In this Issue:

Legislative Update December 8, 2009

Legislative Update December 8, 2009

Medicaid Budget Running Short

North Carolina's Secretary of the Department of Health and Human Services, Lanier Cansler, met Dec 1 with Medicaid services providers to report that the Medicaid budget is running short. Secretary Cansler called the meeting to break the news to providers himself, rather than having service providers, whom he treats as partners in the Medicaid program, from news media.

DHHS is responding to the downturn by stepping-up some cost saving measures, including acceleration of the prior authorization initiatives for services, to generate the budgeted $1 billion in savings needed to keep this year's budget in check. Secretary Cansler indicated that implementing such strategies, which were included in NC's 09-11 Budget (S202), is taking longer than expected due to a lengthier than anticipated approval process by federal agencies.

Secretary Cansler responded to provider questions about the prospect of another round of provider rate cuts by saying that neither he nor Gov Bev Perdue support further rate cuts as a savings option. The Secretary said that he told legislative leaders that he would not support additional rate cuts because he believed that "we are already getting close to health and safety issues" as a consequence of the cuts already implemented. He also said that he would not support delaying payments because the next fiscal year will likely be worse than the current year. Postponing payments would only put off reconciling the problem to an even worse fiscal situation.

Secretary Cansler reiterated that "North Carolina is really in unprecedented times. We are doing everything we can (to manage costs) without damaging the health care system or access to care."

The Details

The Secretary indicated that Medicaid had spent half its budget within the first five months of FY 09-10, about $150 million ahead of projections. Medicaid spending is running nearly 9% ahead of last year's rate. Should spending continue on that trend, Medicaid will close the fiscal year short by at least $150 million; however, unforeseen events could increase the shortfall.

Economic factors are the prime catalyst in the spending increase. The higher number of Medicaid enrollees is due to job losses. Inflation triggered higher-than-budgeted costs-per-claim. Secretary Cansler indicated that trends are projecting more than 18,000 new enrollees, a nearly 10% jump, over budgeted amounts. Costs per enrollee are increasing as well, at 4% more than budgeted. Utilization of services also is slightly up over projections, at about a quarter of a percentage point.

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 Peggy Smith, or Evelyn Hawthorne by e-mail: evelynhawthorne@nc.rr.com or by phone at (919) 523-9096.

Legislative Update November 9, 2009

Resignations, Retirements Rock State Government

Although the General Assembly is not in session, several events and announcements set political observers' tongues wagging. A flurry of legislators' resignations and retirement announcements on the heels of the August adjournment grabbed headlines and attention away from most other state government activity---and even upstaged the Governor.

Among the legislators who announced that they won't seek reelection, are Rep Melanie Wade Goodwin (D-Montgomery) and Rep Ray Warren (D-Alexander). Ty Harrell resigned his State House seat following an investigation by the State Board of Elections into his use of campaign funds. Chris Heagarty (D-Wake), former director of the NC Center for Voter Education, was appointed in his stead. David Weinstein was tapped by Gov Perdue to lead the Highway Safety Program, and businessman Michael Walters (D-Robeson) was selected to fill his State Senate seat.

Sen Tony Rand (D-Cumberland), announced on Nov 5 that he was resigning and sent shockwaves through the "inside the beltline crowd." One of the most politically powerful North Carolinians, Sen Rand said that he accepted Gov Perdue's request to head the State Parole Board, would leave the Senate, and vacate his powerful roles as Senate Majority Leader and Chairman of the Senate Committee on Rules by the end of 2009. Speculation in political communities ensued immediately about who would succeed Sen Rand in the roles as Majority Leader and Rules Committee Chairman. Two candidates instantly emerged---Sen Martin Nesbitt (D-Buncombe) and Sen Dan Clodfelter (D-Mecklenburg). Sen Nesbitt secured the endorsement of the Senate leader, President Pro Tempore Marc Basnight (D-Dare), which was published in the Asheville Citizen-Times, by week's end. Senate Democrats will caucus later in November to decide.

Sen Nesbitt, an attorney, is in his third Senate term, and previously served 11 terms in the State House. He is a former Co-chair of the House Appropriations Committee and was key to orchestrating the election of Dan Blue, currently a State Senator, as House Speaker from 1991 to 1994. He has been active in health and education issues and is a supporter of unions. Sen Dan Clodfelter, an attorney, is serving in his sixth Senate term. He presently co-chairs the Senate Finance Committee and is leading efforts to restructure North Carolina's tax system. Sen Clodfelter could be tapped to chair the Senate Rules Committee, which would depart from the practice of one person holding both the Majority Leader and Rules Chairman posts, as Sen Rand had.

These resignations and retirements will not be the last. Who stays and who leaves the legislature could determine North Carolina’s balance of power. The 2010 election will be critically important to North Carolina’s future because of the extraordinary issues lawmakers will face. The General Assembly seated in January 2011 will draw the legislative and congressional districts that will be in place for the following decade. At the same time, revenue projections indicate that North Carolina’s budget woes will likely continue well beyond 2011, without federal stimulus and recovery funds to help make ends meet.

In this Issue:

Meet the New NCALA Executive Director, Peggy Smith
2009 NCALA Fall Conference & Trade Show Wrap-up

Meet the New NCALA Executive Director, Peggy Smith

As the Executive Director for the North Carolina Assisted Living Association, Peggy Smith has been charged by the Board of Directors to provide leadership to the organization, advance the association, and attract new membership.

Previously, Peggy was the Program Director for the Alzheimer's Association---Eastern North Carolina Chapter, where she was primarily responsible for coordinating family and professional education throughout the eastern part of the state (51 counties). She had also served as the Education and Family Services Coordinator with the Chapter. Over the past 10 years, Peggy led a caregiver support group and had most recently led an early stage support group for individuals with Alzheimer's disease offered at the Chapter office. Peggy Smith

Prior to joining the Alzheimer's Association, Peggy worked in several roles serving the aging population---as both an Assisted Living Activity Director (The Meadows in Durham, NC) and Administrator (Shepherd House in Chapel Hill, NC) and then as a Program Manager of an adult day health program (Central Orange Adult Day Health Program in Hillsborough).

Before moving into the aging field, Peggy was with Special Olympics North Carolina for ten years of her professional career, where she served as Vice-President of Programming. Her last role was serving as the Head of Delegation for the state of North Carolina at the 1999 World Special Olympics Games held in Raleigh.

2009 NCALA Fall Conference & Trade Show Wrap-up

The 2009 NCALA Conference was an overall success. Thank you to everyone who attended this year!

We have a few photos up now (Hero and Caregiver Awards photos are here), and we'll have the rest up soon. If you want a high-resolution copy suitable for printing, take note of the image file's name and send an e-mail to Ward Conant, our IT Manager, and he will arrange to deliver a high-resolution electronic copy of the image(s) that you request.

In this Issue:

New NCALA Executive Director!
The Revised SA Rate
2009 NCALA Fall Conference & Trade Show
Summary of Legislative Action and Policy Changes 2009

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.

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

In this Issue:

Legislative Update August 14, 2009
Medicaid Electronic Claims Submission Agreement
House Bill 1068 Mandated Training

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

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

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.

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.

In this Issue:

Legislative Update August 3, 2009

Legislative Update August 3, 2009

Lawmakers Close to New Budget Agreement

Reports from the conferees on the finance package for the 2009 NC Budget bill indicate hope. Sen David Hoyle (D-Gaston) and Rep Paul Luebke (D-Durham) both indicated that they are close to agreeing on a tweaked version of the finance package previously rejected by Gov Bev Perdue. Sen Hoyle indicated that he felt the new package will address the concerns raised by the governor last week.

Finance Package in a Nutshell: The new package changes the proposal to impose a temporary surtax on personal and corporate income taxes. Instead of the temporary 2% surtax, the new proposal is to impose a temporary 3% surtax on corporate income tax and on higher income returns at $250,000 and up. The temporary personal income tax surcharge on returns from $60,000 to $250,000 would be 2%, with no surcharge at all below $60,000. The proposal includes the following items included in the last proposal:

State sales tax increase of 1%, estimated to generate more than $803 million in the first year and more than $1.61 billion in the second year. Impose sales tax on digital products and "click throughs" estimate to generate about $11 million.
Increase "sin" taxes 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.

Gov Perdue did not indicate definitively whether or not she would accept the new proposal and again raised the concern about cuts in education and the budget's impact on working families. Early in the week, she reportedly asked lawmakers to raise another $200 million to address the education cuts.

Continuing Saga, Continuing Resolution: In the meantime, House and Senate members approved third temporary budget resolution on July 30. The new "CR" is H102 and departs from previous measures by not including an expiration date. The measure would expire when a permanent budget is adopted. The bill also has other significant differences, including authorizing the state Budget Director to implement cuts to which House and Senate members agreed as indicated in S202. Additionally, H102 has a provision that allows LEAs to use American Recovery and Reinvestment Act (federal stimulus) funds to address staffing issues for the upcoming school year. The funding levels for the temporary measure would continue at 84% of last year's budget. Gov Perdue must sign the bill by midnight of July 31, when the previous CR expires. Should the budget deliberations can go on indefinitely, the governor would be responsible for making the adjustments necessary to comply with the Constitutional mandate to keep the state budget balanced. To read the bill, please view http://www.ncleg.net/Sessions/2009/Bills/House/PDF/H102v3.pdf.

Adult Care Homes' Funding To Be Cut

NCALA learned on July 30 that NC legislators will likely cut funding for adult care home residents who receive State/County Special Assistance in the final budget proposal. The increase that adult care homes received in January of $33 per month will likely be cut by 75% to a rate of about $9-$9.50 per month. This is a small improvement over previous proposals, but is a far cry from NCALA's pleas to restore the funding. It appears that the SA cut will be $2,260,521 in FY 09-10 and $3,286,281 in FY 10-11, down from the House's suggestion to fully roll-back funds at a rate of $3,286,280 in FY 09 and $4,381,701 in FY 10-11.

In addition, NCALA has learned that Medicaid providers will experience an average cut of just under 3%, although the Secretary of Health and Human Services will have flexibility and discretion in application of the cuts. NCALA will lobby DHHS Secretary Lanier Cansler to hold adult care homes harmless, given that these providers have not had a PCS rate increase in four years.

In this Issue:

Legislative Update July 28, 2009
The VA Improved Pension Benefit

Legislative Update July 28, 2009

Perdue Stops Budget—Legislators Regroup

After reaching agreement on the finance package for the 2009-2011 North Carolina Budget on July 22, lawmakers were stopped in their tracks when Gov Bev Perdue announced that she found the proposal unacceptable on July 23. Gov Perdue specifically cited her objection to lawmakers' proposal to impose a 2% temporary surcharge on personal income tax, which would have generated about $200 million of the nearly $1 billion in revenues. North Carolina's budget is running short by about $4.7 billion.

Earlier in the week, lawmakers worked primarily to reach an accord on the finance side of the budget equation. Although lawmakers agreed a week ago on the budget targets, they struggled to agree on how to generate the funds to meet the targets. Senate members wanted to take the revenue crisis as a reason to modernize the tax structure; House members wanted to focus on the immediate task. What lawmakers agreed to was spreading the tax pain across multiple payers as follows:

Temporary 2% surtax on personal and corporate income. Personal income tax surcharge estimated to generate about $200 million; corporate income tax surcharge estimated to generate about $17 million.
State sales tax increase of 1%, estimated to generate more than $803 million in the first year and more than $1.61 billion in the second year. Impose sales tax on digital products and "click throughs" estimate to generate about $11 million.
Increase "sin" taxes 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.

Gov Perdue specifically objected to imposition of both the sales tax increase and the personal income tax surcharge, which she stated disproportionately impacted working families. She also said that cuts to education were too severe and restated her belief that lawmakers needed to raise another $200 million over what was proposed to address the problem. Gov. Perdue made it clear that the proposal would not be accepted—read, vetoed—and lawmakers plan to return to the negotiating table July 27. House and Senate members will likely unveil a third temporary budget resolution early during the week of July 27 because resolution of a new finance package is unlikely prior to the July 31 expiration of the current continuing resolution.

NC Medicaid Must Return $300 Million to Feds

The NC Department of Health and Human Services reported Friday that they overbilled Medicaid by more than $300 million. DHHS Secretary Lanier Cansler said that the cause was public hospital billing errors that originated eight months ago. The Center for Medicare and Medicaid Services has worked out a payment program with NC DHHS and $200 million will be repaid by the end of July. No comment was made about how the billing error will be reconciled and how it will affect the state's budget troubles. In the meantime, this situation, coupled with the need to reconsider the budget, could forecast additional budget cuts particularly in the Health and Human Services area. While details of the previous budget were not released publicly, Medicaid providers were on notice that they would stand to bear cuts in reimbursement in addition to some specific program cuts. With the additional $300 million out of the DHHS budget, how the money will be made up remains to be seen.

Time Is Critical to Plead Case to Restore SA Funds For Adult Care Homes

Because of the extension of time to negotiate the state budget, there is still time to ask budget conferees to restore funding for State/County Special Assistance for adult care home residents.

NCALA reported that Health and Human Services budget conferees had reversed the proposal to reduce the cut to State/County Special Assistance. NCALA has asked conferees to find a way to restore the SA funds. The cut, which would roll back SA to pre-January 2009 rates, would amount to a $33-per-month cut in funds for food, utilities, and shelter for low-income residents of NCALA member communities.

Budget conferees must hear from NCALA members. Please contact your legislators immediately to ask them to restore funding for State/County Special Assistance and thank them for restoring funding for Medicaid PCS for adult care homes. Please make clear that the SA cut will hurt low-income seniors by making make it harder to pay their bills. NCALA Interim Director Christine Stempel shared talking points with members last week. Please contact NCALA or Evelyn Hawthorne for more information. Most importantly, please share feedback from your contacts!

The VA Improved Pension Benefit

As a new member to NCALA, I would like to share with all of our members how we are helping communities and their residents. In this economically difficult time, we are showing communities how their current and future residents can receive up to $23,396 per year tax-free to assist them with their long-term care expenses.

The VA Improved Pension benefit is substantial—up to $1,950 per month, tax-free—and is available to veterans and their surviving spouses. One out of three seniors could qualify for this benefit!

We will be sponsoring the session titled, "Dementia Care for America's Heroes" at the 2009 NCALA Fall Conference. As a US Marine Veteran and the nephew of a Korean War Veteran diagnosed with Dementia, I take extreme pride and care in serving our nation's veterans and their families.

Nearly all veterans, or their spouses, in senior communities are eligible, yet only a small percentage of them are receiving this benefit. We can help you qualify your current and future residents for this benefit.

Our service is of great value to your residents. It can also be of equal value to you:

1. It allows your current residents to remain on private pay longer.
On average, this benefit can extend the time residents remain on private pay by 8 years or more.

2. It can assist you in attracting future residents.
By showing the families how they can receive up to $1,950 per month, we add service and quality to your community as well as the financial reassurance that the potential residents can now afford to move into your community.

3. Allows your community to be the last community the family tours.
When a potential resident who has served in our Armed Forces tours your community, we will meet with the family at your community and begin the qualifying process. By meeting with the potential resident at your community, the family has been able to visit and experience your community for a second time. With the family becoming more comfortable with you and your community along with the financial burden that you have helped alleviate with the VA benefit, our experience is the family has no need or desire to continue searching for the right community for them.

4. Attracting future residents from the outside community.
If you would like to market to seniors in your area, we can provide presentations and suggested advertisements to attract potential residents who believe they do not have the finances to transition to assisted living. Statistically, one out of three seniors could qualify!

A few of the communities we work with include The Carriage Club of Charlotte, Wilora Lake Lodge, Terrace Ridge, and Atria Merrywood.

Contact me if you would like more information and to see how many of your current or future residents could benefit. I hope to meet as many members as possible before the Fall Conference and work together in better serving North Carolina's veterans.

Aaron D Cantley
(704)841-3892
Toll Free (888) 660-6864
Fax: (888) 330-3238
acantley@veterans-retirement-benefits.com

In this Issue:

Legislative Update July 20, 2009

Legislative Update July 20, 2009

SA Cuts For Adult Care Homes Still "On the Table"

Budget conferees need to hear from NCALA members. Please contact your legislators immediately to ask them to restore funding for State/County Special Assistance and thank them for restoring funding for Medicaid PCS for adult care homes. Please make clear that the SA cut will hurt low-income seniors by making make it harder to pay their bills. NCALA Interim Director Christine Stempel shared talking points with members last week. Please contact NCALA or Evelyn Hawthorne for more information. Most importantly, please share feedback from your contacts!

To identify your legislators and to find their contact information, please visit www.ncleg.net.

Continuing Resolution Déjà Vu

The flurry of efforts to reach a final budget agreement last weekend fizzled into another round of legislative stalemates. As a result, House and Senate members revisited the need to extend the current budget authority for a while longer—this time, until July 31, 2009. Initially, it appeared another fight would emerge over H1504. The original version of H1504 would transfer the NC Center for the Advancement of Teaching to the State Board of Education. Senators morphed it into a new bill, H1504, Continuing Budget Authority. The new "CR" looks similar to the old one, with a couple of differences. The CR funds state government at 84% of last year's budget instead of 85% as was the case in the previous CR. The expiration date is changed to July 31, 2009. Whether or not lawmakers will be able to complete work in the budget by the end of July remains to be seen. The CR became effective on July 15 after passage by both Chambers and approval by Gov Perdue.

In the meantime, conferees on S202, Appropriations Act of 2009, continue to work. The major obstacle to a budget agreement continues to be the inability to resolve the finance package. At the same time, appropriators are revisiting items to see if there are any additional cuts to be taken or savings to be garnered.

Just a follow up to be sure that e-mails are being sent and phone calls being made by each of you who will be impacted by this SA funding decision. There is a small window of opportunity to restore SA funding for low-income seniors in adult care homes, but as providers you need to speak up NOW and present your case! (See e-mail below to review critical points). Be sure to try hard not to simply leave a message with a legislative assistant, but to press for an opportunity to speak directly to the member him/herself. It makes a very real difference!

To help coordinate our efforts, please let NCALA know which senators and/or representatives you have personally contacted and what the response was from each member. You can send a quick e-comment to me directly at christine@ncala.org, or to Evelyn Hawthorne at evelynhawthorne@nc.rr.com.

I am linking to the listing of contacts for the House and Senate Appropriations Committees for your referral. Note that one correction has been made for the name and contact info for Vice Chair of Senate Appropriations on Health and Human Services.

Thanks for all the continued and timely efforts you are making to help with this critical issue!

Christine Stempel, Interim Director
North Carolina Assisted Living Association
3392 Six Forks Road
Raleigh, NC 27609

Phone: (919) 467-2486
Fax: (919) 467-5132
Web: http://www.ncala.org

Sent: Tuesday, July 14, 2009 4:28 PM
Subject: We need your Voice today -- help recover SA funds!

Are you aware that there is currently a proposal in the HHS budget to roll back the State County Special Assistance (SA) rates to pre-January 2009 rates? As an assisted living community, you received a $33-per-month increase in SA for the low-income seniors you serve. If this proposal passes, you will lose this rate increase, despite the steady increases in food, fuel, and utility costs that you are experiencing and absorbing. (And it is a known fact that even with the increase in place, adult care homes do not receive full compensation for costs.)

Budget challenges are a very real issue this year, as dwindling resources are forcing cuts in many essential areas. The result of cutting SA will be that many low-income seniors will move into nursing homes. It is a fact that nursing homes cost North Carolina, on average, twice as much to house a low-income senior than do adult care homes. Cutting SA simply does not make sense.

What will be the impact of a cut in SA rates on your community? Will you be able to continue to provide your standard of high quality care to low-income seniors, or will you be forced to limit or stop serving this population altogether?

Budget negotiations are underway NOW ... Please take a few minutes today and over the next few days to reach out to your state senators and representatives who are controlling these funds. Ask them to avoid this cut and restore funding for low-income seniors in the SA program. Tell them the very real impact that loss of these funds will have on the very real low-income residents who live in your community.

A listing of contacts for the House and Senate Appropriations committees is attached for your immediate reference.

PLEASE make these calls a priority, for our low-income seniors and for your business.

In this Issue:

Legislative Update July 14, 2009

Legislative Update July 14, 2009

BREAKING NEWS—Lawmakers Progressing Toward Budget Agreement

General Assembly sources are reporting that House and Senate members reached tentative agreement on budget and finance parameters. According to reports, lawmakers agreed to an $18.9 billion spending package accompanied by a $990 million revenue plan. Subcommittees—including Education and Health and Human Services—would likely be presented with the opportunity to adjust their spending plans based upon new budget targets. If agreements hold, a final budget agreement could be approved just on the heels of the expiration of the continuing resolution, enabling the continued operation of state government on a temporary basis, which expires July 15.

In this Issue:

Legislative Update July 6, 2009

Legislative Update July 6, 2009

Proposal for SA Cuts for Adult Care Homes Confirmed

Last week, NCALA reported about rumors that Health and Human Services budget conferees had reversed the proposal to reduce the cut to State/County Special Assistance. Those rumors were confirmed to be true after discussions with one Senate conferee, Sen Doug Berger (D-Franklin). Sen Berger expressed dismay at the cut and the strong desire to restore the funding should additional funds become available.

NCALA asked conferees to find a way to restore the SA funds. The cut, which would roll back SA to pre-January 2009 rates, would amount to a $33-per-month cut in funds for food, utilities, and shelter for low-income residents of NCALA member communities. At the same time, NCALA thanked Sen Berger and the other conferees for restoring funding for adult care homes PCS.

NCALA asks members to please contact their legislators immediately to ask them to restore funding for State/County Special Assistance and thank them for restoring funding for Medicaid PCS for adult care homes. Please make clear that the SA cut will hurt low-income seniors by making make it harder to pay their bills.

For more information about the North Carolina General Assembly, or to identify your legislators, please visit www.ncleg.net.

NC Lawmakers Approve Stopgap Budget Measure

Recognizing the inability to approve a 2009-2011 North Carolina budget by the end of the fiscal year on June 30, lawmakers approved S311, Continuing Budget Authority on June 30. The bill enables continued operation of state government past the end of the fiscal year until a permanent budget is approved. Gov Perdue signed the bill on June 30, which expires on July 15, after which a new budget needs to be in place or another extension will need to be approved.

Meanwhile, the fire of the budget debate was stoked a little more on July 1 when the Senate displaced all House bills on its calendar, stalling the progress of House policy bills. This move is often called a "chicken" game or "holding bills hostage" to force agreement on a matter—in this case the budget—and usually occurs at this time of year. The House is expected to return the favor.

The major obstacle to reaching an accord on the budget is the inability of the Senate and House Finance chairpersons to agree on a plan to address the revenue shortfall. Reports are that House Members and Senators cannot reach agreement on the amount of taxes they need and are far apart on their approaches on attaining them. In the meantime, Gov Perdue has challenged lawmakers to quickly conclude their budget deliberations and to address the growing deficit, which she says now exceeds $4.7 billion. She publicly pointed out that delaying implementation of a new revenue plan costs the state a minimum of $5 million per day.

Lawmakers adjourned for the week of July 2 and are expected to resume work when they return to Raleigh on July 6.

Do You Know Your Legislators?

Knowing who represents you in Raleigh is paramount to ensuring that your voice is heard! Do you know which legislators represent your communities? If not, let NCALA help you invite your legislators to visit you, your residents, and your staff.

Hosting a legislative event or visit is easier than it sounds, and NCALA will help you every step of the way. Are you hosting a special event this Spring or Summer? If so, invite your representatives to join in the celebration.

Contact NCALA for more information on who your legislators are and how to host a visit or event with them.

In this Issue:

Legislative Update June 29, 2009

Legislative Update June 29, 2009

SA Cuts For Adult Care Homes Under Consideration—Again!

Reports circulated that lawmakers reached agreement on some pieces of the new state budget, despite the fact that leaders have not determined how to gain the revenues needed. Reports out of the Health and Human Services budget conferees are that they produced a balanced spending plan, although it is riddled with cuts. HHS conferees shifted focus to the special provisions that direct how the money is to be spent.

The latest information on the items of interest to adult care homes reflects changes from last week. Most notably, the proposal to reduce the cut to State/County Special Assistance was reversed. On the other hand, the proposal to reduce Medicaid PCS in adult care homes was eliminated. Other items follow:

Rollback of State/County Special Assistance rates to pre-January 2009 rates: Assisted living communities that received in January a $33-per-month increase in SA for the low-income seniors they serve will lose the increase, despite the increased costs of food, fuel, and utilities that all businesses experienced. NCALA is especially concerned about this cut because it will adversely affect the cost of room and board for low-income seniors.
Restore funding for adult care homes' Medicaid PCS: Previously, the proposal was to cut ACH PCS funding by $10 million.
Across the board cuts for all Medicaid providers: An actual cut is still in play, but the latest word is that the rate cut will be 3% or more in each year.
Reduce reimbursement for Prescription Drugs: The proposed budget would affect Long Term Care Pharmacies as well as community pharmacies by changing the reimbursement for prescription drugs from Average Wholesale Price (AW) - 10% to Wholesale Acquisition Cost (WAC) + 7%. This change is expected to generate almost $10.5 million in savings this year and almost $14 million next year.
Reduce Prescription Drug Costs: The proposed budget would plan for overall reductions in the prescription drug program by an additional $30 million in each year. No specifics are indicated about how those savings are to be achieved and it appears the details are still in the works.
Instead of a single source for DME purchases: The budget reduces reimbursement for DME and allows vendors who are willing to meet the price to participate in the program.
New and increased licensure fees: Virtually no provider escapes a fee increase or, if they didn't pay a fee, they will. New fees are proposed for Medicaid providers of $100.

Revenue Woes Stymie NC State Budget Accord, Stopgap Measure in Play

Lawmakers acknowledged this week that the chances of passage of a 2009-2011 North Carolina budget by the end of the fiscal year on June 30 grew slimmer with the passage of each day. Senators unveiled S311, Continuing Budget Authority on June 23 and passed it to the House of Representatives on the same day. Commonly referred to as "continuing resolutions, or CRs," such bills are designed to enable the continued operation of state government past the end of the fiscal year until a permanent budget is approved. The Senate's version of the bill would extend the effective date of last year's budget indefinitely, until a new budget becomes law. The Senate's version of S311 would provide funding at 85% of last year's budget, due to the revenue shortfall. In the meantime, House leaders insisted that they would not accept an open-ended CR, and on June 25 produced an amended version of S311 that included an expiration date of July 15. The House is expected to vote on the CR on June 29. If the House version is approved, the Senate will have to consider accepting the House's amendments.

The major obstacle to reaching an accord on the budget is the inability of the Senate and House Finance chairpersons to agree on a plan to address the revenue shortfall. Gov Beverly Perdue has traveled the state making a case for $1.5 billion in tax increases. Reports are that House members and Senators cannot reach agreement on the amount of taxes they need and are far apart on their approaches on getting them. The House plan addresses income tax increases on higher wage earners and the corporate tax structure. Senators, who have yet to make public their plan, want to look at lowering the overall tax rate, but taxing more items, such as services and sin taxes.

In this Issue:

Legislative Update June 11, 2009

Legislative Update June 11, 2009

House Partially Restores Funding for Adult Care PCS

Clearly, NCALA's messages to House members got through!

After much negotiating, arm twisting, and persuasion, the House Health and Human Services Committee proposed on June 10 to partially restore funding for adult care homes' PCS. Medicaid provider rates, which were slashed by 5.5% in FY 09-10 and by 6% in FY 10-11, are proposed to be partially restored to 3.06% in FY 09-10 and 3.56% in FY 10-11. The restoration of funding for these proposals is, however, dependent upon passage of the House's finance package. NCALA commends Rep Bob England, MD (D-Rutherford) for his efforts to restore funding for these services!

On June 9, during the debate over S202 in the House Appropriations Committee, NCALA worked with Rep Jean Farmer-Butterfield (D-Nash) to delete a provision which would have placed a moratorium on new Special Care Units in adult care homes. Earlier in the deliberation, Rep Verla Insko (D-Orange) passed an amendment that would have further complicated the moratorium. Rep Farmer-Butterfield listened to NCALA's concerns that the moratorium would result in unfairly impeding providers' ability to serve low-income seniors who suffer with Alzheimer's disease. She also was sensitive to the considerable savings to the state garnered by serving low-income seniors in less costly and more appropriate adult care homes. The only other alternative—nursing homes—cost the state almost twice as much as ACH's SCUs. Rep Farmer-Butterfield's amendment passed unanimously. NCALA commends Rep Farmer-Butterfield for her leadership on aging issues and her willingness to stand up for NCALA's members, on this matter in particular.

Next Steps

The House of Representatives will vote on June 11 on the combined House budget and finance proposals, S202. The vote is expected to be very close because some members will not support any measure that could be called a tax increase. If S202 passes the House on separate votes today and tomorrow, the bill will be considered by the Senate, which is expected to put the bill into a Conference Committee to resolve the differences between the House's proposal and the original Senate version. The original Senate version was passed months ago, without the information about the April revenues, which were substantially below estimates. Furthermore, the Senate finance package has not yet emerged. Senate Finance leaders had released an outline of their proposal but, to date, no bill has been released. So, how Senators will react to the House's Finance package remains to be seen.

This bill has a long way to go.

Background

Last week, House subcommittees reported "without prejudice" a proposed budget with drastic and severe cuts in state services and provider reimbursement. The full House Appropriations Committee put those pieces together on June 9. In the meantime, House lawmakers worked to craft a proposal to produce revenues that could garner sufficient votes to pass the House. The House Finance Committee rolled out a draft on June 9, including a slate of service taxes, income tax increases on wage earners over $200,000, new corporate taxes, and loophole closures. On June 10, House budget subcommittees met to consider program restorations, incorporating the new revenues made available through the proposed finance package.

The latest version of S202 included the following provisions, which are of interest to NCALA members:

Restore all but $2 million of funds for adult care homes Medicaid PCS: Previously, proposal was to cut ACH PCS funding by $10 million. This change would restore $8 million in funding for ACH PCS.
Lower across-the-board cut for all Medicaid providers: 3.06% instead of 5.5% in FY 09-10 and 3.56% instead of 6% in FY 10-11.
Restore funding of PT/OT/ST: Outpatient services for adults and children.
Rollback of State/County Special Assistance rates to pre-January 2009 rates: Assisted living communities that received in January a $33-per-month increase in SA for the low-income seniors they serve will lose the increase, despite the increased costs of food, fuel, and utilities that all businesses have experienced. NCALA is especially concerned about this cut because it will adversely affect the cost of room and board for low-income seniors.
Reduce dispensing fee for both brand and generic drugs and reduce reimbursement for prescription drugs: The proposed budget would affect Long Term Care Pharmacies as well as community pharmacies by changing the reimbursement for prescription drugs from Average Wholesale Price (AW) -10% to Wholesale Acquisition Cost (WAC) +7%. This change is expected to generate almost $10.5 million in savings this year and almost $14 million next year.
Implement a preferred drug list: Commonly used in states across the country, drug companies fought off this provision for many years in North Carolina, home to numerous drug manufacturing operations. This provision is slated to generate $40 million in savings in FY 09-10 and $50 million in savings in FY 10-11.
New and increased licensure fees: Virtually no provider escapes a fee increase or, if they didn't pay a fee, they will. New fees are proposed for Medicaid provider of $100 payable every three years and for initial licensure of a health care facility. An annual fee for hospice and increased fees for license renewals for health care facilities are proposed.

To read the complete proposals, please view:
http://www.ncleg.net/sessions/2009/budget/2009/S202-CSLR-29.pdf and
http://www.ncleg.net/sessions/2009/budget/2009/S202-ASVxf-21.pdf

NCALA sent alerts to members last week apprising of the ACH cuts and asking them to contact their members immediately. Please continue to call and write legislators to thank them for their efforts to restore funding and to ask them to do everything possible to also restore funding for State County Special Assistance.

NCALA asks member communities to please contact your legislators immediately to ask them to spare further cuts to adult care homes and to restore funding for SA. Please make clear that this cut will hurt low-income seniors by making make it harder to pay their bills.

In this Issue:

Legislative Update June 2, 2009

Legislative Update June 2, 2009

House Appropriators Unveil Health, Human Services Cuts

House Health and Human Services appropriators released a proposed budget on May 28. Staff reviewed the proposal with committee members and a committee room filled with concerned advocates and stakeholders. No provider or program was left uncut. Some programs were zeroed-out.

Late on May 29, reports leaked that House budget writers were seeking and additional $265 million cuts in the Health and Human Services Budget, to be reported on by June 2. That would put the House proposal nearly a full $1 billion below the Senate proposal. So, it is clear to observers that the cutting is not done yet!

Items of interest to NCALA members include the following proposals:

Across-the-board cut of 4% for all Medicaid providers. Adult care homes' PCS payments will be among those cut, despite the fact that DMA has not adjusted PCS for cost of living along with increases for other Medicaid providers for the past three years. In addition, DMA has not responded to the evidence that proves adult care homes' PCS payments have not covered the actual cost of care provided to frail elderly residents.
Rollback of State/County Special Assistance rates to pre-January 2009 rates. Assisted living communities that received in January a $33 per month increase in SA for the low-income seniors they serve will lose the increase, despite the increased costs of food, fuel, utilities all businesses experienced. NCALA is especially concerned about this cut because it will adversely affect the cost of room and board for low-income seniors.
Elimination of the Quality Improvement Consultation Program. This successful program that aimed to improve quality at adult care homes will be zeroed-out, saving the state $190,204 in this year and next year.
Reduce reimbursement for Prescription Drugs. The proposed budget would affect Long Term Care Pharmacies as well as community pharmacies by changing the reimbursement for prescription drugs from Average Wholesale Price (AW) -10%, to Wholesale Acquisition Cost (WAC) +7%. This change is expected to generate almost $10.5 million in savings this year and almost $14 million next year.
Reduce Prescription Drug Costs. The proposed budget would generate savings by reducing prescription drug expenditures by employing the following actions: enhancing utilization management of the PAL list, increasing use of generic drugs and by increasing rebate collections on generic drugs. If sufficient savings are not realized, the department shall implement a preferred drug list for all drug classes in the Medicaid programs, a list that would include generic and brand name drugs that offer supplemental rebates. This change is budgeted to save almost $26 million this year and more than $30 million next year.

After heated debates, lawmakers agreed to treat Personal Care Services funding for adult care homes separately from that for In-home PCS and significantly reduced the appropriation for in-home PCS. The recommended reduction in in-home PCS is due to recent reports of misuse of the program by some home care agencies. NCALA is seeking language to make that distinction clear. Concurrent with these discussions, ACH PCS is under a restructuring initiative mandated by the Center for Medicare and Medicaid Services. Changes to ACH PCS rates—even the 4% reduction as applied to all Medicaid providers—could jeopardize the program changes directed by CMS. NCALA will make these points in discussions with lawmakers.

House leaders aim to have its budget approved by June 18. NCALA will continue to work to ask lawmakers to spare as much as possible cuts to communities that serve low-income seniors.

In this Issue:

Legislative Update April 10, 2009
Do You Know Your Legislators?

Legislative Update April 10, 2009

Senate Approves Budget April 8

Senators approved S202, Appropriations Act of 2009, on April 8. Earlier in the week Senators met in the Appropriations Committee, the Pensions and Retirement Committee, and in the Finance Committee to explain and amend the bill. Due to weak economic indicators, such as lower than expected revenues and increasing unemployment, the Senate version is a significant rewrite of Gov Perdue's proposed budget. The finance pieces of the budget were not included and are expected to be unveiled after the revenue picture becomes clear, likely to be post-April 15 tax collections.

In the Health and Human Services budget area, Senate budget writers proposed to continue the Medicaid rate freezes imposed last year and to continue the additional cut imposed by the agency mid-year due to the current budget crisis to save $101 million. Senate budget writers also proposed to cut Medicaid Personal Care Services to generate savings approaching $55 million in each year of the biennium. While conversations with DHHS staff appear to indicate that these PCS cuts are aimed at home care, the provision is vague and NCALA will work to clarify this with House budget writers. The Senate's budget proposes to save more than $55 million during the biennium through a slate of pharmacy savings generated from increased use of generic drugs, increased use of the Prescription Advantage List and expected increases in drug rebates. The therapy services budget---physical therapy, occupational therapy and speech therapy---are slated to be cut by more than $6 million during the biennium and adults would be limited to a total of 30 visits.

Senate budget writers clearly had high expectations for increased savings and better case management from Community Care of North Carolina and included a lengthy provision directing the program's generation of studies and data. The provision would include CCNC expansion to cover more Medicaid recipients and to provide services through it to currently unserved populations.

S202 holds State/County Special Assistance rates at last year's level of $1207 per month for low-income residents of adult care homes and $1515 per month for low-income persons in Alzheimer's/Dementia special care units. NCALA worked hard to communicate to lawmakers the need to avoid generating savings by cutting these important benefits. S202 proposes a $500,000 recurring appropriation to Project CARE for caregivers for persons with dementia are recommended. The bill includes licensure fee increases for adult care homes, nursing homes, and hospitals. The adult care home annual license fee would rise to $360 plus the per-bed fee of $17.50. The new fees for initial adult care home licensure would be $400 plus the initial bed fee of $19.00.

Although Gov Perdue's budget included a tax increase on tobacco sales of $1 per pack and a 5% tax surcharge on alcohol purchases, the Senate's revenue package was not included in the budget. The Senate Finance Committee is expected to make its recommendations public sometime after the April 15 tax estimates are determined.

The bill will now go to the House of Representatives for review and consideration.

To read S202 please view:
http://www.ncleg.net/gascripts/BillLookUp/BillLookUp.pl?Session=2009&BillID=s202

The money report for S202 can be seen at: http://www.ncleg.net/sessions/2009/budget/2009/budgetreport04-08-09.pdf

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.

Do You Know Your Legislators?

Contact NCALA for more information on who your legislators are and how to host a visit or event with them.

In this Issue:

Legislative Update March 31, 2009

Legislative Update March 31, 2009

Senate Approves State Health Plan Changes

S287, State Health Plan/Good Health Initiatives, which would make significant changes to the Plan's cost sharing and benefits effective July 1, 2009, was approved on a 28-18 vote by the Senate on March 25. Bill sponsor Senator Tony Rand (D-Cumberland) responded to opposition voiced by pharmacists and amended the bill on the Senate floor to eliminate the parts of the bill to that most offended them. To read the bill, please view http://www.ncleg.net/gascripts/BillLookUp/BillLookUp.pl?Session=2009%20%20&BillID=s287

The original version of S287 included an extended pharmacy network or mail order pharmacy to account for $90 million in savings. The reimbursement proposed would make find local community pharmacists hard-pressed to participate in the network. Jerry Cooper, NCALA Executive Director, heard complaints from long-term care pharmacy members about the implications of these changes for the retired state employees served in assisted living communities. Consequently, NCALA joined with the pharmacy community and voiced concerns about S287 to senators. In a letter e-mailed to senators, the association representatives said that the State Health Plan would make it difficult for long-term care pharmacies to serve retired state employees who reside in assisted living communities. In addition, the mail-order option would make compliance with state rules regarding medicine distribution in assisted living impossible. Furthermore, the extended care network rates would jeopardize assisted living's arrangements with local pharmacies for 24-hour back-up.

The amended version of S287 omitted the extended pharmacy network and mail-order provisions and directed the pharmacy benefits manager to garner a total of $38 million in savings through increased utilization of generic drugs and negotiated rates with pharmacies. The House Insurance Committee is slated to hold a hearing on S287 on March 26, beginning the bill's journey through that chamber.

Sen Rand said that S287 must be approved prior to March 31 to enable the Health Plan to implement the changes necessary to pay its bills and to continue to serve members. When Gov Perdue used executive authority to shift funds to the plan herself on March 11, she diffused the urgency argument somewhat and gave stakeholders time to make their arguments against the proposal, as well as time to develop alternate plans. How the House responds to the Senate action, as well as the urgency of resolution, remains to be seen.

In this Issue:

Legislative Update March 20, 2009

Legislative Update March 20, 2009

Governor Releases Budget Proposal

At a press conference March 17, Governor Beverly Perdue briefed reporters on her 2009-2011 spending plan. The $21 billion biennial budget proposal will be her first as North Carolina's governor and was the most challenging to develop for any governor since the Great Depression. Gov Perdue acknowledged that revenues were running much shorter than estimated, leaving a hole exceeding $3.4 billion. She proposed to fill it with $1.7 billion in federal recovery funds and through cuts and reprioritizing existing programs. The budget includes increases in cigarette and alcohol taxes, but no salary increases for state employees.

In the Health and Human Services budget area, Gov Perdue proposed to continue the Medicaid rate freezes imposed last year and to continue the additional cut imposed by the agency mid-year due to the current budget crisis. This provision appears to include Home Health PCS. The governor's budget included a slate of pharmacy savings budgeted from increased use of generic drugs, increased use of the Prescription Advantage List, and expected increases in drug rebates. State/County Special Assistance appears to be funded at its current FY 09-10 rate. A $1 million increase to Home and Community Care Block Grants and a $500,000 recurring appropriation to Project CARE for caregivers for persons with dementia are recommended. An increase in licensure fees for adult care homes, nursing homes, and hospitals is included in the budget recommendations.

Gov Perdue's budget included a tax increase on tobacco sales of $1 per pack and a 5% tax surcharge on alcohol purchases. At the same time, Gov Perdue proposes a caregiver's tax credit to help relieve the economic burden for persons who care for older family members.

Gov Perdue's budget proposed no salary increases for teachers, faculty, and state employees. In some situations, teachers and state employees will be eligible for leave in lieu of longevity bonuses.

More details will be shared with lawmakers and the public during the budget briefings slated to begin tomorrow. NCALA will provide details of concern to its members as soon as they are available.

In this Issue:

Legislative Update February 19, 2009
Being in the Place of "Not Knowing" ... and Embracing It

Legislative Update February 19, 2009

Budget Briefings Continue---Budget Drivers and Higher Education Highlighted

Legislative Fiscal Staff-persons continued to brief legislators this week on North Carolina's fiscal outlook. Staff updated lawmakers about the budget drivers: budget areas, their rates of change (growth) and revenue sources, as well as the higher-education components of the state budget. Those briefings can be viewed in their entirety here and here.

The reviews will continue next week with a session on public schools on February 17 and a session on Medicaid on February 18.

House Committee Appointments Announced

House Speaker Joe Hackney (D-Orange) announced the appointment of House committees. Below is a listing of members of committees of interest to NCALA members:

Appropriations Subcommittee on Health and Human Services

Co-chairpersons: Representatives Beverly Earle (D-Mecklenburg), Bob England, M.D. (D-Rutherford), and Verla Insko (D-Orange).
Vice Chairpersons: Representatives Jeff Barnhart (R-Cabarrus) and Jean Farmer-Butterfield (D-Wilson).
Members: Representatives William Brisson (D-Bladen), Justin Burr (R-Stanly), Pearl Burris-Floyd (R-Gaston), Nelson Dollar (R-Wake), Wil Neumann (R-Gaston), and Randy Stewart (D-Nash).

Health

Co-chairpersons: Representatives Bob England, MD (D-Rutherford) and Verla Insko (D-Orange).
Vice Chairpersons: Representatives Beverly Earle (D-Mecklenburg), Carolyn Justus (R-Henderson), Wil Neumann (R-Gaston), and Raymond Rapp (D-Madison).
Members: Representatives Alma Adams (D-Guilford); Martha Alexander (D-Mecklenburg); Cary Allred (R-Alamance); Marilyn Avila (R-Wake); Jeff Barnhart (R-Cabarrus); Harold Brubaker (R-Randolph); Pearl Burris-Floyd (R-Gaston); Bill Current, DDS (R-Gaston); Nelson Dollar (R-Wake); Jean Farmer-Butterfield (D-Wilson); Rick Glazier (D-Cumberland); Bruce Goforth (D-Buncombe); Robert Grady (R-Onslow); Ty Harrell (D-Wake); Sandra Hughes (D-New Hanover); Danny McComas (R-New Hanover); Marian McLawhorn (D-Pitt); Earline Parmon (D-Forsyth); Randy Stewart (D-Nash); William Wainwright (D-Craven); Jennifer Weiss (D-Wake); and Winkie Wilkins (D-Person).

Aging

Chairperson: Representative Jean Farmer-Butterfield (D-Wilson).
Vice Chairpersons: Representatives Garland Pierce (D-Scotland), Ruth Samuelson (R-Mecklenburg), and Jennifer Weiss (D-Wake).
Members: Representatives Alma Adams (D-Guilford), James Boles (R-Moore), Alice Bordsen (D-Alamance), Justin Burr (R-Stanly), Pearl Burris-Floyd (R-Gaston), Beverly Earle (D-Mecklenburg), Darrell Jackson (D-Wake), Earl Jones (D-Guilford), Darrell McCormick (R-Iredell), Grey Mills (R-Iredell), and Efton Sager (D-Wayne).

To view all House Committee Appointments, please visit: http://www.ncleg.net/gascripts/Committees/Committees.asp?sAction=ViewCommitteeType&sActionDetails=Senate%20Standing.

Being in the Place of "Not Knowing" ... and Embracing It

by Ann Fry, MSW

I constantly live in the place of "not knowing." I wake up scared and go through much of life scared ... because I never know what's going to happen or be next. If you're completely honest ... that's where you are too.

Think about it.

Do you have a script for your life or even for your day or even for the next hour? You might have a calendar that tells you what's on the schedule, but you still don't know how it will go. Even if you go to the same place everyday and do the same thing, there is still the unknown. Chances are, things will continue to go as they do each day, but you don't know that.

Think about this:
Because of a traffic jam, you could be forced to turn and go a different direction or at least off the beaten path. On that new path, you could find the most beautiful place you've ever seen and have to pull off the road just to embrace that beauty. Because of that, you could be late for wherever you're going, which turns out to be a good thing, because if you'd been on time, you would have been part of an awful event.

Or, here's another scenario.
You could be walking to the subway (since I live in NY), find your stop entrance to be closed and have to walk to another or take a bus. A bus is coming so you get on. On that bus is the most beautiful person you've ever laid eyes on and he/she looks at you. Voila, it's love at first sight. That's how life can be. That's how life can be.

Life can change on a dime! Sometimes it does change for the bad, but often it changes for the good.

Me, I never really know what's next. Sometimes I have work and make money and sometimes I don't. I'm never secure. In this economy, no one is secure. I've had amazing experiences that occur synchronistically and I've avoided some awful pitfalls and I've met the perfect person when I didn't expect it. But, then again, I am open to that and I expect it ... all the time. It's been my life for more than 20 years.

So, like I said, I'm always scared. It's not a matter of being afraid and not knowing, but rather a matter of what do you do in spite of those feelings. Or, how do you handle it? Or what are you willing to do to create life as you want it rather than waiting for it to just happen to you? Can you let it show up? Can you be open?

My whole goal at this point in my life is to let my life invent itself ... to see how it shows up and at the same time to help point the rudder in some of the directions I want it to go.

Being self-employed and sometimes feeling like I'm at the bottom of the food chain is a challenge. When companies are struggling to survive, they're usually not beating my door down to come in and help them. I don't have as much work as I'd like. So, here's where I get to choose what's next.

I get to think outside the box for new ideas;
I get to create products that they do need, in spite of their economic condition;
I get to inspire them to see things newly and differently;
I get to distract myself with fun, pleasurable activities so that I'm in a good, positive space to withstand the challenges and be fresh and ready for what does happen;
I get to learn something new for myself that will help me with them ... take a new course, improve my selling skills, or whatever; and
I get to feed my spiritual soul ... by meditating, seeing beauty, honoring my beauty, reading, journaling, etc.

Sometimes I feel like curling up in my bed under the blanket and not coming out; but I never do that! What I do instead is, I stand up, put one foot in front of the other, hold my head up, dust myself off, and start all over again. Or, as an old friend once said to me: "Ann, you always seem to land on your feet." I never, ever, ever give up. I might worry, fret a bit, get negative and whiny, but it always goes away and leaves the door open to trust, love, positivity, and being productive.

So, what might you do differently now after reading this very short little piece? How will you go out into the world, in spite of the "not knowing" and follow your path?

Ann Fry, MSW, is a professional speaker and an executive coach. She calls herself a ReInvention Expert. Her company is The ReGeneration Group. She speaks at conferences and to organizational retreats. She can be reached at ann@annfry.com or at (646) 708-5650. Or, you can find her at www.annfry.com (where you can get a short download for her "6 Steps to ReInvent Your Life").

In this Issue:

Legislative Update February 11, 2009

Legislative Update February 11, 2009

Budget, State Health Plan Woes Reviewed

Legislative Fiscal staff persons briefed legislators this week on North Carolina's fiscal health and that of the State Health Plan. Lawmakers learned that the state's revenues were currently coming in nearly 7% below projections and that the unemployment rate hit new highs approaching 9% as of December 2008. They also reported on interim measures to stem the growth of the budget's shortfall. At the current rate, it appears that the shortfall could exceed 10% of North Carolina's $21 billion budget. The complete briefing appears at: http://www.ncleg.net/fiscalresearch/frd_reports/frd_reports_pdfs/Session%20Briefings/2009_02_03_Revenue_Budget_Outlook.pdf

Senate Committee Appointments Announced

Senate President Pro Tempore Marc Basnight (D-Dare) announced the appointment of Senate committees. Below follows a listing of members of committees of interest to NCALA members:

Appropriations Subcommittee on Health and Human Services

Co-chairs: William Purcell, D-Scotland and Doug Berger, D-Franklin
Vice chair: Martin Nesbitt, D-Buncombe
Members: Harris Blake, R-Moore; Debbie Clary, R-Cleveland; James Forrester, R-Gaston; David Hoyle, D-Gaston.

Health Care

Co-chairs: William Purcell, MD, D-Scotland and Stan Bingham, R-Davidson
Vice chairs: Katie Dorsett, D-Guilford, Tony Foriest, D-Alamance and, James Forrester, MD, R-Gaston
Members: Bob Atwater, D-Chatham; Austin Allran, R-Catawba; Doug Berger, D-Franklin; Harris Blake, R-Moore; Harry Brown, R-Onslow; Pete Brunstetter, R-Forsyth; Debbie Clary, R-Cleveland; Charlie Dannelly, D-Mecklenburg; Don Davis, D-Greene; Eddie Goodall, R-Union; Steve Goss, D-Watauga; Malcolm Graham, D-Mecklenburg; Fletcher Hartsell, R-Cabarrus; David Hoyle, D-Gaston; Jim Jacumin, R-Burke; Ellie Kinnaird, D-Orange; Vernon Malone, D-Wake; Martin Nesbitt, D-Buncombe; Joe Sam Queen, D-Haywood; Tony Rand, D-Cumberland; David Rouzer, R-Johnston; Bob Rucho, R-Mecklenburg; and Josh Stein, D-Wake.

In this Issue:

Legislative Update February 4, 2009

Legislative Update February 4, 2009

Two Billion Dollar Shortfall Greets Lawmakers on Return to Raleigh

The North Carolina General Assembly convened January 29. North Carolina's official entry into the national recession - a $2 billion shortfall occupied much of the opening statements and sidebar conversations by newly elected leaders and rank and file members alike.

Surprising no one was the reelection of State Senator Marc Basnight (D-Dare) to his unprecedented 9th term as President Pro Tempore. Rounding out his leadership team are Senators Charlie Dannelly (D-Mecklenburg) as Deputy President Pro Tempore; and Tony Rand (D-Cumberland) as Majority Leader. Senate Republicans elected Phil Berger (R-Rockingham) as their leader. Senate committee appointments are expected to be made next week.

House Speaker Joe Hackney (D-Orange) was reelected to his second term presiding over House deliberations. His leadership team includes Representative William Wainwright (D-Craven) as Speaker Pro Tempore. House Republicans reelected Paul "Skip" Stam (D-Wake) to lead their caucus. House committee appointments also are expected to be announced next week.

The short legislative work week was taken up with ceremony and celebration of the return of session. Families stood by lawmakers as they took their oaths of office and joined with them at impromptu receptions throughout the Legislative complex and later that evening at another reception fêting lawmakers, Cabinet members, and Council of State members.

Next week will be "moving time," as many lawmakers move into new office assignments. In the meantime, behind-the-scenes lobbying for committee assignments will continue until final appointments are announced.

In this Issue:

2008 Summary of Legislative Action and Policy Changes

2008 Summary of Legislative Action and Policy Changes

The 2008 Session of the North Carolina General Assembly lived up to its name--it was a short session. Lawmakers returned to Raleigh May 13, 2008 and remained until July 18--only 155 legislative days. The effects of the national economic downturn crept its way into the legislators' budget deliberations at a slower rate in North Carolina than in other states. Although North Carolina's economy was not in a recession, its revenue growth slowed significantly over projections made in 2007. Fortunately, state budget writers were very conservative in their spending decisions in 2007. The short session's priority is adjustment of the biennial budget approved in the previous year, so most changes were confined to ensuring that program investments made in 2007 continued in 2008. Most policy changes approved were tied to the budget, but a few were approved in their own right.

NCALA was active in its advocacy efforts on behalf of assisted living providers and was successful in having several issues heard by lawmakers and a couple of bills passed. NCALA worked hard to affect a $33 per month increase in reimbursement for providers who serve low-income seniors receiving State/County Special Assistance. NCALA successfully advocated for a study about the implementation of a State/County Special Assistance Income Disregard. NCALA supported another bill that provided for a very selective implementation of the income disregard, but study would have implications for all low-income seniors who are served by the SA program. Also, NCALA was successful in advocating for DHSR-enforcement of state registration requirements for Multi-unit Assisted Housing with Services. This enforcement will level the playing field among those unregulated providers and regulated assisted living communities. Although legislators were unwilling to revisit some important issues, including needed modifications to last year's Adult Care Home Star Rating program and the long term care insurance tax credit, NCALA did educate some members about the issues. NCALA will work on those matters during the long session in 2009.

Fiscal challenges for the next General Assembly are mounting. In addition to the bad economic news already at hand, the close of session came with another unexpected problem. The State Health Plan was revealed to be in deep financial trouble--a shortfall projected in August, 2008 to be close to $300 million short of what is needed to operate by 2009. The bad economic forecast makes the outlook for provider increases stormy. This myriad of challenges will greet the new Governor and General Assembly in 2009.

NCALA members' advocacy efforts with their House and Senate members yielded excellent results in 2008, despite formidable fiscal and political obstacles. NCALA must prepare for the turbulent 2009 political environment through vigorous support for NCALA advocacy efforts. Visits to NCALA members' local communities and support of NCALA PAC are key among those opportunities. For more information on stepping-up your advocacy efforts, please contact Jerry Cooper, NCALA Executive Director.

Thank you for all that you do to support NCALA.

Regulatory Oversight and Enforcement Changes

Bill: H 2409, Multiunit Assisted Housing with Services Registration Fee, Session Law 2008-166
Link to Bill: H 2409 provides the Division of Health Services Regulation with tools to enforce its requirement that MAHS register. The bill requires that MAHS file a $350 fee to register with DHSR. Upon failure to register, MAHS could face fines and penalties consistent with those imposed upon adult care homes that fail to be properly licensed by the state. NCALA requested the legislation, which was a recommendation of the Aging Study Commission. The provisions of H 2409 become effective January 1, 2010.
Bill: S 1627, Certified Retirement Community Program, Session Law 2008-188
Link to Bill: S 1627 charges the Department of Commerce with working with appropriate state and local agencies to create a Certified Retirement Community Program, whose goal is to market North Carolina as a retirement destination. Communities across the state that seek this designation would work with the Department of Commerce and other state and local agencies as indicated. The provisions of S 1627 become effective July 1, 2010.
Bill: H 2397, Nursing Home Administrators Criminal History Check, Session Law 2008-183
Link to Bill: H 2397 enacts a recommendation of the Aging Study Commission to require criminal records checks for applicants for licensure as nursing home administrators. Sections of the bill dealing with nursing home administrators' licensure renewal become effective December 1, 2008; the rest of the bill became effective August 4, 2008.
Bill: H 964, Expand Definition of Home Care Services, Session Law 2008-127
Link to Bill: H 963 expands the definition of Home Care Services to include in home companions and sitters. The change applies to in-home companion and sitter services provided for a fee and would subject them to requirements and provisions of home care statutes and rules. The bill also raises the home care licensure fee to $400 per year. The provisions of H 963 become effective January 1, 2010.

Appropriations

Bill: H 2436, Modify Appropriations Act of 2007, Session Law 2008-107
Link to Bill Text: House Bill 2436, 2008-2009 State Budget, signed into law 3:52 pm, July 16, 2008 as SL 2008-107
Link to Report: The Joint Conference Committee Report on the Continuation, Expansion and Capital Budgets for House Bill 2436, Modify Appropriations Act of 2007, July 3, 2008: Because the biennial budget was approved in 2007, H 2436 was to adjust the budget due to changes in program needs and revenues. Revenue availability was lower than expected and cuts were taken in many programs. Salary increases certainly did not live up to expectations of state employees or teachers.
The Health and Human Services budget provides for a $33 per month rate increase in State/County Special Assistance for low-income seniors in adult care homes. In addition, the budget reduced Medicaid inflationary increases to about 33 per cent of the full amount. Earlier versions of the budget reduced the increase to 25 per cent of inflation. Funding was provided for mental health screenings and assessments for adult care home residents and $500,000 was provided for respite care for caregivers of persons with Alzheimer's disease and dementia. NC NOVA received $75,000 in nonrecurring funds because of its role in the Adult Care Homes Star Rating System and Project CARE received $500,000 in nonrecurring funds to provide respite for Alzheimer's caregivers.
Bill: S 1796, Special Assistance Income Disregard Under Certain Circumstances, Session Law 2008-184
Link to Bill: S 1796 makes states that eligibility for State/County Special Assistance by residents in adult care homes shall not be changed by COLA increases in Social Security, SSI, Veteran, and Railroad Retirement. The provisions became effective August 6, 2008.

Studies

Bill: H 2410, Special Assistance Income Disregard Study, Session Law 2008-161
Link to Bill

H 2410 requires the Department of Health and Human Services to study the implementation of a State/County Special Assistance Income Disregard Policy for Medicaid. Sponsored by Rep. Bob England, MD (D-Rutherford), the bill was a recommendation of the Aging Study Commission and requested by NCALA. While the issue has been studied several times, Rep. England expressed his hope that this time, DHHS would return to the General Assembly with a plan to implement it. H 2410 was approved by the Senate and the House with no dissenting votes. The provisions of H 2410 became effective August 8, 2008.

Bill: H 93, Transport of Individuals in Wheelchair Study, Session Law 2008-121
Link to Bill

H 93 requires the Department of Transportation to study issues relating to the transportation of persons seated in wheelchairs. A recommendation of the Aging Study Commission, the bill requires the DOT to report its recommendations by February 1, 2009 to the Aging Study Commission and the Transportation Oversight Committee. H 93 became effective July 8, 2008.

Bill: H 2431 Studies Act of 2008, Session Law 2008-181
Link to Bill

H 2431 authorizes a myriad of studies, many of which are related to issues that affect the elderly and adult care home communities. The studies include the topics listed below. NCALA will monitor studies that could affect NCALA members.

Legislative Research Commission Study: Certificate of Need Process and its Impact on the Availability of Local Health Care Services. The Commission may study the law and process for issuing a Certificate of Need (CON) for new construction and expansion or renovation of existing health care facilities.
Joint Legislative Health Care Oversight Committee Studies:
- DNR Orders: The Committee may study "Do Not Resuscitate" (DNR) orders issued by an attending physician in the absence of a declaration for natural death.
- Electronic Health Information Management: The Committee may study the development of a coordinated statewide electronic health information network to facilitate the integration of health information technology into health care systems and support the timely, accurate, and secure exchange of health information. Coordinated health information management must be accomplished in consultation with representatives from potential participants, including public, private, and teaching hospitals; rural clinics; community health centers; free clinics; the Department of Health and Human Services; and health care providers' professional organizations.
- Bedding Laws: The Committee may study issues concerning bedding laws, Part 8 of Article 8 of Chapter 130A of the General Statutes, including the Bedding Law Account.
- Increase in Medical Records Copy Fees: The Committee may study whether after 15 years the fee initially authorized under G.S. 90 411 should be increased to more closely reflect current copying and handling costs. When considering a fee increase, the Committee shall take into account the financial impact of the fee increase on consumers and others requesting medical record copies.
North Carolina Study Commission on Aging Issues: State's Readiness to Respond to the Coming Wave of Older Adults (The Commission may study the state's readiness to respond to increasing numbers of older adults residing in North Carolina.
DHHS Studies:
- Issues relating to hearing loss in older adults in North Carolina.
- Study the feasibility and possible savings to the state of operating a licensed adult care home in a public housing facility.
- Study the adequacy of service standards and funding for group respite services. The study shall include determining whether opportunities exist to streamline and enhance the provision of respite services.
NC Institute of Medicine Study: The Institute shall convene a group to study issues related to access to appropriate and affordable healthcare for all North Carolinians.
Joint Legislative Study Commission on Guardianship Laws: The purpose of the commission is to review state law pertaining to guardianship and its relationship to other pertinent state laws such as the health care power of attorney, the right to a natural death, and durable power of attorney. In conducting the study, the commission shall consider issues related to guardianship for incompetent persons and minors.

Bills That Failed Passage

Bill: H2404 Increase Long-term Care Insurance Tax Credit Link to Bill: H 2404, Enhance Long Term Care Tax Credit, is an NCALA-supported bill that stalled in the House Finance Committee. The bill would expand the tax credits for persons who purchase long-term care insurance to cover a greater percentage of the premiums and to apply to more people. The bill was a recommendation of the Aging Study Commission and was approved without dissent by the House Aging Committee July 2. Despite the measure's popular support from Democrats and Republicans alike, reports indicate that House Finance Co-chairs, Rep. Paul Luebke (D-Durham) and Rep. Jennifer Weiss (D-Wake), prevented the bill from being calendared for consideration, thus stalling its approval prior to the close of session.

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