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Senate | May 17, 2016 | Chamber | Senate Session

Full MP3 Audio File

[SOUND] Sergeant arms close that door please if you would. Good morning everyone. I guess this is the first committee meeting in the short session. Ralph is that it for HSS or anybody right. Thank you. We wanna mention our pages drew fisher from MorselDrew/g are you here. Stand up and smile for us and wave your hands for us their buddy. These are from Moore sponsored by senator Curtis. Noah are you here. Thank you Noah I appreciate you for being here. And ShreDurry/g is the new senator from Raleigh. I haven't learnt to pronounce his name yet but I do recognize him. Anna Blunt from Clinton. Brent Jackson's sponsoring her. Hey, Anna. Jennifer Chen from Chapel Hill. Hello, Jennifer. She's sponsored by Senator Woodard. Kate Taylor. Kate, you're there. Thank you. You're from Wilson. Good place to be from. Senator Newton is sponsoring her. Sam Lucas from Winston, Salem. Hello. Good morning to you. Senator Lowe. And then Hunter Smith from Mauxville. All right . Thank you and Senator Brookes, I guess. Don't know that but we'll move forward here. Our first bill is to expand hospital disclosure requirements and there is three amendments on this bill, and we'll take the first one. Senator Heiss, can we take your technical amendment first and then we'll call up Senator Wells? Senator Wells, you wanna explain the bill sir. Come forward and just explain the bill and then we'll take the amendments. I'm sorry. >> Thank you, Mr. Chair, members of the Committee. While their talking about tax dollars upstairs, I thought we might do it as well on the fifth floor. We're talking about $300 million in tax dollars. That is sales tax refunds that are sent back to health care providers in exchange for services that they provide. And 100 million of that goes to local governments, about 200 million of that goes to state governments. We have been trying for three years to get some kind of accountability on how we know what's being done with that money. Specifically how much of that is being done for what we call charity care. So this bill is an expansion. There are existing disclosure requirements That have been in place for years. They are not being completely followed or they're not being followed in a manner as intended. So you we'll see some sections of this that may explain that but effectively we're asking that those non-profit providers give us a breakdown on four numbers when they do their financials. And if you ask staff to go through the bill, I'd appreciate it. >> Okay, staff you'll just expand on that please, ma'am. Ms. Matula. >> If you'll notice on your summary, we sort of went through the flow of the bill and that might be the best way to go through the bill. Essentially it amends the current law which is what general statute 131E 214.14 subsection A of this amended statute requires a disclosure of financial assistance policies. One A1 disclosure of financial assistance cost, A2 disclosure of patient revenue and A3 disclosure of income. In all three of those sections the entity is required to provide the public with access to the information to submit the information annually to DHSS. in time and format required by DHSS and to display the information in a conspicuous place in the organisation place of business. DHSS must post that information it receives in a single location on it's website, and in a manner that is search by the facility. Sub section A4 pertain disclosure of spending per capital assets and improvements, and you'll notice that it defines or it requires the capital assets and improvement to be broken down by the following categories. Additions to land, land improvement building movable equipment and fixed equipment and And their are different reporting requirements for that,

the information must be provided to DHSS on annual basis. For section 85 it requires the DHSS to calculate and post on it's website the quotient obtained by dividing the facility's total amount of financial assistance cost by the sum of the facility's total net patient revenue, as reported in the facilities financial statements. Subsection B of the bill amends the definition section. It specifically provides a definition for covered officer. It amends the financial assistance cost definition to provide that financial assistance cost is defined for hospitals or ambulatory surgical facilities that are required to file for schedule H, federal form 990. And for those that are not required to file the form, it leaves the definition In place for financial assistance policy amends the definition of hospital to exclude three types of facilities includes the definition for net operating income, total net income, total net patient revenue and total spending for capital assets and improvement. Section 2 of the bill appropriates 150,000 for the 2016/17 fiscal year to be used for information technology costs with the department's responsibilities. The effective date on section 2 is July 15, the fiscal year, and there remainder of the bill will become effective October 1st, 2016. Thank you. Are there questions? Senator Davis. >> Thanks, Mr. Chair. I just have a question regarding the amendment. It's just more technical than anything. >> I don't mean to interrupt you sir. Senator Hise is gonna explain The technical amendment. And then Senator Wells/g is gonna explain his technical amendments so that may answer your questions. Any other questions so far? Senator Robinson? >> Thank you, Mr. Chair. Just in general. In terms of disclosure, isn't all of this information already available? Is it all Available from hospitals and are they required to report this information? >> Senator Wells. >> I'll start and then staff may fill in. There are different levels of requiring. We have passed a requirement That the hospital report the numbers available on their 990s. Some hospitals came back and said, we're not required to file a form 990 therefore we're are exempt from that requirement. For instance, hospital authorities are not required to file a 990 so they were not reporting. And then we've had some Had some other instances where hospitals say here's the information, hit this link and you can find it yourself. We're trying to get it down to some four specific numbers that come in to the central clearing house, that would be HHS, and we can get that data. Cuz it's the state that's providing the $200 million in tax refunds . So we're trying to tie those two together. >> Senator Robinson, follow up. >> Thank you, Mr. Chair. Now the 150,000, does that mean we've got to hire staff to do the IT part of that or what? >> I expect there will be some Staffing requirement, yes. A Lot of that will depend on how the data comes in from the hospitals. Again, four numbers that should be a pretty simple thing to send in and fill in. I think the staff requirements would be more around making sure they get the data anytime Timely way. >> Okay, Senator McKissick. >> Thank you, Mr. Chair. A couple of questions. Senator Wells, let me ask you this. The methodology that is proposed bill in terms of coming up with the actual net profit of hospitals How does that compare to the federal guidelines that are applicable at this time? Are we using the same methodologies? Are we approaching things in a way that maybe more challenging for hospitals to pull together the data and provided it? I like the idea that We're getting out there and encouraging transparency and at the same time we're using two completely different methodologies to reach the same bottom line type figures. It could be challenging and be like comparing apples to oranges. >> Our intent was to make this simple as possible But I might ask staff to address if this is the best way to do it.

>> Teresa [INAUDIBLE] of analyses division staff. Senator McKissick, I do not know how cumbersome this would be for the hospitals and how it differs from how they currently report information or not. Perhaps there's somebody Somebody from the hospital association that could address this question but I do not know. >> Is Cody Han here today? I assume Cody is. Cody, can you help me with this and likewise [INAUDIBLE]with me the position of your members as it relates to this proposal? >> Thank you, Senator McKissick. I will try to get your question answered Cody, if you will state your name for the record please and respond to how cumbersome this would be for the hospitals? >> Happy to. Cody Han, with the North Carolina Hospital Association. Thank you for the opportunity. We don't really know how cumbersome it will be. As Senator was alluding to earlier, most of this stuff is filed somewhere already. So we're already preparing this data. Our concern is what it's going to cost us to prepare it a second time to submit to the state portal that where most of us are already submitting to anyway. I can't tell you how cumbersome it's going to be or what the excess cost will be but there will be a cost and to duplicate the data we're already submitting. >> Follow up, Mr. Chair. >> Follow up. >> Let me ask you this, Cody. I see a lot of details here talking about if you're making improvements to land or buildings, or movable equipment, fixed equipment, [INAUDIBLE] category. You have to go back and see how the funds were set aside or were you borrowing from, current operating surpluses. Are you doing that pretty much already, because I mean if it's just a matter of reformatting the information, it's one thing but I would hope that we'd be trying to get the same bottomline Calculation whether they're having two competing methodologies that provide different results or outcomes. >> Senator Al/g. >> M Chair? >> Yes sir go ahead. >> Cody Han from the Hospital Association. Senator I don't believe that we're clear yet as to how that will work to make sure that we're not having to do new data to make new numbers for this submission. All of our construction cost if bonded and almost all of them are bonded, run through the Medical Care Commission. So we have to submit that data to the Medical Care Commission to justify the expenses as bonds. >> Thank you comment Mr Chair >> Go ahead. I would hope that we could work with with Cody and the hospitals estate and make sure that we do have some real direct answers as to the methodologies that are being used. So that we're not unduly burdening the hospitals and also lets end up with consistent methodologies for Evaluating and getting to that bottom line cost. Cuz I see a lot of details in this bill which would appear to be appropriate, but it would also appear to be somewhat challenging to pull it all together. I mean I wouldn't want to end up with the federal method, producing one bottom line number, the state method producing a different bottom line number, and hospitals having to being over burdened in the process. I support patient transparency. I mean that's critical. So I appreciate what you're trying to do, but I hope these details can be worked out as the bill moves forward. >> Okay thank you senator Mckissick. Senator Mckissick you're this bill requires that they shed the light of day in a separate format for the refunds that we give to the hospitals. And you'll recall in budget cycles that we've had over two or three times, this is been an issue of whether to continue to To allow non-profit hospitals to receive these sales tax refunds. In my opinion, if they are giving the proper information and fully being transparent. It's less likely that all of a sudden this big number gets pounced upon when the budget cycle starts and the hospitals can be left alone and manage what they're doing. That is my hope that comes out of this bill, so we will know exactly where that money is and it's being used properly, and it's less likely for politicians and/or budget writers to dive in on it to reduce their sales tax refund. Senator Davis? >> Thank you, Mr. Speaker my question has been answered. >> Thank you. Senator Raven. >> Thank you, Mr. Chair. The transparency in relationship with reduced abuse of the system is all good. Did we do a Swag on finding out how cost effective this change might be? In other words, the doing of the process we put here,

how much do we think it might save? Does it make it a sensible thing to do? It's easy to do it intuitively and think it's gonna happen but have we done any analyses to see if there's gonna be any savings and if so how much? >> Senator Wells. >> I think at this stage, determining, or swagging as you put it, savings would be a little premature. We're dealing with $300 million in tax refunds. We're just trying to understand how those refunds are being used. So at this point, we're just looking for information. It's purely about disclosure. This is not a new subject. This has been a requirement of at least those that file 990s for years. We have not had feedback or I have not had feedback that If we do it or we need to tweak this or that thing, it would be a lot easier for us to report and for HHS to compile the data. So I'm open for any suggestions along that line. But right now we're just trying to find information that has not been available. >> No real savings, Senator, justifies the $300 million dollar tax refund and whether they are spending it, and if they're doing it properly. Some of the numbers are already there, it's Codie/g alluded to that they can extract plate from. We don't want redundancy, but Senator Well and Senator Rucho feel like this transparency will be long term better off for us to able to understand where that money is. Senator Hartsell. [BLANK_AUDIO] >> Thank you Mr. Chairman something Senator Wells said a moment ago. [INAUDIBLE] made me think about something. He spoke about hospitals authorities who do not file 990s.I only know of one hospital authority that doesn't file a 990. I assume Because it is [INAUDIBLE]. There's only one hospital authority that operates in the hospital authority in the state that I'm aware of. But my question is, when you speak about hospitals are you speaking about individual facilities in specific locations? Or you're talking about the authority as a whole? I see some definition of hospital here, I mean will that one particular hospital authority file one particular document, or would it have to file multiple disclosure for multiple facilities because it operates in multiple areas? I'm just curious about that. >> Staff can you respond to that please? >> I do not know, perhaps the hospital association could answer that question, I don't know if they have multiple disclosures for multiple places or just one. [BLANK_AUDIO] >> Senator Walls? >> And I'd expect it might have to do with how they apply for the sales tax refund, that's what we're trying to get down to, is if they're applying for sales tax refund, is an umbrella, we don't want to see the numbers for the umbrella, that's during the application then they get the refund. If they're doing individual units, we'll see the same thing applies. >> Senator Hartsell that hospital authority that you're speaking of, there number with like 59 million in refunds, most of it is on sales tax refund due to capital, projects, I would hope that they wouldn't have to submit multiple reports. That they could just state where the money has been spent and then submit that as a report. If there is clarity that needs to be done and you feel like there needs to be, then we can work on it between here and the floor. >> I'm just concerned. ->> I hear you. >> Whether it's one or the other, how does it that work cuz I know a number of these entities have private, non-components associated with, public authority components and I don't know how that works. >> Okay, we'll have staff work on that and perhaps I can refer to you and you give them some clarity on that, I'm sure Senator Wells [INAUDIBLE] to doing that, correct sir? >> Absolutely. >> Thank you. So we have clarity in the statute, any other questions? Senator Hise. >> Thank you Mr. Chairman, just as Senator Hartsell has pointed, when we've done this with sales tax refund and others, it depends on how they expend the funds in order to achieve the exemptions for sales tax. So if they did it all under one system, have a higher number, but if they broken under two separate systems and expanded it under two separate systems, there will be two separate reports, that's consistent with what we've seen and we've put caps on the sales tax amount that's coming in money can't move to other divisions as stated under the cap. But with that said, and others, just want to send forth an amendment.

>> Yes sir, send forth your amendment. >> What you have here before you in the amendment is really a technical change it clarifies the reference on page two, line two, subsection 84, that should have been subsection 85. That's coming in an making sure that we clarify whether we're talking about a subdivision or a subsection later on in that same page. >> Any questions on the amendment? I hear a motion, Senator Wade makes a motion that Senator Hise amendment moves forward in committee, all those in favor say aye. >> Aye. >> Opposed? Amendment passes. All right, next amendment, Senator Wells, number three is that the one you wanna go with?>> The one that says version two. >> Excuse me version two, go ahead. >> Version two that amendment clarify that this applies just to hospital that are operating on a non-profit basis and are getting refunds, and any hospital that's operating on a full profit basis is not affected by this reporting expansion. >> Members SH-18 he's talking about. So again this does not include full profit hospitals in this transparency bill? >> Yes. >> Okay, we have a motion from Senator Wades, move forward, is there any questions of committee? Takes full profits out of the flute. Hearing none, all those in favor of ASA-18 signify by saying aye? >> Aye. >> Opposed? the ayes have it. AS-18 passes, being incorporated go ahead, Senator Wells your next amendment? >> Next one is AS-19, version three, this amendment would ensure that were using consistent rates across the hospital that the reporting is based on some standard, in this case we're tying it to the current medicare rights, I'd ask your approval. >> Okay, any questions from committee? Though I see a motion by Senator Hise? >> Yes Chair. >> All right, Senator Davis, I'm sorry, was your question answered? So you had [CROSSTALK] I'm sorry, I'll wait, I'd be glad to. Trying to get you out of here on time. [BLANK_AUDIO] well, while we're doing that let me thank the general assembly sergeant-at-arms that are here today, Francis Pattison who's passing out, and to [UNKNOWN] for keeping all shut and keeping order here, thank you so much for that. Everybody had opportunity to review the amendment? Yes sis, Senator Mckissick. >> It's a little bit of clarification. Is this language only applying to those patients that are in hospitals that are medicaid beneficiaries or is this applying to the full body of patients served by a hospital but you're linking it back to current medicaid rates? I mean it's not clear to me from reading the amendment. >> Senator Hise? >> Thank you Mr. Chairman, just to clarify where we're at, this is predominantly to what is reported to state as charitable care, so this would be individuals who have no coverage coverage or covered at rates much less than what is in that process, and this is just really trying to standardize it in some way. We have, since from a clinical stand point, what hospitals has done in charitable care, they've done x number of surgeries, x number of x rays, those types of things. But there's no standardization on the value of that, and so what this does is it takes the medicare rates which almost covers all services, those six [INAUDIBLE] and says, if you've done three x-rays, here's the value of those based on what you'd have been reimbursed under medicare. Which is actually high for most cases, you'll find higher levels than if the service had been under medicaid. >> Quick follow up Mr. Chair. >> Follow up. Senator, medicaid and medicare are lower than your normal commercial rates that would be typically be reimbursed by a hospital, by a private medical insurance plan. So aren't you, by doing this not particularly giving a hospital complete credit for the commercial value if a person had private insurance?

>> Senator Hise? >> Lowers/g, potentially the amount of charity care they're providing rather than providing what I call the fair market rate potentially cuz medicaid, medicare are less. >> They are less than what is paid for private insurance, private insurance does make up that cost and profit for the hospitals, that is generally true, not always. But it would be more representative, for example my hospital represents 80% medicare medicaid patients, and if you're only looking 20% would have been a private pay anyway. So the vast majority of where the hospital provides those services, with cost settlement in the medicaid, and others, is that the medicare rate which was generally a higher rate than it cost the hospital to provide the service. But it does not place all this at the highest market rates, the hospital could ever receive from any payer. >> Last comment, I think I understand the whole purpose of this, I think it's appropriate for medicaid patients, I guess for a hospital that doesn't have the 80% medicaid, and they have 80% commercial, and only 20% medicaid is not a fair barometer of the level and magnitude of charity care they're providing. So perhaps you and Senator Wells can work with Cody and the hospital association to come up with something that might more equitably represent the magnitude of charity care because they're writing it off. >> Follow up. >> Yes sir, follow up. >> Just to respond to that, I think if you'll look at hospitals all across state you will not find one that had only 20% medicare and medicaid. That's what's coming in, you will find, every hospital in the state is that at least the majority level medicare medicaid in some factors you'll see them approach the 90% level for real/g hospital saw this coming in. >> Okay Thank you all right where are we know? >> [INAUDIBLE] >> Yes sir all right is that 19? >> Yes. >> Version three ASH19 everybody has got a copy of that it's been discussed questions has been answered. Senator Hartsel you have a question? >> It's really a follow up from what I asked a moment ago, cuz it dealt with the hospital authority how would this bill affect the UNC hospital system or would it? Because it has multiple locations, and I'm just curious what would change with regard to UNC hospital system which is supposedly the hospital of last resort in the state? >> Staff you have an answer on that? Or they would have to report individually on multiple locations would be my guest if they are going to define that. Staff >> No sir I don't know. >> Okay that's why you're a lawyer. We will look at this Senator Hartsel? >> [INAUDIBLE] Neil is at the cafeteria at UNCs hospitals long time ago but well. >> Did you get a tax refund on that? >> Not that I'm aware of. >> Yes sir thanks all right. We'll certainly look at both your questions before it gets to the floor. We will work with staff to bring clarity to that, and to this amendment. And we'll go ahead and move forward with the amendment. Did I hear a motion? >> Senator Hise. >> Senator Hise you did that's right. Motion to approve ASH-19 version 3 all those in favor say aye. >> Aye. >> Any opposed >> No. >> All right thank you. Before we move forward with the bill Senator Tart you had a question earlier and I did not respond to you. >> That's fine, thank you Mr. Chair. I guess the first thing and I apologize for coming into this a little bit late, I know Senator Well and I had a chance to talk a little bit, but I was interested by the comments saying what are we gonna use this information for? And somebody said, to understand how they're using their sales tax to refunds and I guess, depending on what they do, what are we gonna do with that information, are we looking to micro-manage their decisions on how they apply funds they have in the hospital? >> Well, it'd be like your wife is spending $300 and you wanna know where it went out of your check book We're giving 300 million in tax refunds. So we wanna know where they are spending those tax dollars, and again most of them are for capital, we know that, they are listed, they apply for it that way. They've requested this information over two or three year period,

to get this information which you know and I know is already available in the hospital system. How they strapulate it and what the cost is we don't know Codie/g says he doesn't know, but this will give us an idea of where the 300 million is being spent on a sales tax refund. And again on the other side and you and I have been on the other side of not impacting them with their sales tax refund, and hopefully this bill will take whatever bouncing act that goes on and budget cycles with this. If they define where they are spending it, it's absolute and it's critical then we know the information there's no reason to go after the 300 million number and reduce it or cap it further or whatever it is time. That's what my hope is of this. >> Follow up. >> Yes sir follow up. >> Do we have any concern or issues that we think we're inappropriately using those funds? >> I would not know that answer Senator Wells you and Senator Rucho, Senator Rucho brought forward the transparency act and this is kind of a follow up to that for the hospitals, but nobody is implying that they are misusing the funds. They just simply Senator Wells, Rucho and the general assembly would wish to know where they are being spent. >> One other follow up if I may? >> Yes follow up. >> I notice in the bill we are allocating funds to cover the cost for DHSS I assume. And then why would we not do the same for the hospitals? [BLANK_AUDIO] >> That's a great question. Senator Wells? >> Let's look at this a little broader broader context and have to address earlier issues with that. There have been conversations over the past years about taping the amount of refunds that we give non profits. I expect there's some that wanna leave that cup where it is, there're some that wanna eliminate it. And I'm pretty sure some that want to lower that cap. So that's seems to be an ongoing dialogue in this body. But while we are having that discussion, the fact is we don't know how the money is being spent. The 300 million is being returned, we don't know by hospital, by organisation or as a whole exactly how much charity care has being provided. So we're having a debate about capping our sales tax refund or not, or lowering a cap with no context. And that's what this is trying to provide a context to this is what is going on across the state. And if we going spend $300 million this is how we wanna spend it. This is a relatively [INAUDIBLE] compared to the 300 million, 150,000 for HHS is a relatively small amount by dealing with administration. And again I think a lot of that, a lot of the frustration of HHS has been around not getting the data in a way that they- >> Got a question. >> Could easily compile it and having to go back and forth to get what exactly they want. We've attempted to address that. So- >> I have to ask [INAUDIBLE] >> This is a matter of context not a matter of we think somebody might be doing something inappropriate. >> Thank you Senator Wells. Senator Tarte. >> Thank you Mr. Chair, I wasn't gonna go down this path but you raised it Andy by stating understanding they're spending the sales tax, I know how that what they're doing for charity care. I think it's important for the committee and the members to know there's no correlation between the two. There is no requirement for a 501C3 to enough for profit status and to do charity care. As I've said if your going to do that were gonna have to ask the girl scouts to give so many boxes of cookies away. We're gonna have to ask for why to give so many free memberships. One does not have any correlation to the other. if we wanna correlate them then we gotta either change tax code give statute guidance what have you, but I think we have to be very careful going down that pathway of linking them. >> Folks we got time here we want discuss it fully Senator Hise. >> Thank you Mr Chairman just wanted to say I find it interesting to point that there is no link yet, I always hear this the justification every year as to why we should leave those caps coming out where they currently are. Because of all the great work and charity that is done through the hospitals, and how we're placing that at risk every time we move those caps. So it is interesting to hear that there is no link between the two that's coming in. But I suspect the hospitals would take a very different opinion on that matter. >> Okay thank you Senator Wade. >> Thank you Mr Chairman Senator Wells my understanding of part of this is in my district and certainly I have citizens have asked me about the sales tax, the being return to the hospitals, and the hospital bill being so much and we see all this construction. And they ask me to justify. I thought this bill was more for just transparency so that citizens also have a chance to know how the hospital is working in their

community to make healthcare more accessible is that not part of this? >> That's the heart of it. >> Mr Chair. >> Go ahead. >> That's the heart of this bill. This is not something to be buried in nature it's bureaucracy we want this out publicly we want any citizen to know exactly what's happening here. And that's what we're trying to accomplish. >> Follow up Mr Chair. >> Follow up. >> I just like to move for approval. > Okay. >> Okay. >> We have a motion on the floor to offer favorable report to the bills amended and enrolled into a PCS and referred to appropriations base budget . e are here for a vote. All those in favor moving the bill forward say aye. >> Aye. >> Those opposed. >> No. >> Okay the ayes have it the bills moves thank you Senator Wells. All right folks we are 22 and we have not so much of a controversial subject, but something there is and it's kinda gotten that way. But I'm go ahead and try to discuss the cratem/g bill for discussion only. And then we will put it on the next committee meeting keep that in mind for I have to cut the debate off because senate bill 838 and senate bill 841 need to move today. Okay so come forward Senator Mcinnis discussion only. >> Thank you Mr Chair members of the committee. Senate bill 830 add cratem/g to the control substance list I learned about this from a news article back late last year did a lot of research on it. It is a so called herb but it appears to be very addictive based on the information that I receive from the state medical examiners office. 23 bodies to say had on a slab over there have tested positive for [UNKNOWN] or cratem/g we don't know where it's produced, how it's produced what chemical additives are added. It's sold in beautiful bright packages with sexy names. With no limit to quality, quantity or age. Easily available to children sold on the street, convenient stores over the Internet. It's time to put the breaks in this product before the next epidermic starts. And I would appreciate your consideration at the approproate time and for the meeting. I'm glad to answer any questions. >> Okay folks Senator Stein question about this? Senator Wade? >> Thank you Mr Chairman my understanding is it acts something like morphine and this is not regulated that people do get highly addicted to it, is that correct? I believe what I read was they use it in Asia for workers that they want to continue to work even maybe after they are having a lot of pain. They chew on the leaves I think that is what I read about it. Is that true with what they are using now? >> Mr Chair. >> Senator Mcinnis. >> According to the National Institute on Drug Abuse it says like other opiod drugs kratom might cause dependency feeling physical draw symptoms, when not taking the drug and some users have reported becoming addicted to it. The drug enforcement administration quotes there is no legitimate medical use for kratom in the United States and the health risk has been identified that it is a botanical substance that could pose a risk to public health and have potential for further abuse. So your are exactly right Senator Wade. Senator Wade go ahead follow up. >> The [INAUDIBLE] we'll just discuss in another bill for an antagonist does this work on this drug, or do you know it might be too technical for you but I just wonder? >> Senator Wade you're above my pay grade. >> Okay we don't know that. Senator Wade this is another we had bath sores we've had to change chemical formulas almost every session. This things are packaged, sold and hedge/g shops mini marts around. I do believe Florida and Georgia have put an age limit on it is that correct Senator Mcinnis? >> Florida the vote failed Georgia the bill was removed Louisiana changed it to remove the kratom ban. Michigan didn't pass it in 14 and Oklahoma didn't pass it in 14 but it is banned in Alabama, Arkansas, Indiana, Tennessee, Vermont and Wisconsin. And Alabama as just last was week before last again not approved by the the FDA. >> Okay thank you we got a number of questions let me keep moving here Senator Davis. >> Thank you Mr Chairman my understanding of this drug I would like to Senator Wade [INAUDIBLE] opioid receptors and that's where [INAUDIBLE] works, and so my guess is without knowing the pharmacology that

it's probably does is effective for that but I don't know that. It is a drug of abuse, I had never heard of this stuff before of this bill, and so I did some research on it and found that it has no therapeutic value. It stimulates the opioid receptors and it has similar addictive and withdrawal symptoms to opioid. And so I appreciate your bringing this forward. >> Very well thank you senator. We have received a number of emails from a number of people around the state at least. The chairs I have that say that it's helped them greatly and that they've got enough opioids and heroine and made a lot of positive comments. We received a number of emails from around the state. Senator Raven. >> Thank you Mr Chair. The information I have collaterally says that do you have a handle of how many of the tests had other kinds of substance abuse associated at same time during the autopsy. The information they have says that it was this but we're not sure where which. >> Yes sir third question Senator Mcinnis. >> Mr Chair says that poisoning with the kratom there are 14 out of the 23 that the North Carolina medical examiners office chief toxicologist has give us information. 14 head plus or minus other drugs including heroin and some names I can't pronounce, along with [UNKNOWN] I'm not going to [INAUDIBLE AUDIO] some of those look like they might not even be in the dictionary but yes you are correct sir. Okay all right Senator Lowe. >> Yes sir thank you, I was reading a little bit about this and what was kinda fascinating when I read it was when it talked about some of the effects and no pun/g intended but you receive the same effects if you drink Jack Daniels. So to move this drug I guess or herb as some would call it I've heard, I got a lot of people calling me and writing me about it and say it helps them with pain. Those who deal with chronic pain and chronic headaches. And it's been considered an herb when you it uses a tea. You have marijuana you're absolutely right. So I don't I don't know I'm really [INAUDIBLE]. >> That was quite a pun talking about Jack Daniels coming from a preacher but go ahead Tom. >> Mr Chair I hear exactly what you're saying Senator Lowe if you remember when cocaine was first distributed on an international basis it was through the product of Coca Cola. Until they found that, that it would kill you and it was highly addictive. Opium of course isn't a natural substance it comes from the opium [INAUDIBLE], but of course we all know what will happen if you use that and I believe this is potential the next greatest epidermic. Just like those two others that I mentioned I too have heard from several people but it appears they are the ones using it. The ones selling it, the ones selling are really for it. They really like what is going on. >> Thank you Senator Mcinnis one more question here well. Three more questions we got get this other two bills go ahead Senator Mcinnis if you'll be brief sir which I know is somewhat difficult. >> Well I guess my greatest concern here I hear DEA doesn't have any regulations. The FDA has no regulations and many of the states that are considered restricting this and putting on a list of controlled substances have stepped away from doing it. So I'm trying to understand why here in North Carolina we should move forward with it aggressively I don't have a problem studying it. But I would not wanna move forward aggressively without a lot of thought and consideration to the real data, because our reports would have been kept with me were done in Florida suggested that it is not present a health risk that you've articulated. And that it ha s great value for medicinal purposes. In fact I have met with two people earlier today one being this Miss Elizabeth Gardener and the other gentleman who is a teacher who basically benefits from it's substantially I don't know we have a chance to hear from them in terms of receiving public comment. So I would not wanna move forward aggressively with this I think it needs to be studied, and we need to get real analysis done because they are far more states and committees even Bower/g county down in Florida that move forward with any [INAUDIBLE].

>> Thank you Senator Mcinnis [CROSSTALK] >> I'm sorry sir what was your last comment? >> What was said about Coke Cola is a myth. [LAUGH] >> Okay all right Senator Van Duyn I was wondering if the state house director Doctor Williams is it has expressed an opinion. I'd really like to hear from this opiod is [INAUDIBLE] to me. >> Okay it's discussion only but we are not gonna have time to hear from the North Carolina crime lab, the district attorney, or the medical examiners office, today discussion only we'll bring the bill backup, we'll line it up, we're a lot of time. We will do what we need to do to get you comfortable and comfortable and going forward. And get you data and information you need. >> That's all I ask. >> Yes mum, thank you. Any other questions, Senator Lowe >> Yes, thank you. I had one last question. What demographic uses this drug, where is it used? >> Senator Mcinnnis. >> My understanding, I don't have this in any kind of a form of a document. But my understanding is it's sold on the street. It's sold over the Internet and is sold in hedge/g shops and in the more traditional mom-and-pop convenient stores. [CROSSTALK] >> Senator Mcinnis perhaps I can shed some light on this Mr. Lowe. >> Senator Lowe. >> This is in my county, this is on side of the street. I have omitted the phone numbers got pain try kratom. kratom. And the back here, imperialkratom.com. This is stuck on the side of a stop sign in my county. Phone number admitted being sold by a part real estate property manager, addicted try kratom. And on the back of the sign here, kratom 25% off. So this is what's on the side off the of the road in my county, and I just happen to pick up this two signs. And if that person wants some [INAUDIBLE] I admitted there phone number, they can put it back on there but this is how it happens. So people are selling it, no age limit no nothing. And so that's what going on in my county with this in a beautiful package. And made in a lab in South East Asia. >> Senator Tarte. >> Yeah quick question and a clarification in by this bill all we'll be doing is requiring somebody with the DEA number to write a prescription to get it, is that all? No we are burning it in the states to my understanding is that correct senator McInnis. >> Mr. Chair we are adding it to our current list of controlled substances which of course make it where it is a potential felony if you caught with it. >> That's right okay can we end senator Robinson I want to includes but we got two more bills that we need to move through yes ma'am. >> Just a couple of things Mr. Chair, one is when you hear from the health director I was wondering had we talked to the medical society or anybody in North Carolina who is actually doing the research because my concern would be adding it based on extraneous information. And we can pull it from anywhere but not having real data is what we need, because we are making it a felony then that means incarceration. It means all kinds of other issues that lead to, peoples lives. As well as money. >> Yes Mum we wanna here from the crime lab we wanna here from the DA's and the medical exam is gonna share with us about the nine is that correct nine related deaths. 23 related deaths that people had create them in their system as to senator. Point with other drugs as well. So we have hundreds of chemical formulas already in starches that are trying to burn bar salt and all this other things that are their. But their had been people have written and said they had therapeutic value taking these drugs on. I don't know I'm not qualified to answer that senator Robinson but we will as we promised senator Van Duyn get data and information to get you comfortable in your knowledge about whether vote for or against such a bill. Okay >> Mr. Chair >> Yes who's their >> Senator Davis just a point of inquiry. Interested in the data as well. But if we are talking about putting this on a calendar next week and we are gonna get the all this and take a vote. We are gonna do the very best we can. If you have the data and have an opportunity to review it would probably will hear from everybody and his much will do the best we can.

We dint have this much discussion. question about south east Asia derived drugs when we talked about [INAUDIBLE] and all this chemicals folks that have said it has values. Some people say they are already addicted they take this instead of we will try to get that information to you prior to bring it to a vote. But yeah it may be on next week as far as we can do it. but if it needs to be delayed we can do it just so you're comfortable with it okay. We don't wanna rush through this if it's gonna impact somebody's life. Somewhere we got figure what we are gonna do okay. Thank you sir but it's good point in all three senators have raised that. All right I thank you Senator >> Thank you Mr Chair. >> No we are not hearing from the public today. This is discussion only sure next time. Senate bill 838 medicaid transformation reporting. >> Thank you Mr Chairman and I realize that hopefully in session we'll get the short rows but that's for coming in but I got some things that have to move forward. The first one the medicaid transformation modifications. These are actually essential to be done prior to the June first deadline to submit the waivers. So that the way we're submitting is not inconsistent with the state law this would Thanks for coming in quickly I- >> Senator Heiss me make a motion to have someone approve the debate we can bring a motion to bring it before us this bill. Senator Raven is all those in favor. >> Aye. >> Thank you now Senator Heiss. >> Thank you very much section one puts a new report in by October 1st 2016 to come to us to have the department basically tell us how this is going with CMS. What there initial reactions are and what the responses we've got and any potential needs of changes and legislation as a result. Thanks for coming in section two is to clarify that DHHS the agency over medicaid and that we taken out some requirement of saying DMB through DHHS and it specifically made those references always DHHS so that's clear with CMS that we are not changing a single sate agency or other operations in that process. Just some conversations we've had back and forth it was necessary to clarify that type of regulation. The substitute changes, the largest ones are the services that will continue to now be covered under free for service, as we were coming in these were assigned to some court populations that come in that you really can't forecast over a year and put a poor member per month kind of cost to those qualified aliens and documented aliens who qualify for emergency services, we're still gonna pay those on feed for service, I would hate to kind of guess how many of those come in a month and allocate those funds on a monthly basis basis to any of the entities, medically needy, members of the federal will recognize tribe that's watch for the status, their services are already 100 percent paid for by medicate dollars and this is consistent by a lot of policies we've had in relation to the tribe and for some eligibility recipient so someone who comes into a hospital and presume their eligibility, they receive services for that time period, again that just doesn't fit with knowing how many of those would come into the hospital and allocating a poor member per month, payment for that changes from 10 to 12, the number of people up to 12, it was up to 10, the department could approve of those kind of things, it's something we would be watching very closely to make sure we don't create populations that are too small in regions but we think the department can keep all that kind of worked out, I think that covers everything that's that's the substitute side of it, the cooling off period there's some clarifications in here, we don't see them as significant changes that were coming in just to identify what it means to administer a contract and what a former of the department knows type of things that's considered think consistent with their intent as we rework these it was just they were questions. >> Senator Wake. >> I would approval at the appropriate time. >> Okay thank you mum. Question Senator Hudson. >> I would like to speak with senator Heiss afterward I wanna find out what a PLE actually is. Okay so senator McKissick. Senator let me ask you this I'm looking on page 6 of the bill under subsection B4 and it talks about. The contracting provisions here and review approval of being except from state requirement. The only thing that gives me reservations. Are this big consulting contracts that we've seen used within the

medicaid area. What are we doing that would make certain that their is some level of scrutiny and review. See we are not talking about six million dollars contract. Rates that are exorbitant compared to normal contract figures for co-probable work. Because their is only one provider, I mean their all of these one provider soul source one provider, soul source type contract that has been historically used in this area. Now what do we have here. Safety net to make sure that this kind of language does not open us up to abuses. I think it's important to note that we are opening the flexibility of the department to move contract services as they've come out from under the state. Plan for employees and others that we have increased flexibility for the department to do that we have however said basically that the secretary will establish the procedure for review and benefits and all the process will go to go over those and have the ability to review those others are coming through I think it's a question of once we get those. We'll have the ability to decide if there is efficient and both have that contract with the sectarian others I think where you are at right now is we've said that the process is slow, it's exceptionally slow and it's unacceptably slow for medicaid and for the new division we are creating so we have internal left that up the secretary to define Define other procedures for approving those contracts and as we do with everything here Senator McKissick we will review those when they come back through. >> Quick comment I do have some concern about that particular provision [INAUDIBLE] upon the history of contracts to be executed and we are all aware. >> So noted Particularly Senator Tucker and myself I mean we both had some heart burn about this issues. >> Yes sir and just if I may Senator McKissick the secretary and staff in the health benefits authority fully understands our scrutiny that will be on this contracts and I don't expect they wanna chased as by you or me If they were two hire a CEO of a corporation to work for 300,000 for eight months or six million dollar no bid contract [INAUDIBLE] they are fully aware of that sir. >> We'll guess have to tag team them. >> Yes sir we can do that we can do that all like notion. Truly Wade made the motion she had another meeting there is a motion on before for passage of Senate Bill 838 out of committee medicate transformation all those in favor say aye., >> Aye. >> All those opposed, alright the bill passes, okay yeah and let me see. Is unfavorable to Senate Bill 838 is unfavorable to the original bill favorable to the piece of yes and everybody said I didn't they yes okay thank you. Senator Heiss, Senate Bill 841 Anyone, and I don't think it is PCS. This was the recommendation and we've actually [UNKNOWN] spot from the county commissioner association services. All in this bill has to do with the timeliness of medicaid eligibility determination. We're all aware that they have been problems with that most state wide and locally. This was coming in, this requires for all the DSS to report their eligibility requirements and how long it is taking for those applications, whether that meets for standards. If consistently we are not meeting those requirements, and quite frankly we have to meet for federal requirements so we don't get the whole payment suspended that they will develop a work plan with the department for approval, we'll go through that process and could ultimately reach a state where the state would take over for a particular county but we hope we got enough safe guards in that we never get there and that's the agreement we've come to with all the parties involved and it was the recommendation of DHHS oversight. >> All right Senator raven moves for a favorable report on senate bill 841 with referral to appropriations base budget. All right all those in favor say aye. >> Aye. >> Opposed the ayes have it thank you. Before we move Senator Davis. >> Mr Chair I just want to bring up something once again. Going back to senate 830 I know you gave your word I just want to make sure link the agenda the next meeting if at all possible we can allow maybe residence who maybe travelling across the state an opportunity >> I was gonna mention the fact those members of

the public that want to come and speak for or against cratem/g I apologize that our time ran short and you made a trip to Raleigh/g but you're welcome to call my office and if you wanna lave your name on I'll notify you when the bill is coming forward ad give you ample opportunity to speak thank you.