Summary of Proposed Cuts/Restoration by House and Senate HHS Budget Conference Committee for MH/DD/SAS

As of June 26, 2009

Cuts and restoration of cuts is a moving target: these numbers are the most recent version being discussed by conferees.

Cuts to MH/DD/SAS: Below is a partial list of the cuts and restoration of cuts being considered by the House and Senate Budget Conference Committee members. This is an ongoing process and nothing has been decided (please see the budget update above). In addition MHANC has added information and commentary about the impact of these budget cuts that represents our research and opinion. This is not a complete list of all the cuts impacting people with MH/DD/SA. To view recent budget documents go to www.ncleg.net. 

(second numbers are amounts for year 2 of the budget. All numbers are cuts except those under expansion)

Division of MH/DD/SAS and DHHS

74.4 million, 91.6 million -  Continuation budget adjustment

Each year state agencies present a budget that represents the amount that it will take to continue operating at the current level for the coming year. This does not adjust for caseload or population growth but does take into account the projected increase in costs of fuel, maintenance, etc. Sometimes the budget is adjusted to make it more technically correct by moving funds from areas they are not used to ones where they are used and to annualize funds that were only partially allocated for startup of programs in previous years. The current proposal removes all of these technical decreases (14 million), and eliminates the increases. It leaves it up to DHHS and Div of MH/DD/SAS to determine where the cuts will be taken from and how programs will make up the difference.

1.9 m  - Central Office Contracts

GA Fiscal Research has indicated that contract cuts are not to direct services, but some of these contracts cut in this item to provide a direct service that is not billed on a fee for service basis but is funded by direct contact including things like Life Guardianship thought the Arc of NC.

12.8 m  DHHS positions (350 positions)

Some flexibility has been extended to this item, fewer positions are targeted and they may be filled or vacant positions allowing for critical care positions to be retained where possible. Nine positions in the central office have been identified, the rest will likely come from state facilities. Note that these cuts follow on the heels of a year where Legislators added 120 positions to state hospitals/institutions in the wake of reports on deaths, mistreatment and regulatory violations. 

3m, 6 m -  LME systems management.

When combined with the Medicaid federal dollar loss the impact is 5.5 million in the first year and over 6 in the second year.

50 m NR, 50 m NR  - state funded service dollars

These funds are used to support individuals who need mental health, developmental disability and addictive disease services that have no insurance and do not qualify for Medicaid. This will likely cut the amount of our Federal Block Grant funding since were will violate our maintenance of effort.

16 m – State funds to DD services

8 million will be cut directly and 8 will be transferred to DMA for CAP slots. It is not yet clear if the 8 million will open any new slots or simply prevent slots from being frozen or lost, or if that 8 million will go to CAP MR/DD or the CAP-DA program as well.

25 beds at Broughton Hospital, 25 beds at Cherry hospital and 102 positions

9 m  - Broughton payback

Epected payback from the Federal Government for the closure of Broughton Hospital

4.5 m – non-core State operated services

Our understanding is that this will come from services that are not considered part of the “core mission” of the hospitals and institutions, anything not directly related to health and safety of those residents and patients. Some examples we have heard include any dental services to former DD residents, field trips, music or art, in other words things that make our institutions more livable.

4 m – non-core community services

We have heard that this will target CTSP funds.

1.2 m – operating expenses in Division central management

1.2 m – loan repayment programs

This cuts several loan repayment programs intended to help recruit psychiatrists and other professional staff to state institutions and areas of the state with limited access. Current recipients will not be affected, but no new applicants will be taken.  

Eliminate third shift at CARELINE

Legislators wee concerned that the call volume at night did not warrant a third shift, however with this elimination CARELINE will not be able to accept a contract to become the statewide suicide prevention hotline and NC will continue to be without 24/7 statewide hotline coverage. Youth suicides are on the rise in NC.

Key program/Rental subsidies

This is a onetime reduction to this program since new developments are on hold with the downturn the economy and housing development.

3 m – State County Special Assistance rate reduction

Helps to fund community based care for individuals with disabilities.

Medicaid:

Note that all changes to Medicaid services outlined in the budget require rewriting of our state plan and approval by the Federal Government/CMS. This process does not happen overnight and there is no guarantee of plan change approval. Medicaid recipients who are subject to service changes have the right to appeal and services must be continued during that appeal.   

40 m, 60 m – Community Based Personal Care Services

Changes eligibility for Personal Care under Medicaid reduces hours of care available. Cuts here will be mirrored in state funds; if not eligible for Medicaid service will not be eligible for state service. Requires state plan amendment approval.

82 m, 94 m – Medicaid provider rate cut

Cuts rate 3% in first year and 3.5% in second year. Across services, mental health, doctors, dentists, etc.

65m, 97.5 m – Community Support 
The second year cut represents 80% of the service dollars. Changes to the program over the last year seem to have eliminated many of the issues raised by Legislators, the program remains controversial. What is clear: 33,000 individuals, 75% of them children, receive CS. Many (in the 30% range) have been identified as needing higher levels of care such as intensive in home, MST, ACTT. Assuming those individuals transfer to those services, those line items would need to increase to meet the demand. Some areas of the state lack these services and time and support are needed for startup and training in order to move people out of CS. Requires state plan amendment approval

15 m – Level III and IV Group Home reductions

New criteria would be set for admission to these homes: children would need to fail first in one other service (MST, Level II, Intensive In home) or be transitioning down from a higher level of care. Data from the division seems to indicate that these services are not being utilized as originally intended and that some children are spending up to three years placed here. Some areas of the state lack services that can accept these children. Time and support are needed for startup and training in order to move them out of group homes. Requires state plan amendment approval.

30 m, 40m – Prescription Drugs

Under consideration is a special provision to give flexibility in managing “savings” in this program up to the discretion of the Secretary of DHHS rather than insisting on a preferred drug list or prior authorization. House is still supporting a PDL.

3m, 3.7 m - Increase co-pays on services from $3 to $5 dollars.  

53 m, 85 m - Consolidate case management

Cuts here represent 50% in the first year and 80% in the second year of the total budget for Medicaid case management across systems. Goal is one case manager per person; while most individuals in MH/DD/SA have this already, it could prevent coordination when transitioning to lower/higher levels of care, or force utilization of telephonic rather than face to face case management. Advocates fear that the dollar amount is too great to achieve by consolidation alone and that it would effectively end person centered planning and specialized case management for MH/DD/SA.

CAP slot freeze

Its not clear how the 8 million being transferred from state services would impact this, if the freeze would remain or not.

1.5 million – Provider fees

Not a technically a "cut" to the budget but a replacement of state funds with new provider fees: this requires Medicaid providers to pay a yearly enrollment and re-enrollment fee of $100 to be Medicaid providers.

Expansion

There is a small amount of money that has been specifically added to the budget to offset the impact of cuts:

12 m – community hospital beds

This includes 6 million for beds at the Dix Unit funded in conjunction with Wake County.

Mobile Crisis and DD Crisis/START

These funds have been annualized to ensure they are fully funded this year as intended by the Legislature.