Publisher's Note: This post appears here courtesy of the Carolina Journal. The author of this post is Theresa Opeka.
A House Bill that provides funding for the Medicaid rebase in North Carolina is headed to the Senate floor for a vote, after passing in the Senate's Appropriations/Base Budget Committee on Monday.
House Bill 562, Healthcare Investment Act, will provide an additional $90 million in recurring funds for the rebase on top of the $690 million in recurring funds already set. Additionally, the bill includes $42.2 million in recurring and $34.4 million in non-recurring funds for administration costs. It also eliminates vacant positions from the North Carolina Department of Health and Human Services (NCDHHS) as a cost savings of $34 million, and to help offset some of the cost of Medicaid. There is also $1 million appropriated for the state auditor to determine Medicaid eligibility redetermination on the local level.
NCDHHS would also be required to develop a plan for cost savings and efficiencies within the Medicaid program by engaging stakeholders, particularly with prepaid health plans.
Finally, the bill also includes the latest round of funding for both NC Cares and NC Children's Hospital, which was established in the 2023 budget.
The NC Children's Hospital would establish the state's first freestanding children's hospital. In 2023, both the House and Senate approved nearly $320 million over three fiscal years for the hospital. This bill would release $103.5 million to fulfill the third-year obligation.
The NC Care initiative supports rural hospitals and establishes three rural care centers.
The House and Senate previously approved $420 million for NC Care projects, and this bill would release $105 million to fulfill the final obligation.
$600 million was included in the mini-budget, which was signed into law in August by Democratic Gov. Josh Stein, to support both the Medicaid rebase.
North Carolina Department of Health and Human Services also issued a press release, saying that while $600 million was included in the mini-budget to support both the Medicaid rebase and the Medicaid Oversight Fund, it's not enough, adding that the appropriation equates to a shortfall of $319 million for the Medicaid rebase.
"It's really important that we fund this rebase number, not just the $690 million but the administration costs that go along with it," Sen. Mike Lee, R-New Hanover, said during the meeting.
"It's incredibly important that we, as a General Assembly, live up to what we told the public about rural healthcare in North Carolina. In 2023, we committed to spend money for the benefit of our citizens all across the state, not just in our major metropolitan areas, through the NC Cares program."
He also said it was important to acknowledge the same with the Children's Hospital, whether members agreed with it or not.
The money earmarked for the two projects is currently sitting in the ARPA Temporary Savings Reserve.
"If you would like to know whether a children's hospital is necessary in North Carolina, come find me after this meeting because I'm going to Cincinnati Children's [hospital] in October for my 15th or 16th year, going there quite a bit, sometimes seven, eight times a year for my child's healthcare," Lee told members.
"It is vitally important, but that's not what we're talking about today. We had that argument in 2023, and we made that decision. And so those funds need to be appropriated now."
Sen. Val Applewhite, D-Cumberland, asked why it was necessary to have the State Auditor's Office conduct an audit to determine Medicaid eligibility if social services in counties are struggling due to the lack of employees.
Lee responded that this would actually help the counties in that type of situation.
Sen. Ralph Hise, R-Mitchell, told members that former state Auditor Beth Wood performed an audit several years ago on 10 counties and evaluated their Medicaid determination. The audit finding was not positive for the state.
"When we were looking at the risk of the federal government deciding that that's a liability that is on the state, that we have to pay the feds back for all those, it would be catastrophic in the billions of dollars just from those 10 counties," he said.
"I couldn't imagine the entire state, and before those changes go into place, we have to get a system that is accurate and in place for Medicaid determinations."
Sen. Jim Burgin, R-Harnett, added in terms of the necessity of the children's hospital, that he was told last week by the secretary of NCDHHS that 5,000 children on Medicaid alone left the state for hospital care. He said they will try to find out how many others have gone as well.
"I would just implore us to put aside these differences because I understand where the passion comes from," said Sen. Lisa Grafstein, D-Wake.
"I support it, but in this moment, what's really needed is a clean Medicaid bill, the rebase bill that we can get the House to agree to. And I just would ask us all to kind of like turn the turn the heat down a little bit and try to get to that place because if we end this week without an agreement, we all know there are catastrophic consequences and no Children's Hospital. So I just would like us to rethink the approach."
The committee passed the bill. It now heads to the Senate floor for a vote.
