News: CJ Exclusives

Health care policy in focus in Senate budget proposal

From Medicaid changes to increased resources for behavioral health, to higher monetary thresholds for requiring Certificate of Need, the budget bill touches on key healthcare policy issues.

There are the numbers associated with the biennial budget proposal from the N.C. Senate, of course, but, as with most budgets, the numbers are sometimes associated with policy initiatives wrapped into the spending plan. This budget cycle is no exception. With ‘Health and Human Services’ being one of the single largest budget outlays, health care is one area in which policy changes are sure to be included.

Jordan Roberts is government affairs associate and former health care policy analyst for the John Locke Foundation. He breaks down the importance of this budget section and what the Senate proposal entails.

“The Health and Human Services portion of the budget is critical to the citizens of North Carolina as the General Fund appropriation is the second largest, only behind education,” Roberts pointed out in an interview. “As I read through the Senate’s budget, I grouped the health care provisions into four larger buckets: Medicaid, Behavioral Health, Public Health, and Health Policy.”


Medicaid recipients with Intellectual or Developmental Disabilities could have more opportunities to design care plans for home, rather than in institutional settings, through increases to the number of slots available in the NC Innovation Waivers program. At a cost of nearly $34 million, the bill outlines a plan for distributing 1,000 additional waivers to fund customized  “Person-Centered Plans of Care” for those with I/DD, in lieu of institutionalized care plans.

Pregnant women with incomes up to 196% of the federal poverty rate shall remain eligible for Medicaid coverage for a full 12 months after giving birth under the proposal. In the bill text, $12.5 million is allocated each quarter of the 2021-22 fiscal year to fund the expansion in post-partum coverage, with indexing allowing for formulaic increases going forward.

Notably, the Medicaid Transformation Fund gets an infusion of hundreds of millions in nonrecurring funds under the Senate proposal for the purposes of facilitating the further transition to a managed care model, versus the fee-for-service model.

Senate budget writers also make clear intentions to assist in raising wages for workers in intermediate-care facilities to at least $15 per hour. The proposal allocates $17.5 million in recurring funds to raise wages for frontline workers working with those with intellectual disabilities, as well as a $1,500 one-time bonus.

Behavioral Health

The importance of behavioral health to healthy lives and communities was presented in full relief over the past year of pandemic policies. As such, it features prominently within the health care policy proposals contained in the budget.

“We know the toll the pandemic has taken on the mental health of many of our citizens, and it’s clear from the Senate’s budget that boosting our state’s behavioral health infrastructure is a key priority,” Roberts said. “The budget investments in new facilities and ones already providing mental health services are essential as we move past the pandemic and deal with the behavioral health consequences.”

One such investment comes in the form of a $1.5 million grant to the East Carolina University Center for Telepsychiatry and e-Behavioral Health for the statewide telepsychiatry program, which will “be used to respond to the COVID-19 public health emergency by providing virtual psychiatric assessments and consultations to patients utilizing telepsychiatry.”

For patients needing more hands-on treatment, the bill proposes using funds from the sale of the Dorothea Dix Hospital property to increase the number of licensed inpatient behavioral health beds. What’s more, these new facilities or facility expansions using these funds will be exempt from the onerous and arbitrary certificate-of-need review, which amounts to meaningless red tape.

To that end, a Behavioral Health Urgent Care pilot program is funded with a total of $2 million to found the Dix Crisis Intervention Center in Onslow County, to serve individuals experiencing a mental health crisis episode.

Also within the bill, the Department of Health and Human Services is called upon to implement electronic health records for all psychiatric hospitals in the state. Reportedly, some such hospitals in North Carolina are still using paper filing systems.

Another $12.6 million is dedicated to ICF/IDD facilities to assist with COVID mitigation costs.

Health Care Regulation

When it comes to government regulation, health care gets the lion’s share. That leaves a lot of room for adjustment, and Senate budget writers aim to adjust a critically limiting factor in the provision of affordable, accessible health care in North Carolina: certificate-of-need thresholds.

The CON regulatory regime limits health care supply unless state health care planners determine a specific “need.” The “need” for health care providers to secure such a certificate is triggered by, among other factors, specific monetary levels for new medical equipment such as imaging machines or expanding patient capacity.

The Senate budget proposal includes an increase to that monetary threshold from $500,000 to $1.5 million. This would mean a health care provider that is currently required to seek a certificate of need for a $600,000 investment in expanding out-patient services with a new, more efficient, sophisticated medical technology can now make that investment expeditiously, without being hindered by the burden of first needing to get approval from central planners and competitors. Relevant expansions above $1.5 million would still require a certificate of need.

The senators’ budget proposal also targets surprise billing for elimination via the Medical Billing Transparency provision. The change would require medical providers to give 72-hour notice to insured patients referred to out-of-network providers whose bills for service often surprise patients in the worst way possible. The proposed requirement offers insured patients an opportunity to consider cost and care more transparently, and avoid the heart palpitations often associated with surprise medical bills.

Health care provider networks themselves could improve for North Carolinians, too, as the bill would give clearance for Exclusive Provider Organizations in the state. EPO benefit plans allow for tight networks of covered health care services from doctors, hospitals, and other care providers that can facilitate progressive care (from primary care physician to specialist) with significant savings of time and money.

Public Health

Finally, the budget wouldn’t be complete without some additional focus on public health in addition to the billions in federal COVID-related funds coming into the state earlier this year.

Here we see a sizable commitment in the Senate proposal to tackling latent health risks like lead and asbestos exposure. In the bill, there is allocated $150 million for remediation programs to remove lead and asbestos from public schools and child care facilities throughout the state.

Overall, the biennial budget proposal from the N.C. Senate suggests needed and notable changes could be coming to some areas of health care policy.

“The policy changes in this budget reflect some of the most pressing needs the state faces concerning health care supply and health care coverage,” Roberts said of the health care changes. “This budget attempts to increase health care supply in our state by raising the monetary thresholds that would subject a new health care project to the archaic certificate-of-need process. It also increases access to health coverage through exclusive provider organizations and increasing the duration that new mothers can be eligible for Medicaid coverage after giving birth.”

For health care policy stakeholders, attention now turns to the trimming and tweaking of the budget bill in relevant Senate committees before they vote to send the plan to the House of Representatives. While the aforementioned policy items aren’t likely to survive that process completely untouched, the focus of Republican leadership in the House is likely to mirror much of the policy aims presented by the N.C. Senate.