 1055, MEDICAL RECORDS /COPYING FEE
Summary: An Act to Increase the Minimum Fee for Copying and Searching Medical Records.
History: 05/07/2009 - H Re-ref Com On Ways and Means/Broadband Connectivity.
Web Link
HB1622, HOME CARE LICENSE FEE/NEW LICENSE MORATORIUM
Summary: An Act to Impose an Initial License Fee for Home Care Agencies; and to Place a One-Year Moratorium on the Issuance of Licenses for New Home
Care Agencies.
History: 05/07/2009 - H Passed 1st Reading.
05/07/2009 - H Referred To House Committee On Aging, if favorable, Finance.
Web Link
SB752, AUTHORIZE RULES FOR FOOD SAFETY TRAINING
Summary: An Act to Authorize the Commission for Public Health to Adopt Rules to Require Food Safety Training for Owners and Operators of
Establishments that Prepare or Serve Food to the Public.
History: 03/24/2009 - S Referred To Senate Committee On Health Care.
Web Link
SB906, ESTABLISH ADULT DAY HEALTH OVERNIGHT RESPITE
Summary: An Act to Establish Adult Day Health Overnight Respite Programs and to Direct the Division of Medical Assistance to Pursue a Medicaid
Waiver to Provide Coverage for Respite Care.
History: 03/26/2009 - S Referred To Senate Committee On Health Care.
Web Link
Labor Union Supported Bills
HB175, STATE MINIMUM WAGE/INFLATION INCREASES
An Act to Provide for Automatic Adjustment of the State's Minimum Wage Based on Increases in the Consumer Price Index.
History: 02/18/2009 - H Ref To Com On Commerce, Small Business, and Entrepreneurship, if favorable, Appropriations.
Web Link
HB177, HEALTHY FAMILIES AND HEALTHY WORKPLACES ACT
Summary: An Act Providing for Healthy Families and Healthy Workplaces by Ensuring that All Workers Have Paid Sick Days to Address Their Own Health
Needs and the Health Needs of Their Families.
History: 02/18/2009 - H Ref To Com On Commerce, Small Business, and Entrepreneurship, if favorable, Health.
Web Link
SB178, REPEAL BAN G.S. 95-98
Summary: An Act to Repeal the Prohibition on Contracts Between Governmental Entities and Labor Organizations for the Purpose of Collective
Bargaining.
History: 02/17/2009 - S Referred To Senate Committee On Judiciary II.
Web Link
SB427, RESTORE CONTRACT RIGHTS TO STATE/LOCAL
Summary: An Act to Restore Contract Rights to State and Local Entities.
History: 03/05/2009 - S Referred To Senate Committee On State and Local Government. If fav, re-ref to Appropriations/Base Budget.
Web Link
SB781, WORKERS' COMP/CHOICE OF PHYSICIAN
Summary: An Act to Honor the Patient's Choice of a Physician When the Patient is an Employee Entitled to Compensation Under the Workers'
Compensation Act.
History: 03/25/2009 - S Ref To Com On Commerce.
Web Link
SB1016, STATE MINIMUM WAGE/INFLATION INCREASES
Summary: An Act to Provide for Automatic Adjustment of the State's Minimum Wage Based on Increases in the Consumer Price Index.
History: 03/26/2009 - S Ref To Com On Commerce.
Web Link
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In this Issue:
Legislative Update August 14, 2009
2009 Session of the North Carolina General Assembly Ends
With little fanfare, House Speaker Joe Hackney gaveled out the 2009 House Session at 1:30 PM on
August 11. Lt Governor Walter Dalton closed the 2009 Senate Session 30 minutes earlier. The path to adjournment became clear after lawmakers reached
agreement on the 2009-2011 Budget on August 5. The days that followed were filled with quick committee meetings leading to floor votes to dispose of
the session's "must do" bills. A complete summary of legislative activity of concern to adult care homes will be published in the coming
weeks.
2009 Budget Plan Becomes Law
North Carolina lawmakers gave final approval to S202, 2009 Appropriations Act, on
August 5, which was then signed by Gov Bev Perdue on August 7. The final budget compromise created a budget that appropriated more than $19 billion,
falling short of last year's budget by more than $2 billion. Embedded within the conference report are a myriad of cuts in education and health and
human services spending and changes to the tax code to generate $990 million in new revenues. Additionally, the budget includes federal stimulus
funds—Economic Stimulus Funds and American Recovery and Reinvestment Act funds—to address some ongoing budget obligations. Consequently, next
year's budget process will be more difficult and complex. To view the budget documents, please view http://www.ncleg.net/Sessions/2009/Bills/Senate/PDF/S202v8.pdf and http://www.ncleg.net/sessions/2009/budget/2009/JointConferenceCommitteeReport_SB202_2009_08_03.pdf.
2009 Budget Plan Becomes Law
S202 proposes changes to the collection of revenues to support the state's
operations. One change that provides a break to many taxpayers the provision to conform North Carolina's income tax calculation to the Internal
Revenue Code, generating a loss of revenue for the state at a rate of $116.3 million in FY 09-10 and $80.9 million in FY 10-11.
- Income Tax Surtax: scheduled to sunset January 1, 2011, the surtax is slated to generate almost
$173 million in FY 09-10 and more than $177 million in FY 10-11. It would apply to the following filers:
- No surtax for single filers up to $60,000, heads of households up to $80,000, married filing
separately up to $50,000 and married filing jointly or surviving spouse up to $100,000.
- 2% surtax for single filers between $60,000 and $150,000, heads of household between $80,000
and $200,000, married filing separately between $50,000 and $125,000, and married filing jointly between $100,000 and $250,000.
- All filers above the respective levels will be subject to 3% surtax.
- Income Tax Surtax for corporate filers: 3%, expiring January 1, 2011. It is expected to
generate more than $23 million in FY 09-10 and $25.5 million in FY 10-11.
- Sales and Use Tax: increased by 1%, estimated to generate more than $803 million in the first
year and more than $1 billion in the second year.
- Clarify state sales taxes to be collected by retailers; impose state sales tax on remote,
internet sales and click-throughs, digital products, magazines delivered by mail, ringtones, and downloads. These changes are slated to generate
almost $11.8 million in FY 09-10 and $24.1 million in FY 10-11.
- Increase "sin" taxes to generate $68.8 million in FY 09-10 and $93.8 million in FY 10-11, as
follows:
- Cigarettes: $0.10 more per pack
- Other Tobacco Products: 2.8% tax increase
- Beer: $0.05 per six-pack
- Wine: $0.04 per bottle
- Liquor: a 5% increase in the excise tax
- Finance Committees directed to study tax code revisions: The President Pro Tempore of the
Senate and Speaker of the House authorize the Finance Committees of the Senate and House of Representatives to meet during the interim between
legislative sessions to consider reforming North Carolina's tax structure to broaden the tax base and lower take rates.
Fee Changes
The budget proposes a number of fee changes in the area of Health and Human Services providers. The
total number of changes is expected to generate more than $1 million in each year of the biennium. Fee changes of interest follow:
- Increase annual licensure fee for adult care homes with fewer than 6 beds from $250 to
$315.
- Increase annual licensure fee for adult care homes with more than 6 bed from $350 to $360 plus
a per bed fee of $17.50, a $5 increase from $12.50 per bed.
- Impose an initial licensure fee for new providers. New adult care homes would be charged a new
initial licensure fee as follows:
- Adult care homes with fewer than 6 beds: $350.
- Adult care homes with more than 6 beds: $400 plus a per bed fee of $19.
- Imposition of Medicaid provider enrollment fee: establishes a $100 provider enrollment fee,
payable when a provider initially enrolls in the Medicaid program and then once every three years. This change anticipates generating $1.5 million in
savings in each year of the biennium.
Health and Human Services
The Health and Human Services Budget was funded at nearly $4 billion in FY 09-10 and more than $4.3
billion in FY 10-11. HHS budget cuts for FY 09-10 ran to almost $700 million in recurring funds and to almost $1 billion in nonrecurring funds. HHS
budget cuts for FY 10-11 ran to almost $1 billion in recurring funds and almost $560 million in nonrecurring funds. More than 506 jobs were cut from
HHS in both years of the biennium. These figures do not reflect the federal dollars matching the state's contribution to the Medicaid program. Key
among the funding and program changes are the following items:
Cuts
- Reduce State/County Special Assistance Rates, cutting nearly $2.3 million in FY 09-10 and
nearly $3.3 million in FY 10-11. Effective October 1, 2009, this cut will roll back 75% of the increase for low-income seniors in adult care homes
from the $34-per-month increase received January 1, 2009, to about $8.50 per month, effective October 1, 2009.
- Mandate use of Web-based PASARR, mental health Web-based preadmission screening tool for
nursing homes and for adult care homes, expected to generate $350,000 savings in each year of the biennium.
- Provider rate reductions, cutting more than $76 million in FY 09-10 and more than $82 million
in FY 10-11 from Medicaid provider rates. The cut applies to all public and private providers except for federally qualified health centers, rural
health centers, school-based and -linked health centers, state institutions, hospital outpatient, pharmacy and the noninflationary components of the
case-mix reimbursement system for skilled nursing facilities.
- Modification of Personal Care Services Benefits, generating savings of $40 million in FY 09-10
and $60 million in FY 10-11. This provision is primarily aimed at in-home PCS.
- Reduce Prescription Drug Costs, generating savings of $25 million in FY 09-10 and $22 million
in FY 10-11. The provision would employ enhanced utilization management of the prescription advantage list (PAL), increase utilization of generic
drugs in lieu of brand name drugs, and increase collection of rebates from manufacturers on generic drugs. Should the anticipated savings not be
realized, the DHHS Secretary shall implement a preferred drug list for all drugs in Medicaid, including generics and brand name drugs that offer
supplemental rebates.
- Reimbursement for prescription drugs: the formula for reimbursing pharmacies for prescription
drugs will change from average wholesale price less 10% to wholesale acquisition cost plus 7%. This change is expected to generate savings of more
than $10 million in FY 09-10 and almost $14 million in FY 10-11.
- Durable Medical Equipment cut: cuts funding for this line item by $3.5 million in FY 09-10 and
by $4.2 million in FY 10-11.
- Increase copayments on all Medicaid services by $2, expected to generate savings of more than
$3 million in FY 09-10 and $3.7 million in FY 10-11.
- Increase anticipated CCNC Savings: cuts appropriations to Community Care of North Carolina by
due to anticipated savings generated by greater management of care. This change budgets savings of almost $70 million in FY 09-10 and more than $78
million in FY 10-11.
- Nursing Home Cost Ceiling reduction: nursing homes' reimbursement cost ceiling is reduced from
103.5% of the state median cost to 102.6%, generating savings of almost $2.3 million in FY 09-10 and more than $2.4 million FY 10-11.
- Annual issuance of Medicaid cards: this change goes from a monthly to an annual issuance of
Medicaid cards, budgeting $1.75 million in savings in each year of the biennium.
- Medical Assistance Payments: budgeting use of federal recovery funds in lieu of state funds in
FY 09-10 and in FY 10-11, estimating savings of almost $860 million in the first year and almost $503 million in the second year. If the state's
economic recovery lags beyond 2011, lawmakers will have a significant hole in the Medicaid program to address in FY 11-12.
HHS Policy Changes
The budget sets out a number of significant policy changes in the area of Health and Human Services,
including the following:
- Immunizations: the budget clarifies that local health departments may administer immunizations
at no cost to patients who are uninsured or underinsured and have family incomes below 200% of the federal poverty level. The provision further
clarifies that health care providers who receive vaccines from the state may charge an administration fee that is no more than allowed by the
Commission for Public Health, Section 10.29A(a) and (b).
- Medicaid prescription drug policy: Section 10.58. (d)(28): The prescription drug reimbursement
process for Medicaid continues to include a $5.60 dispensing fee for generic drugs and $4.00 for brand name drugs. The provision covers other details
of interest to the pharmacy community, including provision for enhanced fees for pharmacy services, limitations on quantity, encouragement of
dispensing of generic drugs, prior authorization and protections from substitution of generic prescriptions for certain drugs to treat mental
illness.
- Preferred Drug List, Section 10.66 (a)-(d): S202 provides to the DHHS Secretary the authority
to implement a preferred drug list in the event that drug utilization management efforts alone do not yield the savings budgeted by June 1, 2010. The
provision sets out the procedure for implementation of the PDL.
- Further clarification of Medicaid orthotics/prosthetics provision: Section
10.58(d)24.
- State/County Special Assistance, Section 10.57. (a)-(e): The budget sets out the rates for
adult care homes and special care units for Alzheimer's and dementia residents. Additionally, the provision sets directs DHHS to review the ACH
personal care services programs to maximize allowable reimbursement. The provision also directs DHHS to recommend rates for ACH PCS and for SA based
upon cost reporting.
- Broad Medicaid Authority to Comply with Budget Reductions, Section 10.68A (a)-(d): S202
includes language providing the Division of Medical Assistance broad authority and flexibility to gain the savings budgeted. The DHHS Secretary is
granted flexibility in implementing the provider rate reductions, which is why this summary does not reflect a % cut. The rate reductions are at the
Secretary's discretion, according to the policies set in the provision. The provision also includes significant changes to the In-home PCS Program, to
the Mental Health Community Supports Program, and for consolidation of case management services.
For more information about the North Carolina General Assembly, or to identify your legislators,
please visit www.ncleg.net. For more information on these and other legislative issues, please
contact NCALA, or Evelyn Hawthorne by e-mail: evelynhawthorne@nc.rr.com or by phone at (919) 523-9096.
©2009 Evelyn Hawthorne Government and Public Relations
Medicaid Electronic Claims Submission Agreement
Adult Care Providers: If you are not currently filing your Medicaid claims electronically, please be
aware that NC will soon require you to do so. There is no firm "effective date" in place at this time, but we have heard rumblings of a September
timeframe. If you don't currently have an Electronic Claims Submission Agreement on record, you need to act on this quickly, so as not to have
any payment delays.
Read this section
of the July Medicaid Bulletin if you need additional information. Providers may obtain a copy of the ECS Agreement for either a group or an
individual by visiting CSC's Provider Enrollment Web site or DMA's Web site.
House Bill 1068 Mandated Training
DHSR will be offering statewide House Bill 1068-mandated training during the month of September
2009. The primary goal of this workshop is to promote a higher degree of understanding between the providers and regulators and to reduce
inconsistencies in the survey process. View the training
announcement memo and the training brochure and
registration form.
NOTE TO MEMBERS:
If you receive a deficiency-free survey during 2009, please notify NCALA. All members receiving deficiency-free surveys will be highlighted on the home page of the NCALA Web site.
See the Complete NCALA Training Schedule
Go to online NCALA Member Directory
Go to the NCALA Home Page
View older editions of The NCALA Advisor