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House | August 5, 2015 | Committee Room | Appropriations Committee

Full MP3 Audio File

15 minutes late, but we're going to start a little bit early. We do not have an agenda, but we're having House Bill 482, and then we are going to discuss as we did the last few weeks the House Bill 97. Today we'll be doing Health and Human Services, and we have some guests so hope you will stay. It's a very complicated part of our budget, and it's very good if you understand it. Let me introduce our Sergeant-at-Arms, we have Young Bae, Jim Moran, Bill Morris, Reggie Sills, Terry McCraw, Warren Hawkins, Marvin Lee, David Leighton, David Mitchum and Cory Brison. Alright, we'll have House Bill 482, and Representative Pendleton, I believe, is our only presenter today. This bill has been well travelled, it's been to Commerce and Judiciary, and today we're going to talk about the Appropriation section of it. Representative Pendleton, you have the floor. Thank you. It's been through all of those committees and back in J2 that was sit into a sub-committee and came back up. We have not had any opposition to this bill but it's taken a long time. I started working on it last July before I was elected, and this bill was desperately needed. I'm going to go over some of the reasons, I've just got a few notes I know it's to appropriate money but you're not going to appropriate money if you don't know what you're spending it for. Only George will vote for something like that, right? okay, what is going on is many employers are treating their employees at 1099, s and one of the cases that was in the news and the observe rules concrete finish that moved the outrun out of Florida and moved here he's got about 80% in the Wade county area of concrete finishing, he's put all this reputable businesses out of business, he has about 14 crews but he only has his foreman and their home office staff on the workers code insurance, so as employees get hurt and disable or killed on the job, life term disability they get nothing. And so that's a serious problem for workers, for the rest of our businesses put out of business and this is just not concrete it's all over the place. If you treat your employees and then sign a contract they are not covered under Obamacare health insurance, they're not covered under workers code, they're not covered under social security any kind of payroll taxes, so about 20 that's about 20% you can underbid, so for government work where it always goes to the lowest bidder the people that really hire their employees can underbid 20% and they always win the government contract. so we want to stop that. What does he do for the state treasury? It's estimated that we lose about $410 million a year in income to the US government and state government in North Carolina. The approximate savings or new money to the state is a 100 and $91 million a year, I think that's very conservative. So 191 verses the amount of money we want to spend and what we're proposed and dial is, that they are going to hire to revenue or hire five people, the director would be the staff these are not half paid people, these are mainly clerical workers they are going to be involved and analyze and reports from the North Carolina and the department of labor and it entails something like the way motor vehicles does of making sure you have liability insurance on your vehicles but they will be analyzing workers cop policies verses the quarterly wage into earning statement

that's submitted quarterly by employers of North Carolina apartment, I'm sorry, industrial commission, employment security commission, and analyzing and that's where you'll find for all of you, you'll see somebody has the workers cop policy from day in but they got to pay all of the reports to the state of 10 million, and they'll dig in looking for the fraud. I think I've pretty much covered it. We have a big coalition of people involved in this and all these associations we've gotten involved with okay and also DHSS in about 40% of the people that are [xx] on child support are independent contractors and they've nowhere to attach that income, so this people go without paying child support this bill pass in the senate unanimously Senator Newton introduced it, it came over here he decided he just won't let it die in our rules committee so we wrote it on our bill, questions Representative Bare Cloth. Thank you madam chair representative Pennington I have just some couple of questions if I may turning to page three of your bill, the section that has to do with determination of independent contractor status. Representative [xx] And if the layman, ordinary citizen is sitting down and reading this bill trying to learn about this situation we have, and see's this eight items and it says that how we determine will or not a person is an independent contractor. And if they happen to be good at laying concrete and they look down here and  they can meet all eight of this items. They've got their own tools, they've got their folks to work with them, they use, they can meet all of this items and so they bid on the government contract and come in 20%-18% under are we condemning that enterprenuer? Not at all we encourage, but as long as they have workers come from their [xx]. In that case there probably going to be treated as independent contractor. Follow up,  certainly, I just, I support the bill and I know this is a problem but government has a way of going overboard and overreacting the situation and there some very honest independent contractors and I hope we're careful not to get in their way. Representative Palison[sp?] go ahead, yes, certainly. Representative Perry [**], we, what is get in their way this all gets passed then we are going to have a meeting of all the players as a coalition that's been involved in this with the secretary of wheer this is going to be housed and sit down and talk about it the way we see it so they'll understand how this was passed and that will help him be able to hire a director in the following employees, they'll understand it, but there are soo many people out there clear violations it's going to be hard for anybody that's no the AHD [xx]  is that time Representative [xx]. Representative Stevens. Thank you madam chair first a question and then I have a comment, first the question most under section 143764 on page three. If you look at a building contractor and again I got a small building contractors and you want to know if the individual is subject to discharge because the adopt one method versus another other method well I think any contractor could fire his subcontractor his genuine subcontractor that does flooring or the dry wall or anything like that at the same time he may regularly be employee of that contractor that contractor may keep you busy enough, but he's honestly are general sub-contractor. He may put sub-contractors in the position, and the contractor will tell you what I want this done this week. So you may catch up some people there that you didn't intend to catch up. In addition there probably needs to be a thorough evaluation of the

this bill along with workers compensation, because workers compensation has gone out of its way to find genuine sub contractors to be employees for purposes of collecting more [xx]. For example there was a major meal and they hired somebody to come in and repaint and redecorate their employee room. They find that person to be an employee of that company even though the only thing he did was repaint the break-room for a period of time. It's a very complex issue that needs to be tackled, and we're saying we're going to sit figure this out after we pass the bill, these are things we need to do before we pass the bill. Representative Peyton[sp?] Representative Stevens. The North Carolina Homer Builders Association is one of the coalition and North Carolina association, the general contractors are one of them. So, this has been thoroughly vetted by them and they feel very comfortable with this. Representative Steven did you have another question? If the committee members we'll remember that we're here for the appropriation part of the bill I have Avila, Brody, Bumgardner, Millis and Dixon. Is there anyone else? Okay, Marilyn and representative Avila. Thank you madam Chairman, one of the things I've heard and I have a comment as well as a question is in the case of insurance a lot of times they will buy insurance get the stuff done and then drop it, are there things in place that will eliminate that possibility in terms of follow up over of anything of that nature Representative Pendelton. Yes and the fact that that's mainly what this [xx] person section will be doing. Madam Chair would you ask him to please speak in the microphone we are having some trouble hearing. I am sorry that what this [xx] person section is going to be doing is looking at this making sure we keep coverage. Follow up. Just a quick follow up we license or we incorporate LLCs in corporations, S-corps, C-corps the whole thing. If somebody wants to do business as an independent contractor, is there not a way we can set up a special type of licensing or recognition of that type of business, and if when he comes to work for somebody if he can't show or if the business is inspected or whoever is doing business with can't show that the people working for him has that permission to work as a licensed contractor they can get into trouble for that. Representative Pendeloton.   I think you'retaking about a sole proprietor. or it could be a partnership they are not corporations but they stand alone this goes back to Representative Stevens they stand alone so the general contractor is not responsible if they get a sub doing floor and whatever that business in there is responsible for complying with the law when they serve some masses  as a sub of a sub then that person is responsible Representative Brody thank you ma'am I just want to just comment on this bill has a major flaw, and the major flaw is that the situation can't be solved by jumping around it and because of the time and quickness I had amendment that I want to plan and I'm going to run it on the floor what is going to do is create what we call a bright line test and I'll explain on the floor but here is what the here's what I perceive on this is, this is a bill written by lawyers, for lawyers, on behalf of lawyers, and the reason I say that is because if you create a situation and then you create a whole system of big test that's a formula for having somebody hire an attorney to go, and resolve it because you're pitting a contractor against a government bureaucracy and that in itself is a problem that requires lawyers so this is a bill written for lawyers we can't solve presented tomorrow on the floor or the next day, whatever it is, but we have talked about this, and  you may not agree with it but I'm going to present it to everybody, and everybody can see, I believe it's just plain common sense and it actually solves the problem. Thank you Representative Pendleton do you wish to reply? Representative Bumgardener.

Thank you madam Chair. Representative Pendleton. Where are you? I'm right here. You were about to give us a list of people that supported this and I'd be pleased to hear it if you would run that down for us please. Representative Pendleton. may I call on my [xx]? Representative Bumgardner, do you care if it comes from the audience, the reply? I thought he had a list in his hands and was about to read off of a while ago so if you do, I'd like to hear it, if you don't, okay. Well, my carpenter would know that better than me, but it's State chamber commerce, Home Builders Association Association of General Contractors, couple of labor unions. Let's see, I don't remember but my [xx]. Could you get that to him after the meeting, could you get him a list? Yes I will. Madam Chair would we make sure that list goes to all members? Yes we will. Can I follow up? Follow up. You also said that after this bill is passed that you're going to get together with all these people and talk about it and figure out what it does, and what it's going to do, and what the consequences are going to be. Did you not do that before this bill and aren't you being presumptuous that this bill is going to in fact pass? Well I have to be positive. Yes we've done all that but I still think it would be a good idea to get everybody Department of Revenue because the Department of Revenue was sort of added in their as a late player. We first added an industrial commission, we thought about putting it as primary, that's where I had it, and then the bottom line is revenue helps revenue collectors on all 100 counties. So they're good at collecting money, so that's why we've got it on the revenue. We want to make sure that they're briefed up on it. Is that fine Representative Bumgardner? And we'll get the list to each member. Representative Millis? Thank you Madam Chair. I have a appropriation related question, do you mind if I ask this question directly to the Department of Revenue? No, let's have someone here from Revenue. Give him just a minute, he's on the back row. If you'd give your name and your position, and then Representative Millis should have the floor. Nelson Freeman with the department of revenue. Thank you Madam Chair, thank you Mr. Freeman. My question is very quickly, just want to make sure that how these numbers right on behalf my constituent when I articulate this legislation to them. What is the actual revenue generated by this bill in the first year and in subsequent years. I heard the phrase $191 million. Isn't that a phrase from you all? The department hasn't made a calculation to that affect sir. Now we haven't done any estimations on that. Follow up, do you want to follow up?  Okay. So It's my understanding that that phrase did not come from you all, and you all do not know right now whether this legislation is potentially in red or in the black in terms of implementation?   Yeah that's correct. Representative Dickson. Madam Chair, my concerns have already been addressed, and at this time I cannot vote in favor of this bill representative Floyd.  Thank you Madam Chair, I think at some point trying to speak, it has to start with somewhere interesting this question and representative Steve will metioned about as it relates to a person renovating and we talking about if a [xx] is throwing down and they have 120 days so 160 days to tear it down and replaced it, then that's understandable that everyone has a timetable that they look in. There are certain things must be done certain things must be met, but on the other hand when we have a person that was hired as a [xx] installer sudden that come this Saturday.

We want to make you a private independent contractor, you have 20 orders on the other hand, you have to come to [XX] don't want to give a day that you must meet the assignment that you did when you was the contractor and everything was done on that end. Now by making you an independent contractor, you then have to provide all the tools that's necessary, and the other thing is that you must provide your own insurance, the other way the company took all of it. So if we can generate a portion of the revenue, if not $193 million that cost us X-amount of dollars to do the staffing and make the adjustment to get the intentionally[sp?], I think we need to start somewhere, so I'm in favor of this bill. And thank you Representative Floyd, and we appreciate the comments, but let's try to stay to it. We have some people from out of town, and I have someone that needs to speak before nine, so if we could move this along, but thank you Representative Floyd. Representative Stam. Yes Madam Chair, I'd like to make a motion and be briefly heard on it. I'm sorry I didn't hear you. I'd like to make a motion, and then be heard on the motion.  Can I make the motion? [XX] I have one more speaker then Can I talk about the first [XX] Yes certainly It's [XX] problem, the money is available, the money is appropriate for the task. It needs to be done as far as concern is probably the best return on investment for any other appropriation we can do the entire session. Rep. Daughtry. Thank you, Madam Chairman. You may have already answered this question, but what about these temporary employment agencies have sprung up in the last 20 years that some business will hire a temporary employee, come in and work for you and they don't pay anything, they pay it through the employment agency where they get it from. How does this bill effect man? Rep. Pendleton? Yes. The employment agency actually employs these people, so their W2 employees of that employee firm. So whoever they go to work, they go into work on the job. They are employees of the other company. It doesn't change it. Follow up. Well the question is if the employer under that scenario provides for his regular employees health insurance and other benefits and the temporary employee doesn't get that. It gives the employer a tendency to want to add more those employees that are from an agency rather than those that he employs and sales is there a way you can comment on that? That's why when I need a new employer that's what I do, I use personnel agency they send me somebody if I don't like them I send them back so it allows them and then If I like him then later I hire him and they come to work for me. Representative Stam you're recognized a motion. I move for a favorable report unfavorable to the original bill. Representative Stam has made a favorable report for House Bill 482, all those in favor will say Aye. Aye. All those opposed? No. And the opinion of the Chair is the Ayes have it. Representative Pendleton your bill will be sent to Rules. Thank God! Thank you. I do have one speaker. I have a, we did not have the Pages so I will get to them after that, but to speak on House Bill 97 I have Rob Robinson the CEO of Alliance LME MCO, if he's present could, if we've made it by your nine o'clock you have the floor, three minutes. Good morning. I'm Rob Robinson, CEO of Alliance Behavioral Healthcare. alliances to public LME/MCO for the 1.7 million citizens of Wake, Durham, Cambrian and Johnston counties. I appreciate the opportunity to speak to you today about the Medicaid fund balance and the critical role it is designed to play in helping us build the behavior house service system, in ways that directly impact the health and quality of life for the very vulnerable populations we serve. I think it's prone to re-emphasize

that the intent of the Medicaid fund balance is to provide the funding necessary to build a stronger more effective service system. These are dollars that alliance in other LME/MCO save by making sure that people get the right service, in the amount, at the right time. This results in better health outcomes and the reduced need for more expensive services. The LME/MCOs were charged by the general assembly to officially manage service dollars to a capitated system while ensuring quality care for the citizens of North Carolina. and we have succeeded in that mission. Now the payoff for the state is the ability for us to use this savings to serve more people in need to enhance and build upon existing services, and support that are proven to help people recover, and to develop new and innovative services that has the potential to offer even better results. As a word of background, Alliance bank began operating as an LME[sp? MCO only two and a half years and ago in February of 2013. We spent the first couple of those years building an infrastructure and creating a strong financially sound organization with a professional staff that we feel second to none. Just as important we spend that time using the new latitude flexibility that are status as an MCO[sp?] forwarded us to truly begin to manage our service system, and the extensive provider network that we partner with. The result is a stronger more responsive provider network and a system based more that ever on evidence based services. With the solid ground work laid we now begun to reinvest our medicaid saving to increase capacity in critical areas to implement enhancements improving programs, and to increase the utilization of evidence based practice services throughout our provider network. For example, our Medicaid savings are being used to provide bridge funding, they keep individuals with severe mental illness or intellectual and development disabilities from being displaced from group homes that previously lost state funding. We fill this gap while the state works on a longer term solution. The savings also provide a long overdue rate increase for intermediate care faculties, ICS, serving the most high need individuals with intellectual and developmental disabilities. This increase will allow these facilities to maintain and increase their quality of care. Our savings also allow us to fund the much needed expansion in our crisis capacity in Wake and Durham counties, with the goal reducing the use of emergency departments by providing a community based alternative for individuals with behavioral health crisis. We're working with NC Start to expand this evidence based practice model to help young people with intellectual and development disabilities avoid crisis situations. Savings are used to accelerate our partnership with major healthcare providers like Duke and UNC to create effective sustainable models. I join my colleagues here today in urging you to preserve and intact the LME NC fund balance, they're visible reflect of necessity LME/MCOs. Thank you for your time. Thank you Mr. Robinson. Let me explain that we have a sheet with the speaker so we have had so many speakers in discussing the differences in the budget, and we've had requests for the names of companies. So there will be a sheet available, if you would like to know the names and who spoke today. We did not have at the time we opened the committee, we did not have our list of pages, so when I call your name if you'll stand up so that the members of the committee will be able to recognize you. We have James Kepper[sp?] from Mecklenburg and he is sponsored by Speaker Moore and William Kepper, I guess you're all related. Mecklenburg conunty and also Speaker Moore. We have another two that are somehow related this is Jacob Lester from Cumberland, and he's sponsor Representative Floyd, and Josiah, Lester from Cumberland and he also sponsored by Representative Floyd. We thank you for participating and we hope you come out of this committee with some good points and some education. Now we will be going to the section of our committee for house bill 97, we have eight more speakers so we will Yeah, we'll have the DHS presentation first. then we'll have the speakers. We will have the explanation before we have the questioning from all the staff.

We have Dave Richards, Deputy Secretary for Medical Assistance. Chairman, members of committee, thank you for the opportunity to be here and I thank you for your leadership on Medicaid Reform in North Carolina. First let me start out with good news, I'm hoping many of you saw it yesterday, our announcement in the report that the Division of Medical Assistance, the Medicaid Program finished with $130 million of cash on hand at the end of the fiscal year. We see this as a very positive development, it's the second year in a row that we have finished with cash on hand, which reverses a trend where that didn't happen and you had to appropriate money at the end of the fiscal year to make sure we got through that. That doesn't happen by accident. I want to make sure you understand that this is a result of the strong leadership from Governor McCrory and Secretary And making sure that our agency D. H. H. S. Breakdown side laws towards the managers medicaid program, they we're hiring the right people to manage as we go forward. We have the ability to do that, that we are forecasting appropriately, and that we have a forecasting tool that accounts for the tools that we must account for and that we have clear objectives about managing that program. It also is a reflection on the work that we do with you, we together look at those forecast, we come up with a solution that we agree upon, and you have for the past several years appropriated the amount of money that was needed to run the medicaid program within that budget. We thank you for that. We think it's the right partnership and we believe going forward we'll only get better at doing that, and we look forward to a continued working relationship. As I mentioned before, thank you for your leadership on medicaid reform, we believe that the bill that you have passed on medicaid reform is consistent with the governor and the secretary's vision of a provider led system for medicaid reform within. that as a right direction to go. We know you have a long way to go in your negotiations with the senate towards a decision on a future plan we will like to bring to your attention. Number one is the management of the medicaid program we believe it's critical that it stays with inside DHHS. as I mentioned earlier the collaborative effort, the breaking down side laws is one reason why we can manage the program better. A couple of examples, so we manage deserve from Rob, a pretty substantial manage care system today, the behavioral health system that you created through the LME MCO providers that  effort is done through a joint management effort between a division of medical assistance and a division of mental health along with the leadership of D. S. S that is how we manage the program and have it successfully go forward. Our work with public health, they are our provider, many of you know locally that public health agencies provides services at the local level but more importantly our division in public health is a great partner in helping us understand trends in health care and how we manage the medicaid program to meet those trends our office of rural health is the place that we had to recruit providers for our rural areas across the state it's also the organization that works closely with our safety net provides to make sure that they are in place and that is a key component of our collaboration wit our medicaid program and you can't help but mention the fact that our eligibility system is a local eligibility system is a local eligibility system through our local DSSs. Our state division of DSS and our deputy secretary for human services our key components on how we manage our program, without that effort we would not be able to manage our eligibility system. I could go on and on, the key component of this is that if you take medicaid out of the HSS a single state agency we would have to replicate those kinds of agreements and rise relationships to make sure that the program continues to be successful, we don't think that as a right approach, we do agree with you and the senate that a focused oversight committee just on a medicaid program is something that allows us to continue the partnership we have with you and continue to merging this program going forward and we think that's the right approach going forward. Also mention that we have to protect what works, we have a really important program called C. C. M. C many of you know that and as a lot of conversation about what happens in the future, we encourage you to do is to make sure that we don't break down what works in North Carolina as we move to a new system, the program not only saves you money, saves us money and tax payers. It is good for patients and whatever we do in the future we mean to make sure that it has a gli[sp?] path to be a part of that future system and does not end as it go forward. Just mention the L. M. C. A system, it is the evolving system, it is getting better everyday, we don't need to break that apart as we're going forward in this

system we're going to make sure that there's and ability for that transition to happen and to make sure that they continue to provide those quality support for people that are very vulnerable as people have been along through development and disabilities. Finally I mentioned the timelines, any plan that you develop we know that they would be compromise going forward but any plan that you develop we all need time to implement. We cant have artificial timelines that require us to do things that one, maybe CMS would not agree to on that time, secondly that we make mistakes on how we develop the contracts and LLPs for a manage system going forward, and thirdly the time to really plan transition well with you both on what works for patients, and for and what works for the system just to make sure that it's managed properly. So in short what I'd say is that we look forward to working with you, we believe that they're pathways to find the right solution to go forward, we support what the House has out and we look forward to implementing the plan that you finally approved. Thank you very much. Thank you. I want to apologize to the committee, it's the complicated system and possibly before you hear our speakers you may want to know what the difference is in the two budgets. So I apologize as for that and for the budget comparison we have Steve Owens. Madam chair question to the chair, will we get an opportunity to ask some questions. Certainly, I just we just excited over the plus balance I'll let him to speak apologize. Question I have may make you take a different tune Mr Owen you have the floor. Thank you Madam chair and members of the committee all I'll do is start with the summary kind of aware of the DHHS budget difference has a micro-level of about 15, 16 and 17 what you see here and I believe is in your handout, is a summary page. Senate budget is about $223 million in fiscal year, 15/16 lower than the house budget, which is some 4.2%. And fiscal year 16, 17 approximately the same amount of difference again about 4.1% that fiscal year. Now I would to move in to really touch on some of the major items. And I believe you have this handouts in your packages. These are not all the items that are different. What I'm going to talk about on this items are either significant from a money standpoint or from a policy perspective. The first item on your list is personal service contracts, from [xx] standpoint this is not a lot f difference. This was shown up in a number of the division within the HHS. In this particular division, central management as you can see there's a non-recurring reduction taken by the senator in the first year, of $3.2 million which produces about 3.2 variance, there is no reduction taken in the second year so it's only about a $7, 000 variance. The second item relates to the saving for NC tracks and the operations of [xx] tracks, in the budget, the house did not have an amount here the senate has approximately $4.8 million reduction in both years. Item five on your list is really to providing funding in an occurring amount. In the first year of the bienium the house budget for, really for the short fall in of information resource management. Item six, the house provided $20 million of non recurring funding for hospital residential care which was not included on the senate budget. Item 7, 8, 9 to gather. What this relates to is how NC FAST development related to child welfare is funded in the senate budget. The primary difference there is what it does is it provides, instead of having the funding or the system provider through the NCF system what it does is acquire an office shell system to provide a welfare case management, child welfare case management. Item 10 is a transfer of grant, funding from the division of public health. And this is a result of the elimination of the office of minority health and physical activity and nutrition branch of division of public health. Item 11 is really a

difference of funding levels between the house and the senate for the health information exchange about the $4.8 million about to use in the biennium. In the division of child development early education, the first item really is the same in terms of money but the house adds 2.7 million dollars on lottery receipts that the senate did not. In the item 13, the Senate provides for more subsidy market rate increase for child care subsidy of 4.2 in the first year and 5 million in the second year. Item 14 in the House I propose to study, the Senate actually proposed the plan for early childhood education and development, and provided none recurring funding in the first year of $300, 000. The main items in public their actually a number of items related to the office of the Chief medical examiner. You can see the difference in funding is only about 400, 000, but their is a number of items in the Senate Budget, there not in the House Budget. Moving on to social services, the first item the house provided for funding for the successful transition of use in foster care 1.3 in the first year, 1.8 in the second, which was not included in the Senate Budget. Item 17 and 18 again go together, the primary difference here is the Senate proposed increasing the age to 21, and the house said 19. You see the difference is really and funding happened on the second year. over $2 million is appropriated from the proposed in the Senate budget 1.2 in the house budget. The medical assistance, the first item is, currently their is a 2% add-on to the capitation rate to fund the medicate risk reserve, which is required by the labor and the contract, first difference here in terms of the money is the Senate proposed do that six months earlier beginning January first of 16 a house proposed July first to 16. The other difference really resides in the special provisions under the Senate provision it also requires or directs the LME/MCOs to transfer cash to their Medicaid risk reserve to get it up to the full amount which is 15% of the annual capitation which the current waiver states is the total maximum. Item number 22 really goes with 24 and 25. What item 22 does really after December 31st of 2016. It would no longer of 15 excuse me, it no extend the TNC contract for primary care case management, and then on 24 and 25 what it does is it takes those proceeds and first increases the rights for primary care and the obstetricians to be at the 100% of the medicare rights and 25 what it does is direct funding to the county health department for care coordination for children. Back to item 23 again the money is not the major differences here although their is a difference in money of about $2.5 million the house was non the senate is recurring the major differences really appear in the special provisions thus Special Provisions 12H. 24 which surely describes the medical [Sp?] before when, in the senate budget, in terms of health choice which is item 26, what this does, is implements or changes payment policy to introduce outpatient settlement for hospital services, for health choice in mental health item 27, the senate proposes to close the right school so this is about 2.1 million savings in the first year 2.8 in the second, item 28 in a non-recurring reduction and single stream in finding over $186 Million approximately in both [xx] which was proposed by the senate. Item 29 The House proposed funding of approximately $5.1 million to help with the that will help eliminate sure fall within mental health. The final item on, in health, which is in Health Service Regulation the senate proposed the faced elimination of the CLM program and their savings as you can see is about 560, 000 the first year and 1.1 the second year. Madam chairperson that concludes my comments. I'll allow question after he's

presentation, but I want to make sure that I did so you could ask any question you wanted to and of course Mr Robinson has gone and I apologize for that, but after this we'll have the department heads and I did go out of order which was the deputy secretary of medical assistance. If you would like we'll just go ahead and ask the technical questions from our presenter now, and then we'll hear from the DHS secretaries and you'll be able to ask there also. So if you would do your questions in that order, I have representative Michelle, what you wanted to ask questions now or would you like to wait? I would want to ask a question of the gentleman, the last gentleman. Okay we'll catch him in just a minute and I'll put you down for that. Representative Stam, you want to ask him to stay. It is regards to. Okay, alrighty, we'll get there next. Can I have Representative Blackwell and representative Stephens.  Thank you madam Chair I've a question maybe I missed it but I, didn't hear you comment on the senate's handling of the difference on item 21 the hospital's and patients based rates. What's that? What that is the elimination in the claim span of education, portion or the add on was made for teaching hospitals. is that sufficient, Rep. Blackwell? Sort of. Rep. Stevens. Thank you and I have basically two questions, item number seven entity first, and the difference being going to a child welfare case management system that's off the shelf, does that mean we're going to scrap NC first? Do you have someone else to answer that question? I'm looking at items 789 and the difference of those two proposal does that mean we're going to scrap NC first and go with an off-the-shelf system? Was that intent to this? Madam Chairman? Yes. Karlynn, they can't hear you. I'm trying, OK. Karlynn O'Shaughnessy, Fiscal Research. The Senate budget includes requirement for a separate child welfare system, which would not mean that you do away with NC Fast. What would happen is they would have a separate system that would have to somehow be integrated with NC Fast. Thank you. My next question is, item three the senate is doing some savings and we don't have the other savings, is there savings? The NC track system use their savings. Rep. Stevens, Rep. Dollar would like to answer part of your other question. Would that be okay? Rep. Dollar. Yes I would just point out and I think the department's done some extensive work on this to your question There are a number of concerns for example whether or not CMS would require the state to pay back money on NCFAST if we went to a different module that was not part of the module planed and I think that although I wouldn't speak on behalf of the local DSSs but it's my understanding that although some of them have lots of concerns about NCFAST several years ago. Now they are pretty vested in the system and they want to build on that as opposed to bringing in some separate system that you've got to figure out how it would fit with NCFAST. So we can get you some more information, needless to say there's a range of concerns on this issue. Now to your follow up. Do you have a follow up now, Rep. Stevens? Yes my follow up was number three, The NCTRACKS system

savings, that seems to be somewhat of a significant difference. Is there is there not? Mr. Stevens, you have the floor Rep. Stevens, there are savings. The way that the House budget handled this was actually there was a flex cut within Medicaid. This was part of the overall flex cut. The department has identified savings and this was separating those out on to really a different division. And that's efficient, Rep. Dobson. Thank you, Madam Chair. And I'll save most of my comments to the end after the speaker speak but I do want to clarify one if we can for someone looking at the budgets and seeing that $223 million difference. I think it's important to point out that the overwhelming majority of that has to do with item no. 28 with regard to one of the previous speakers already mentioned that so, Mr. [xx] if you could just elaborate just a little bit further on that if you can with regard to the cash balances of that, that's in the senate proposal to use that to find operating costs for the LME/MCOs. the senate budget in terms of mental health debt include $186 approximately million production single stream funding. It would require that the LME/ MCOs would continue to provide the same level of services so that that funding would have to be provided within the LME/MCOs finances. Representative Mitchell.  Yes, madam Chair, I've got two questions on item number 10 the office, eliminating the office of minority health, what  does that completely go away or is it being integrated in another section or is just doing away with it altogether.  Mr. Orange you have [xx] to Denisse Thomas. Madam Chair. Denisse Thomas fiscal research.  Oh, Okay. I'm sorry. You have the floor. Senator Mitchell under the senate proposal the office would be totally eliminated, the funds will be transferred to the office of the secretary to be put out on a competitive black graph, but the position and the administrative costs are all related to the office will be eliminated. Clerk, another question? Yes, on the back at the page, item no. 27, the Wright schools, is this doing away completely with the Wright school and what's going to happen to those patients who have been in that school and the successes that that school has had? Denis Thomas fiscal research. Yes, under the senate proposal the Wright school will close effective October 1st, there's also an accompanying provision in the budget that directed the Wright School not to admit new students after this past July 1st, 2015. May I follow up now please? Yes, certainly. That budget hadn't passed so if they've admitted students what's going to happen to those students if you, I guess madam chair the reason I'm raising the question is This is been one of the most successful programs in the state since the vice who's found it, we've had to fight almost continuously to keep that school there because of the good job that it does and every year, I hear for you. Every year it comes up that we they are trying to close a successful program and I'm just raising the spectrum now that this is something that folks have some similarities towards recognizing that this school has done an excellent job those for the services it does for those kids there. I agree with you, representative [xx] representative Dollar would like to speak to that also. Representative Mitchel we find ourselves at odds at a number of issues from time to time but this ain't one of them I just simply want to say that the right school has been in business for over 50 years and success with those children and their families and that model I would agree with you really needs to be replicated around the state and I think the other thing just to point out, some people have a misnomer that just serves one area, they are individuals and families referred to the right school from all over the state. I'm sorry, some people want to know what the right school is, right

school is a residential program for and it's principley sort of teams and in that sort of pre-teen team age group that have very significant behavioral issues in the family and this program works both with the children during the week, residential and then with the family modelling the behavior in the actual home and so they run about I think three sessions maybe a year and there's no question it's the most successful program for this kind of kids and frankly these are the kind of children that would end up in prison, end up in some very violent crimes if they didn't have this opportunity to really change the dynamic of their lives and we can line up speakers for days, families that could come in and the stories, but I know here in the house that's not an issue. We understand it and so we're trying to get some other people to understand. representative Tunner. Thank you madam chair, my question is on item 20 and item 28 are these two related, one is risk reserve and one is cash balances. Are those related? They both applies to the L. M. N. C. S the first one relates to the contract and the labor required when there is a medicate risk reserve which is funded currently with up to 2% add on to decapitation, so in both the house and the senate they propose eliminate the 2% funding but add on to fund at 15%. The difference there is senator and the house as well as they look for other cash balances to be shifted into that reserve so that it equals 15% the item 28, well it's also a plus to the [xx]. Really deals with the mental health funding and a reduction in the appropriation for, or the allocation for the single stream funding, but they both rely it on the MCS. I have representative Bolls[Sp?], Blackwell and Richardson, I'm missing anyone? Representative [xx] Thank you Chair. First of all the first question was answered about right [xx] is not for me. And can you explain [xx] item 30 what the reductions are?   What this does is about August to 2019, it would eliminate the CON process, the Certificate of Need process which providers go through based on the cost of the program and whether it's within the state medical facilities plan, it would eliminate that process of review at the state level, phased in beginning during this biennium but this actually occurs by the end of August. This will eliminate positions, contracts and other expenses related to that Certificate of Need, so definitely they'll need review and approval process. Just a follow up. So, we want to eliminate as you said that the C. O. N, the state under the senate on 1670 we'd only saved 1.1 million that is the cost in the first year released in the first phase and eliminates CON's for a group of providers which will include hospitals, inpatient middle health services, magnetic resonance imaging systems that has a specific list of those when you look at the CON's that were filed what we tried to do is allocate based on the CON's will be filled for approval, the proportion of staff would actually relate to that, so yes it's, it will be that amount of money in those two years. Rep [xx]. Thank you madam chairman I have two I think short questions regarding the right school also, I didn't here if it was said where would these students go if the senate proposal were adopted to close the right school will we simply cease to offer for that programming or is there some place else that's offered. Staff. Denis Thomas Cisco research which that particular program will cease to exist.  Follow up, Follow up madam chairman I don't

mean to put anybody on the spot here but lets say that one of the senate advocates of this closing were here can anybody this suggest what there rational might be. I don't mean to necessarily convince me I'm just curios what's the argument about other that they say close it and we've got wonderful reason for not closing they have no reasons that they advance for their position?  Representative Dollar would be glad to talk with you after this. Being an education chair I think you'd probably know what would happen, representative Richardson. Thank you madam chair, I have two questions if I may will comment basically on the right school. I was a Special Director in my previous career and it was often times that we had students who were so difficult, their behavior was so difficult that we had to find alternative placement for them and the right school was one of those alternatives. If that school is closed, then you maybe forcing your LEAs to look for placement outside of the state which would be more costly than sending them to the right school and that was my comment on that. The second one I wanted to ask on the item number 30, what impact if any, would dissolving the the con, or phasing out the cons have on rural areas like mine that barely has a hospital, and the only thing we have is an emergency room because of so many factors that influences [xx] health centers set up and hospital set up so will this have an adverse effect on a rural area that is already striving to provide any kind of medical care to its citizens. I mean, Mr. Owens? We've not seen any analysis provided that would show the effect of addition of the CONS budget the certificate of accuracy corrects the ability of providers to create services it doesn't require services specific areas, so what this would do is eliminate, if you will, a restriction or approval that folks would go through to actually provide a service anywhere in the state. Thank you Mr. Owens, and I apologize for calling you Steve, but I have seen you a lot since January, I apologize for that that finishes our explanation. Of course there are staffs available for any questions that you may have, and we're going to go to our list of speakers we've already heard from Dave Richards, that if you would come back to the podium, Representative Mitchel has a question. Representative Mitchel. Yes Mr. Richards, I applaud you on your cash balance in making my question deals with what is now at the end of the year old to medicate providers? Representative Mitchel I certainly can't give you an exact list of that. What I can tell you the way, I think maybe a question is around. Had we paid all the bills to providers at the have we paid providers for say June and May billable's and the way this process works we can't pay a bill until we get an invoice from providers so it is not a, we certainly know we have liabilities to people that have provided services in June but we haven't received those, their are going to be liabilities but they will be consistent with what every year happens in July and August to pay for service that will provide a imperviously and  fiscal year Would you like a follow up. Yes, because what concerns me is the figure that the state auditor come up with as to what your liabilities would be. In terms of providers and how that, it was a rather huge figure if I remember somewhere around nine right [**] 900 million dollars and I'm concerned about that. If you. Mr. V Richard. I'm sorry if you will I'll give you a layman's explanation on the differences here and I would say to you that I think both are right is that the way we have to account on state government on how we do the medicate program is that it is a cash basis and we do account on certain liabilities that we know we and pay procedural in the previous year and that's part of this effort and in State Government terms we call it carry-forwards which is an unusual term. But those who are for when we say that we have this $130 million left over. What we don't account for is what people have again services

provided in the previous for year that haven't been built on a state yet because we can't on a cash basis because they haven't showed up. The auditors report last year, that's what she reported. So there was no difference in terms of, we agreed that both of those reports were correct. What I will tell you is that when we report this 130. It's the same as we've done for the past decade and how we report our Medicaid program so it is consistent apples for apples as we're going forward Madam Chair.  Yes Representative Michaux, you certainly can have another follow up but this committee room will be used at 10 and we do have I'm going to be very short on this because the only thing I'm saying is that we expressed glee at the fact that there's $130 million in cast after the Medicaid fund but you need to be careful because like you said the bills that are coming in that you have not yet paid are going to eat into that and you don't know how much that's going to be.  I know. Representative Stam.  I'll pass thank you so much. Now we will hear from the deputy secretary for Human Services, Sherry Bradshaw, you have three minutes Yes, madam. Good morning. Thank you for the opportunity to speak this morning and thank you for the support that your budget gives to NC FAST it's critical that we stay on the path that we started. It goes without saying that we have been challenged to get to where we are today but we have met those challenges head on. Because of the requirements of the Affordable Care Act, we had to change our implementation strategy and move forward with the implementation of Medicaid delaying our child welfare implementation. It was painful but we did it, and we met those time frames we're now in a position to complete all benefit program within NC Fast. This year, with the full support of the General Assembly, we will be implement it and moving forward with child care and energy assistance. That completes all the benefit programs, your budget as well as the budget that the governor appropriates funding for child welfare within NC Fast. For those who have been around a while you know that this is a longer way, that it was the truth impedance for the beginning of NC Fast. This integrated case management system affords child protective services workers the opportunity to access a wealth of information to better protect children. Nearly 80% of those family and children that we see and the child welfare system are getting some other human services benefit. It is that data, that information within the integrated case management system that help social workers protect children. It's not the system it self it's all the integrated data and we're so close to completion. Your budget allows DHHS to follow that timeline which projects completion of the NC First Child Protection System by October of 2017, to change directions as proposed in Senate budget would delay that implementation. A new approach would require additional planning, additional approvals by the federal government, and would delay the implementation by more than two years. And yes, Representative Dollar said something earlier, there would likely be cost settlements with the federal government. Because it's an integrated case management system CMS, the Administration For Children and Families, and our USDA partners have all been contributing to the cost of this integrated system. In addition to moving forward with a stand-alone IT solution, we would also need to determine what interfaces would be required in order for social workers to have access to that critical data that I just referenced that's already in the system. So every time we build an interface because we want data from another place because we have a scandal and trial welfare system, we got to pay for that interface, so this does add significant cost to any court system that we might move forward with and it's cost but it's also risk because everyone of those interfaces creates another level of risk, your budget and the direction for NC fast gives this day the opportunity here again to leverage the

work, to support case management for the ageing and adult population, with the completion of child welfare N. C fast. About 40% of the work that we do for child welfare we can leverage for the ageing and the adult population and we don't talk about that very much but we have nothing that supports that program area at this point in time. With the increase in the program growth in that area that work is essential as well. Representative Dollar also mentioned the fact of counties support, I was able to touch base with the president of the association prior to this meeting Susan McCracken who is also the director in Lincoln county and she shared that there is full support from the association for child welfare case management in NC Fast. I think a number of our directors were here last week to continue with the conversations and dialogue with the Senate about the need to move forward with the approach of NC fast child welfare. So again your budget saves time, money and supports the right direction for case management for child welfare, so thank you for giving me the opportunity to speak and I hope we can move this forward. Thank you with the, this and 27% of the budget we do need to talk about it and we do need a little more time and Representative Dollar I'd like to speak to that. Just a quick announcement in with Chairman Ford from the local government committee who's supposed to he in here at 10 he is graciously allowed us to go to maybe 10:10 or so before we leave here so we can try get our speakers in so local government will be slightly delayed and we'll see if we can run through and get our speakers, we have several people from out of town as well as the department. Thank you. And such questions are at the end if you would not mind staying that extra 10 minutes we would appreciate it. Our next is deputy secretary and behavioral health and development Dale Armstrong and then if secretary of health and human services Dr. Randle Williams will be next. Madam chair, co-chairs and members of the house, thank you for the opportunity to speak with you this morning regarding the current budget considerations before you're on a potential impact on behavioral health, substance use and developmental disability services, for some of the most vulnerable citizens of our state. The historic support by the house for the divisions of mental health, developmental disabilities and substance use, and state operated healthcare facilities during challenging fiscal years has enabled the department to both sustain, and enhance quality services across the continuum. The consolidation of the LME MCOs support of the crisis solution and critical time intervention initiatives the construction of three state of the art psychiatric inpatient hospitals, the focus on veteran affairs, veteran services, and continue to progress towards transitions to community living, but a few of the success stories that we would not have had possible were it not with your support. As you know any vital organization with a public or private will not be sustainable if its strategy resists solely on past successes. With this in mind, any disruption to existing funding or new funding proposed by the governor's budget for community or facility-based services will negatively impact the vital services to a vulnerable population. Of specific concern is the Senate's proposed $186 million reduction to LME/MCO Single Funding for the fiscal year 2016 and 2017. Such a reduction would require LME/MCOs to utilize existing fund balances to pay for services in the current continuum of care severely depleting fund balances and significantly impacting the LME/MCOs ability to fund innovative services, and finance additional mergers. While we understand concerns around the LME/MCO fund balances, we do not believe the Senate plan requiring the use of the fund balances to support a reduction of State funds as appropriate. We are concerned that this effort would result in a disruption of services, and may be inconsistent with CMS policy concerning managed care organizations. North Carolina's LME/MCO structure is an emerging behavioral health management system that has proven successes, but it

is also fragile and this type of change could easily cause disruptions for the system as a whole. In closing, allow me to reiterate our appreciation as a department for the proven support demonstrated by the House for the citizens and families of North Carolina who depend upon the behavioral substance abuse and developmental disability services provided by the State and the network of community providers. Thank You. Thank you, and Dr. Williams. thank you Madam Chairman. My name is Randall Wiliams, I'm Deputy Secretary for health affairs, started about a month ago. I am very much appreciate hand me over, if I've learned anything in taking care of patients for 30 years which I was very blessed to do it is that it's so important to be available to patients and that you have to have access, and that's so much what we're trying to do in public health and rural health NDHHS and that is that. When I started medical school, a physician in Callaway told me that, Rendall you'll always be judged on your availability, your alphability and your ability and it may be in that order and that's because it's just so important that we get access to patients, and so that's what we're trying to do. Again in the first month that I've been here, it's been very, very important to me to listen to people and so one thing that I certainly hope you'll do is passed out cards with my cell phone in it, we may be making history today, you're getting a doctor giving you his cell phone that you can call me any time. Allow me if your part of the pun to tell my friends that we make house calls. So please call me at any time, if we can help you with your constituents or services. But my main message today is, we travel around the state and we've been to Anson County and Mitchell and Rockingham and Purky and Perquimans and, I was in Johnston yesterday today [xx] tomorrow, ten on Friday is that, it is so important now for therapeutic alliances that we deliver physicians and nurse practitioners to the areas. My request today for you is that organizations and budget, there's a proposal to put rural health within that department of public health, we think that will be a mistake because we think that for us rural health is so much the tip of this spear, it's where our medicate or social services and our public health all gets delivered, it's the point of contact between our 10 million patients and the department, so we very much would like to keep that autonomous. The second thing is that there is a proposal before you for electronic death registration which we think is vital, we're only one of four States that don't have that. The first weekend I worked over July 4th, I worked at the Medical Examiner watching the autopsies because it's an integral part of what we deliver to the people of North Carolina, and again, that would be crucial to us we try to get accreditation and serve all those people that's affected by it in North Carolina. And then the final thing again is just that there have been some organizational proposals for public health, and we would ask that the due consideration be given to those because we do think the way we're set up now allows us to interface with federal agencies, to interface with NGOs, and interface with our patients in a way that's very effective. Again, you have my cell number on the back of that card, if we can ever be of any service providing you data or offer to your constituents and just please call. Thank you. Thank you, Dr. Williams. We have four people We would like to pick data out of town and we want to make sure we get them in today if we don't get them the earliest we'll continue it onto next week, but if Lisa Wainwright] and Shawn Hawerton with Saxon County and Andrew Steinburg with the Youth Village and Jessica Lang with Youth Scholarship for Youth Villages you have the form Miss Winan's Thank you Madam Chair and members of the committee for giving me the opportunity to speak today, I'm really suing right, I'm CEO of trillium health resources which is the 24 county LME MCO of East and North Carolina First I want to thank you very much for the support of mental health development disability and substance use disorder services in the house budget also to say that we in [xx] community are 1000% supportive of health approach to medicare reform as contained in House Bill 372. I'd like to speak to the Senate budget provision to take $186 million in

each year of the biennium out of LME cash reserves to supplement state funding and behavioral health an IDD services. We believe this proposal fails to recognize the different functions of an LME/MCO it also assumes those cash reserves are available to use for this purpose and we don't believe that they're. We manage federal, state and local funds. Those funds have very different purposes as well as different rules that govern their use, but one of our basic functions for all funding sources is to pay providers promptly this General Assembly enacted Senate Bill 208 in 2013 which requires us to pay providers within 30 days of a properly submitted claim, my organization has a budget of $428 million so to have just 60 days worth of cash on hand to ensure that we can pay those bills promptly requires $71 million. Medicaid funding for behavioral health is delivered under agreement between the state and the Centers for Medicaid and Medicare Services through the 1915 BC waiver. The state is contracting with us to operate that waiver in an at risk basis. So action taken by the General Assembly to direct the use of Medicaid funding must be consistent not only with state law but also with federal law and we believe the Senate position is inconsistent with all of those. The promise of operating the waiver in the public sector was, as Mr. Robinson stated earlier, the ability to address gaps and needs in the system without the General Assembly having to appropriate additional money and we believe that  promise is being realized now. My board has obligated resources to build new programs throughout eastern North Carolina to address pressing needs. We also can use fund balance to address smaller but chronic needs in the system, for instance, we just funded a 4% increase in our ICF/IDD providers to address a recognition that those rates have been stagnant, and we were also partnering with the department around the bridge funding for group homes. Finally I would like to note that if the $186 million is used to supplant state funding and if that funding isn't available which we believe to be the case, then that represents a loss of over two thirds of state dollars that flow to LME/MCOs to pay for services for individuals who aren't medicate eligible, and in my area that would impact approximately 4500 people and put additional pressure on both emergency departments, the jails and other services. Thank you very much for the opportunity to speak Thank you Sean [xx] he's with the senate county regional hospital. Hello, thank you for the opportunity. Sean Harrington, I am practicing Physician and also CEO of Salina Regional Medical Center. Like many rural hospitals, we're one of the largest employers in our county, what affects us directly then it affects the economy of [xx] county. I'm here to share that the eliminations need program will have devastating impact on real hospitals like mine, on the surface it would appear that allowing services into areas with no demonstrative need increase competition and lower cost, unfortunately this isn't a fair and equitable competition, these four providing new services don't have the same set of rules and would focus on patients with commercial insurances, this wouldn't provide care, correction they wouldn't provide care for the unprofitable, indigent and medicate patients. Caring for these indigent patients is part of our mission, this is jeopardized if the only patients we received are [xx]. Currently 25% of our patients have commercial insurances, and consequently this is a very small market to compete over for [xx], our biggest threat with elimination of certificate need would be the creation of unnecessary inventory surgery center and new physician owned diagnostic centers. An inventory surgery center alone would easily have a negative $5 million impact on us. New diagnostic centers would have a catastrophic impact on us. If every physician can purchase an MRI machine, many will. And they will used, the cost to the health system as a whole will go up. A wise attending physician once told me, don't make money off your recommendations to your patients. When physicians make money off their recommendations they tend to recommend what makes their money. Health Care cost will go up as a result. This increased services that the elimination of certificate need would allow for, won't lead to decreased cost for increased quality. For elimination for certificate need will result in inequitable competition that will close real hospitals and eliminate many jobs. So I appreciate you for giving me the time to speak, thank you. Thank you, thank you for [xx], we appreciate it.

Andrew, and I hate it when people can't pronounce someone's last name, but I'm the world's worst. You're with youth diligence I know about your villages and I can say that, so if you give your name and you have three minutes. Thank you. Absolutely. Thank you very much for this opportunity. My name is Andy Starburger [xx], I'm the state coordinator of our transitional living program with youth villages you feel it as a non-profit organization which provides evidence-based and outcome-based services to at risk children and young people in North Carolina and 11 other states United States. I'm here to speak to the bill on young people transitioning out of the foster care system. Our evidence based transitional living service. What we call YV life set helps young adults transition successfully from [xx] care system into adulthood. This population of young people is one of the most at risk group in our nation. Researches shown that without transitional assistance, they are more likely than other young people their age to drop out of school, become homeless and incarcerated pregnant and unemployed. There are currently no uniform program in North Carolina to address the needs of the approximately 500 young adults who exit foster care every year. The Youth Villages Life Set Program, assigns a specialist that typically meets multiple time per week in the community with the young person. They work on goals around job seeking skills, finding housing, promoting educational success and cultivating natural supports. with the low case load, our specialists are available 24/7 in cases of an emergency for our young people by contrast most traditional services might include a visit with a case work only once a month, a rethink clinical trial of this program by an independent elevator found that after one year our program boosted earnings, increased housing stability and economic well being, and improved outcomes related to health and safety for a population of very disadvantaged young people. 22% of these youths were less likely to experience homelessness, and 17% were earning more than their peers. The other from our study also showed improvement in some of the primary outcomes related to health and safety, including improvements in mental health, and a decrease in intimate partner violence. As we've seen from our experience in our home state of Tennessee, where we've extended the age of foster care to 21 and we also provide [xx] statewide. The outcomes for these young people have dramatically improved our private funding partners have pledged at least $ 7 million to the state of North Carolina over the next several years to make this service available for all of the young people edging out of the system in North Carolina. I greatly appreciate the support of this program and your willingness to make it available state wide in North Carolina, thank you very much for the time. Thank you Jessica Lance, youth scholars, youth villages you would have three minutes. Okay. Good morning, my name is Jessica Lance and I have successfully completed the Youth Villages Lifestyle Program. Before I started working with youth villages I felt like I had no solid support system and no one I can really rely on when I needed guidance or advice I felt like I was constantly being harshly criticized and judged by the few people that were in my life, and I had burning questions about life that I felt like I needed answers to. I had questions about college, how to manage my finances, how to find full time employment In order to support myself and how to manage my time, but I had no one to turn to for this answers. Before Youth Village I always had a urge to be successful but I felt like success was just out of my reach. Once this villages became a part of my life they immediately started helping me make plans to achieve my goals as well as teaching me lifestyle skills. Youth Villages assisted me in everything including obtaining full time employment, enrolling in college full time, managing my finances and helping me rebuilt my  relationship through   my family members. Since I've been with this villagers I have archived an associates degree and criminal justice technology, I'm more engaged to my community and different community service projects. And I have worked through the promotional process ladder of Rose just for less from being a part time Sales Associate in 2011, to being a full time Assistant Store Manager of a store that makes roughly $7 million a year. I am very grateful of your support for this Transitional Living Program because I really cannot even imagine what path I would have gone down if I did not have a strong group of supporters. for debating me and pushing me to reach my full potential and all my goals thank you for this opportunity and I hope you see how positive programmed youth villages is for our youth and young adults, thank you. Thank you Jessica, and we'll be proud to legislate for your of the senior success. We have two people I would still like to get in and I have Dr. Conrad Flick with the North Carolina academy of

family physicians and that its Wake county and last meeting it's my understanding we missed Russell Jones, of the North Carolina Continuing Care Resident Association. Is he here? here, okay. Alright we are going to try to get both of you okay? Doctor Flick. Thank you, Good morning, thank you for the opportunity to speak with you this morning, my name is Doctor Conrad Flick and I'm a full time practicing family positions in Wake county for over 20 years and today I'm here representing over 3000 family positions more than 3000 across the state and as a President of the North Carolina Academy of Family Physicians. First, I'd like to thank the members of the House for your recognition, and the desire to build on what is working with Medicaid in North Carolina, especially our award winning Patient-Centered Medical Home Model. This model allows us to identify high cost patients through a robust data analytics, and receive care support from our local care case management system and infrastructure. The data analysis and the coordinated care management, work together to help us make the most cost effective care decisions for our Medicaid patients. It's essential that we continue to build upon this model as we move forward. Let me give you an example of a medical home model success. It comes from a colleague friend of mine in the South Eastern part of the State. In this instance, the local care management network identified a patient who had multiple chronic illness and many visits to the emergency department. They struggled to obtain the proper medications they needed to take, to maintain their conditions and to keep them out of the emergency department a local nurse care manager, her family physician and the network pharmacists work together to help the patient understand why she needs to take her medication to control her conditions, they created a medication schedule for the patient to take home with her and they provided a patient with follow up care with my friend in his office, the outcome the patient learned to better manage her conditions and avoid utilizing the emergency department, saving thousands of dollars and improving the quality of care, this case took a lot of time and effort by at least those the health providers but it pairs to comparison with what had actually caused the state to cost unnecessarily emergency room visits in fact last year in North Carolina medicaid recipients enrolled in care management received showing 10% drop in number of emergency room visits compared to those not under care management. As you deliberate the budget and negotiate a medicaid reform plan, I ask you that we maintain North Carolina North Carolina's data and analysis local primary care case management throughout the transition through a new model of care they would ensure that any new plan uses our physician medical home model and we make sure that primary care is the foundation of a reform plan by ensuring all positions especially familly positions to take care of the most rural part of the state, have the resources they need with minimal ministrated burden, I thank you for your time, your effort and your service to the state and through your consideration through this matter. Thank you. Thank you Dr. [xx] and Russell Jones. Thank you madam chairman and other members of the appropriation committee, thank you for the opportunity to speak briefly on the reinstatement of the medical expense reduction. I'm Russell Jones and a member of the legislative committee of the North Carolina continuing chair residents association, we represent almost 20000 residents living in non-profit continuing care retirement communities, usually abbreviated CCRVs across North Carolina. I first want to thank representative Rick [xx] who is the primary sponsor of 46, senior tax reduction for medical expenses, for recognizing the impact of the elimination of the reduction from medical expenses for senior citizens. we believe our significant in state income taxes was unintended consequences of goal of trying to reduce taxes for the general population, for htose of us with high medical expenses, we have been caught in the middle, our legislative committee has spent the last last year survey residents and CCRCs to try to get a handle of how the elimination of medical expense reduction has personally affected them the hardest hit are single women in their mid 70s and older who averaged an increase of about $1800 on their 2014 state income tax. Most of these living on fixed incomes and to pay $1800 in April and then another $1800 spread throughout this year to prepare for their 1025 taxes as we replace the hardship on them.

Another group, smaller number has significant but in experience of families where one the couples is suffering from Alzheimer's or other forms of dementia. The care for many of these residents can run from $6, 000 to $9, 000 a month which equals $72, 000 or $108, 000 on an annual basis. We want you to know how much we appreciate the reinstatement of the medical expense adoption in your budget we were terribly disappointed when the senate version placed the cap of $20, 000 not only medical expenses but all of the deductions. Their inclusion of the medical expense deduction we feel they had acknowledged the problem but not the sovereignty of it, in the most written survey of 560 residents allowable medical expenses under federal contractions, total $13, 387, 862 reductions exceeding $20, 000 accounted for 72% of that total. We ask you to continue to hold fast on your budget provision which would reinstate the medical expense reduction with no cap, thank you very much. Thank you and we apologize for not being able to get you this time and and we thank Representative Ford for allowing that to happen, this time Representative [xx] I believe you have something Thank you Madam Secretary, chair person, I might get a pay riser? I'll give you a pay riser. I actually wanted to acknowledge the leadership from HHS they inherited a number of challenges that they've to deal with, we've criticized them, we felt like they needed that criticizing criticism, we push them, we've ask hard question but I want acknowledge publicly the job that they're doing. To be who we are today in a fairly short period of time with a surplus and and you can debate abilities but the fact is the government is on a cash flow basis. They've done a commendable job, we appreciate what they're doing and I really want just to acknowledge publicly what they are doing to keep us in North Carolina providing the best services we can to the citizens that are entitled to this program so thank you very much for what you are doing Thank you Representative Lumbert that was needed. I  also want ask the [xx] and I want thank it's staff of our committee to run over we are here today to set up and we really appreciate in our sergeant-at-arms and want to thank Representatives for [xx] and committee members for allowing us we will meet again next Wednesday, we will finish this up, we will try to have people available. If you have urgent questions, we have a list for that, it will will be sent to you in pdf form and no further business before us; the meeting is adjourned.