Messages from Reps. Insko and Dollar on the NC Medicaid budget controversy
Original Message Rep. Verla Insko (D-Orange Co.) replied to from Rep. Nelson Dollar (R-Wake Co.)
From: Rep. Nelson Dollar
Sent: Wednesday, December 07, 2011 11:33 PM
To: Martha Brock; lauriecoker; Rep. Verla Insko
Cc: Mary Annecelli; Emma Thorne; Bonnie Jo Schell; Chris Fitzsimon
Subject: RE: Collaborative letter for LOC and for local legislators
There have been no additional cuts or reductions to the Medicaid budget. Reports and speculation flying around this week are incorrect.
Rep. Nelson Dollar
N.C. House District 36
Legislative Office Building, Suite 307B1
Raleigh, NC 27601
In a message dated 12/8/2011
Rep. Verla.Insko@ncleg.net writes:
Rep. Dollar is correct in that the issue now is not new cuts but about a shortfall in reaching the cuts required by the budget we passed in June.
The Secretary reported in November that the Department had implemented procedures to make other factors. At that time, the Dept was roughly $140 million short of cutting the required $356 million from this year’s Medicaid budget. The Sec reported that to meet the required cut, he would have to cut provider rates by as much as 18% or eliminate most of the optional services.
The Sec also mentioned in a letter to House and Senate leadership that it is unlikely CMS would approve additional rate cuts over the 2% already taken on top of a freeze on inflationary increases because CMS is concerned about reducing access to services. If any additional cuts are made, it will almost surely have to be in optional services that include prescription drugs, adult mental health, state run and private sector DD centers, nursing homes, in home care, dental services, hospice, non physician providers, ambulance services and many more.
Part of the problem is saving $140 million in as few as 3 months.
Using mental health as an example, we spend about $96 million/year on adult mental health or about $8 m/month. If the Sec. applied today for a state plan amendment to eliminate adult MH services as an optional service, it might be approved by CMS by March of next year. That would allow a savings of 3 months of services or $24 million against the needed $140 million – even though the cut for the following fiscal year would be the entire $96 million.
To reach $140, we would have to eliminate several optional programs asap; in the 2012-13 budget, those cuts would be for a full year and much greater than the $140 needed and we would have destroyed essential services and sent many people into a higher level of care – in-home patients into institutional care – violating the 1999 US Supreme Court Olmstead decision.
The State constitution requires us to have a balanced budget; this year’s budget requires the Sec to balance the Medicaid budget from funds appropriated for Medicaid so we have few choices.
We have had shortfalls before in the Medicaid budget but we used to have a Medicaid Trust Fund to fill holes - or in 2009, the GA authorized the use of some trust fund money to fill a $200 million hole. My own preference for the current shortfall is for the NCGA to appropriate new funds or authorize the use of funds already appropriated.