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Joint | February 11, 2015 | Committee Room | Appropriations, Health and Human Services

Full MP3 Audio File

Thank you, members of the committee, members of the public. Welcome to our second educational meeting of the Appropriations on Health and Human Services Joint Committee meeting. We'll start this morning by introducing our Sergeant at Arms. In the House we have Reggie Sills, Marvin Lee, Terry McCraw, and Ray Cook, and in the Senate, we have Charles Marsalis and Steve McKaig. Thank you all. We have two pages serving with us. Welcome to the Senate this morning. We have Lindon Noonan, that's great, representing Martin, and we have Regan Waits under Brigadier General Gary Pendleton. Thank you. Thank you. I hope you enjoy your week. We're going to begin this morning hearing from the Secretary and her priorities and others. If there's time available within the meeting, we will pick up from the agenda left over from yesterday. We have a presentation left to go with that, but that's dependent on our timeline and others. We want to make sure the Secretary has a full opportunity to lay out her vision today and hear from the committee. So with that being said, if there's nothing for the Chairs, I'll turn this over to Madame Secretary. Thank you for being here this morning. [SPEAKER CHANGES] Well, good morning, and thank you very much, Mr. Chairman and members of the committee, and welcome back, and it's a pleasure to be here and see all of you. The Department of Health and Human Services is committed to improving the health and the wellness of our citizens. The department must serve every citizen in our state. Of those who receive the services, and the taxpayers who actually fund the nearly $20 billion budget in our department. During the past two years, we have focused tremendous effort on addressing a number of fundamental opportunities to make the department a sustainable, efficient organization. From the beginning, we have strategically invested in creating a sustainable infrastructure that allows us to work more efficiently and more transparently now and into the future. At the same time, we have focused on our human capital at DHHS. We reorganized and realigned the department and many of its divisions to operate more efficiently and more transparently, including a nearly complete reorganization of the Division of Medical Assistance, and that being the first time in 40 years. With your assistance, we have reassigned existing positions in the department to significantly, and that is significantly, expand our internal audit staff, which really has enabled us to identify and implement operational improvements and gain efficiencies. In addition, we have moved forward with developing and implementing our IT solutions that are required to serve our citizens and operate efficiently. And you are truly seeing the results. By making these strategic investments, by putting in the right leadership, the right workforce, and IT systems in place, we have already a more efficient department and are meeting the needs of our citizens. Our efforts in strategic investments have resulted in better financial management and budget predictability. Thanks to the humongous of the department, of the Governor, of Office of State Budget, and efforts in the General Assembly, last year the Medicaid budget finished that year in the best shape it has been in over five years. After being almost $2 billion over budget

the previous four years before that. We succeeded in creating and implementing tools that enable us to better track and forecast our Medicaid expenditures. These tools have improved Medicaid operations and transparency, making it easier for the department to work collaboratively and productively, both with the General Assembly, Research, OSBM, and other stakeholders to make informed critical decisions for our state. This collaborative effort, at this point, is almost on a daily basis for us. We must continue on this path by making continuing strategic investments. After two years of making improvements in the Division of Medical Assistance, 2015 is the year for true reform for our Medicaid program and reforming into one that is provider driven and patient-centric. We must empower our healthcare professionals to use their training, to use their experiences, to use their professional knowledge, to provide the care and achieve measurable improvements in patient health and in outcomes. We must set the goals, not only to be, when we set the goals, we cannot be over-prescriptive in defining how our providers operate. Medicaid reform is a strategic investment for the future that will provide a return for the money invested in this program and it is truly achievable. We must work together to develop a Medicaid budget, one that includes strengthening our risk reserve so that it is more comparable to the reserve maintained by other insurance companies, including the state health plan. We must continue to enhance our IT infrastructure so that that in our line of work, which deals with human lives, we can serve those in need with the most efficient use of taxpayer dollars. Our certification on-site review by the federal government of our NCTrack system, our multi-payer billing system, was just held and it was a very positive visit. Our CMS reviewers, our federal partners, were very complimentary of our preparations and our ability to demonstrate the functionality of our NCTrack system. I am very proud that we are the first state in the nation to successfully implement a multi-payer system and the first in the nation to be reviewed by CMS, our federal partners, applying its new survey tools. But most of all, I'm very proud of the dedication and the hard work of the employees at DHHS. We anticipate learning the outcome of our certification review in approximately two months as a timeline and a successful certification for the state of North Carolina has quite substantial financial benefits for the state. Continuing to make strategic investments in our IT infrastructure is really critical to improving the health and well-being of our citizens. The greater detail available through the new technology also reduces the waste and the abuse in the system because it does bring greater transparency to our programs. As you know, NCFast system, that is used by our county departments of social service at that level, was initiated originally in 2008 and replaced 19 Legacy System, IT systems. It facilitates counties making eligibility determination for all our benefit programs and it also improves consistency. These eligibility determinations may

Speaker changes: using our NC fast systems must sent ultimately to our NC track system in order ?? very important piece of ?? NC fast project this is our child protection case management system ?? county to county communication of information hour children bout ?? did not occur is really effective ?? north Carolina for sharing such information the next phase for our NC fast ? to help p keep our children safe and after implementing the child case management systems ?? we look forward to provide ?? for duty protective service bit it is also need to keep ?? implement each phase of NC is schedule another priority is including mental ?? because it is the most important health important issue we gonna face in the next decade just few week go call from our hospital this Saturday morning in forming me ?? one of our hospital was go on diversion learning to our Patience to other hospital because type had sixty over patients in their emergency require ?? and substance service diversion ?? requiring protection the heart attack ?? if hospital on diversion the have have to go ?? is physician ?? in the emergency room i can tell you this is not any of us it is dangerous for those ?? we must continue to address she behavior of that help by providing rising ?? which is focus community level ?? and we must continue to make these investment to these investment ?? that general assembly ?? last yer however strengthening mental health system is no one yer fix we must continue improve it care develop multiple resolution the department intercepts at this about ??

The Department’s Vital Records section records each individual’s birth and each individual’s death, and in some cases, the medical examiner system may intersect here because it actually determines the cause of death, and we have identified opportunities to make both of these sustainable and efficient. There has been a lot of tremendous collaboration identifying solutions to improve the medical examiner system, an area that has long been neglected. With your assistance, we increased the salary range for our forensic pathologists, and we successfully recruited several doctors to work in our office of Chief Medical Examiner, and now it’s time again for some sweeping reforms to ensure that we have a strong, sustainable medical examiner system that North Carolina really deserves. However, as in any case, the strengthening of our mental health system, the strategies identified for improving our medical examiner, really require a long-term plan. Vital Records is another significant longstanding need for our state, and I firmly believe that the function of the office of our Vital Records is really the fundamental responsibility of our government, and we need to implement – we really do need to implement – an electronic death records system in order to simplify and improve the process and timeliness of collecting, of registering of death certificates for North Carolina residents and improve the timeliness of notifying the state and our federal partners about deaths in order to prevent the benefit payments to the deceased individuals and to decrease the fraud that happens, at the same time to improve our analysis and response, which is critical to the potential healthcare risks and outcomes in our state. In fact, North Carolina’s only one of six states at this point without an electronic death records system. We have created a plan for making this critical investment and we appreciate your support in this matter. Together we are responding to the most critical challenges that we face as a society – ones that impact the health and the wellbeing of our citizens. We have and we must continue to make strategic investments in our infrastructure and in our human capital. Thanks to the progress that we’ve made over the past two years, the next two years will present great opportunities for the Department, and I look forward to working with you in that direction. Thank you, Mr. Chairman. [SPEAKER CHANGES] Thank you, Madam Secretary. I appreciate it. We’re going to begin with any questions you may have for the Secretary. Senator McKissick. [SPEAKER CHANGES] Thank you, Madam Secretary, for that overview. I was just curious; had a few questions. In the Division of Medical Assistance, Medicaid, are you completely fully staffed at this time or do you still have vacancies? And I was particularly concerned about those positions where we need people with strong financial analyst-type skills or actuaries because I know that’s critical to that division in terms of its ability to create accurate, reliable projections, so where do we stand? I know that you had filled three or four of them a while back, but that would not have been full staffing, as I recall. [SPEAKER CHANGES] Senator, thank you for that question. We are not 100% in any part of Department of Health and Human Services filled with our vacancies, but we’re very far along. One, and I will take this opportunity to ask for referrals to HR, in the field of compliance. At a very senior position in compliance, there is still an opening. We are interviewing at this point and I request and share that information. So on the senior leadership, that is the one that we have not yet filled. [SPEAKER CHANGES] Follow-up, Mr. Chair. [SPEAKER CHANGES] Follow-up. [SPEAKER CHANGES] I know when the Governor provided his State of the State message, he talked about coming up with plans

And to cover the uninsured. It didn't use the term Medicaid per se, but I did not know if your agency is looking at any models or looking at any type of waivers in particular that would help accomplish that objective. [SPEAKER CHANGES] Senator, thank you for that question. Yes, we are, we have been and we are continuing the dialogue of evaluating all options that could possibly be to the benefit for North Carolina and its citizens and we are working in that direction. The Governor has met with the President directly on that and we have ongoing meetings and dialogue in that direction. We are trying to find solutions for North Carolina that the Federal Government would be able to agree with that would be beneficial for our state. Every state is unique. Every state has their challenges and we will be bringing forward to the General Assembly once we're able to at least have some understanding with the Federal Government that we're discussing the same direction. [SPEAKER CHANGES] One last follow up if I could. And I guess it'll be a compound question. Do you have any idea at first when that timeframe might be that we might see something and then secondly on an unrelated issue, I know that you recently mentioned that there was a lot of applications that came in because of problems with TurboTax and your agency had intervened and basically prevented folks, a problem that was basically gonna overload systems across the United States, but does it look like the additional applications that came in that may need to be reviewed notwithstanding the fact that they may be incomplete or may not be eligible candidates, is that gonna require a substantial amount of resources to comply with that, that will create problems for us in terms of issues we've faced in the past with food stamps or education. [SPEAKER CHANGES] Yes, Senator, thank you for that question. The issue with TurboTax is obviously the state, and not just North Carolina, took all the states by surprise and we were able to mitigate and stop some of the applications coming in for all of them at a certain period of time, they are now coming back to us in a different form. Based on, for those who may not know, on TurboTax as you were filing your taxes, at the end there was an opportunity to say you may qualify for additional state resources in reference to food and nutritional service and if you press the button yes then an application was populated with some of the information from your tax returns onto an application. That application was automatically faxed over to the county Department of Social Service. One morning all the sudden the county Departments of Social Service walked in to find on their fax machines collectively thousands of applications that were neither complete nor some of them readable with the incomplete, inaccurate information, so that created enormous challenges as we tried to figure out where this came from and what was unfolding. We realized that TurboTax some of the states acted very quickly legally. We were collectively with everyone we could to try to engage our corporate partner TurboTax. They did cease that activity and now are filtering in through Epass, our electronic system of entry in benefits. We stop released through USDA, our federal partners, that these applications, neither complete nor, what do we do with them. We were informed that we have to treat the as proper applications by USDA even if one that we can't even read what's on the fax. That is dangerous because that queue for us, we still have a backlog that we're piling through on our present Medicaid applications

and this increases the number in our backlog. And we are having meetings on a daily basis with the counties, with the state, and our federal partners on this. [SPEAKER CHANGES] Does it look like there's gonna be a substantial reallocation of resources, financial resources, as well as personnel to deal with this, or is it. Okay. Well, that's good. The first part of that compound question was trying to get to time frame might be for a waiver coming to us? [SPEAKER CHANGES] Sir, perhaps I'll answer it a little bit differently. The federal government right now is waiting for resolution in the Supreme Court, and that decision will impact any direction whatsoever. That decision is expected June-ish, so until then there really will be nothing brought forth. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] Chairman Avila. [SPEAKER CHANGES] Thank you, Mr. Chairman. In your presentation you mentioned that one of the next big segments that you're going to go into is the child protection case management. Can you explain to me what your path is in getting there, in terms of what you're looking at, how you plan to develop it, and any kind of, sort of, not written-in-stone timeline that we're looking at? [SPEAKER CHANGES] Okay. I think our path in general on NC Fast will be, even originally in 2008 when it was proposed, the timeline that was setup was pretty accurate. That from that time it was expected to have every, that entire system by the end of 2017, and we're pretty close, even where we are now, with knowing you we would have the ACA in 2008. Even with that we're pretty close. That by 2018, and towards the beginning of, middle of 2018, so just a few months off that original time frame. So the entire project, and that included the Adult Protective Services, which is still out there. So that whole system, where we will have transparency of information, of every eligibility and every service through the state, for the counties and the state. 'Cause the issue is, the citizen has to be able to communicate with their county. The county has to be able to communicate with the state, and the state with the federal government. What we need to insure that the counties can communicate with themselves also, because in Child Protective Services what you can see is how you make your decisions if you need it in a timely manner. And so putting the Case Management System inside of NC Fast will allow the case worker to see far more information, far more information than if it is done separately. So that's why we feel it is imperative that it is done inside of NC Fast, and that was the original vision still from 2008. That has not changed. Now, with what we know, we know that that is far even more beneficial than even ever envisioned because of what we can see in reference to protecting the children. We are actively working in committees with our stakeholders to create this solution, but this is the next one that we are hoping. Do we have a timeline exactly for that? [SPEAKER CHANGES] 24. [SPEAKER CHANGES] On? [SPEAKER CHANGES] Child Services. [SPEAKER CHANGES] So the implementation of it will, according to our timeline, on the whiteboard, and according to our original timeline, on 10/1/15 it will start, and by 9/17 for the entire project for the entire state as far as our timeline. [SPEAKER CHANGES] Follow up? If you wouldn't mind, expound a little bit on the development in terms of, is this going to be in-house like a lot of our computer work connected with NC Tracks and NC Fast has been, or are we going to look out into the sphere of the computer world and find out where someone may have been working, maybe move the system along faster, but still have it communicate in that county-to-county, county-to-state, and so forth hierarchy that you referenced? [SPEAKER CHANGES] And that is all being presently evaluated, Representative Avila, and there is, on our end there is a collaborative group that's working through that right now. And we will be happy to get back to you with the details of that. [SPEAKER CHANGES] Representative Farmer-Butterfield. [SPEAKER CHANGES] Thank you, Mr. Chair. I have a series of questions

And I wanted to thank the Secretary for such a succinct and to-the-point report. I really appreciate that. It’s very clear. The first question I have is about the Medicaid. You indicated that it had been over-budgeted by two billion dollars over the years and now you have a handle on that. Could you clarify how you got a handle on it? [SPEAKER CHANGES] Basically in the Department it’s about efficiencies, and how do you create a process and a workflow in order to derive the efficiencies from the organizational part of it? How do you work smarter? And if you’re working smarter – smarter and quicker, you’re able really to take out some of the efficiencies, some of the process, so a lot of that is number one, correct budgeting… tighter forecasting, tighter analysis… as I refer to it as, paying attention to everything that you can pay attention to, and that’s how the original efficiencies were really driven, and that’s the path that we are on. [SPEAKER CHANGES] Follow-up. How are you feeling about the issue of Medicaid expansion? [SPEAKER CHANGES] How do I feel about it? As I’ve mentioned, it is something that we’re evaluating and we are working on. For North Carolina, we have a substantial amount of citizens who do not have health insurance, and citizens who do not have health insurance do not stop using the healthcare system. They continue to use the health system, so how do you provide health insurance for the uninsured and yet not put that burden directly on the taxpayer and yet allow the citizens to have an opportunity to engage in that concept? So we are working through how would we structure a model that allows that – that allows a citizen to take part in health insurance and have some responsibility towards that, and yet how do we create a system that does not put the ultimate burden on the taxpayer? And that’s the business model that we are right now looking into and discussing with the federal government, as are other states in this process. [SPEAKER CHANGES] Next question. You talked about case management, which I think is very critical for children and adults in terms of protective services. What about case management as it relates to people with mental illness, intellectual development disabilities…? Where are we on that? [SPEAKER CHANGES] Well some of it is tucked into LME MCOs, that line of work, and what we have done over the last two years in that arena is we have… we are on a path of driving into the system standardization and efficiencies, so what we’ve done is set the state on the path of decreasing the amount of LME MCOs for the purpose of driving in efficiencies and standardization, at the same time driving accountability and efficiencies – not only financial efficiencies, but also medical efficiencies and accountability towards the citizens that they serve, so the services are not overused, but at the same time they’re not underused. So we have that LME MCO system. We have an entire SWAT team that has been working on this that actually meets in my office. At this point we don’t meet every week. We used to meet every week; we work now with our reports every month, but we are driving those efficiencies and therefore creating the information back and forth as best as we can. Originally on our different LME MCO systems, unfortunately people were on different IT systems, and as we are consolidating we are gradually moving towards decreasing the amount of variable IT systems, individual IT systems, which makes it quite complicated for them and for us. So as we consolidate, that’s one of the issues that we’re driving – some form of less variability in the IT systems, which therefore is towards the case management. [SPEAKER CHANGES] Thank you. I’m concerned about people who don’t have healthcare and need it, and

Are getting sicker and sicker. I’m concerned about people who need case management to actually move forward in their lives and I hear about it every day. In following Bell Haven in the vital medical center, could you give some insight on that? We’ve gotten a detailed packet on that particular issue. Do you have any insight on that? [SPEAKER CHANGES] Representative, I will perhaps ask our director of, to come back to you ?? with exactly, the exact information. I do understand you received a quite extensive package just recently. [SPEAKER CHANGES] Chairman Tucker. [SPEAKER CHANGES] Thank you Mr. Chair, Madame Secretary. Thank you for being here this morning. I do want to give you kudos, and you and your department. I was aware of that situation on Saturday morning with that diversion at a major medical center here in the state and they tell me that you and the department reacted in a quick manner and they were able to alleviate the situation so I do want to say that great job there. Sometimes when the barn’s burning down, somebody’s got to come with water to put it out, and you did. And your department did. Along the lines with Bell Haven, ?? left that hospital, has anybody given any thought to maybe converting that into a mental health hospital, utilizing that structure, re-employing those people over there and utilizing those rooms and those beds? I know it’s zoned ?? but if someone could make that a profitable endeavor, if we need beds for mental health patients. If that hospital shut down we could redeploy those rooms and staff that’s there and perhaps do something there for Bell Haven, just a thought on my part. Just did not know. The other thing, back to Chairman Able, ask a question about the case management system which childcare and foster care is what we’re about. Is there a demo available that members of the committee could review from NC Fast that shows us the case management system? We’ve seen other ones that are working in other states and there is off-the-shelf product that maybe could make it happen quicker. I guess I’m a little bit reluctant to delve into a case management system with NC Fast in lieu of all the issues that we’ve had with that program. So, if there’s a demo available, if you could get someone from your department to schedule it, I’d love to see it. And then finally, on your statements about the fact that Medicare was this past budget cycle, was in surplus and was in the best shape it’s been in five years. Running a 20 billion dollar business and we’re almost in the fourth quarter of the football game here, can you tell me your over/under budget number today? [SPEAKER CHANGES] Thank you for that question, Senator. [LAUGHTER] To the best of my knowledge as of today, we are on target to be at budget. [SPEAKER CHANGES] Well, I’m still going ?? with the financial pressures we’re under now, I really, really do hope you do come in under budget. Mr. Chair, that’s all the questions I have. [SPEAKER CHANGES] Representative Insco. [SPEAKER CHANGES] Thank you Mr. Chairman and thank you Secretary, Madame Secretary, for your report. It was very helpful. I want to follow up, I have two issues I want to talk about and one is, does have to do with Medicaid expansion. But I’m interested in knowing whether the department has the ability to find out whether those 60 people who were in that hospital are insured or uninsured, and it’s been my interest a long time that we all know that we’ve had this issue with people ending up in emergency rooms with mental illness and not having a place to go. And also I’ve made the assumption, maybe correctly or incorrectly, that a lot of those people were uninsured, and providers, we can’t expect providers to provide ongoing care in the community to people who don’t have, can’t pay their bill. And so that’s one reason I’ve really been very interested in Medicaid expansion. And if we could document that that would be a place that we would save substantial amount of money and relieve our hospitals of overcrowding.

Through Medicaid expansion, at least they would get paid and our community based physicians then would get paid to to provide those services. [SPEAKER CHANGES] Representative thank you. I was just being handed the answer to that so we won't have to get back to you. 2/3 were insured of those patients and 1/3 were uninsured, that was the breakdown at that time. In reference to issues pertaining to behavior health, perhaps at the biggest level it is critical as we move forward in the state that we stay true to the needs and it has to be a long term vision and we all have to line to get to it. We are seeing not just North Carolina, the entire United States, we are seeing more patients and citizens that aren't patients yet, citizens requiring assistance with behavioral health/substance abuse issues. Because of the nature of that area it requires a variety of solutions. A variety of solutions because it's individual depending on how the situation unfolds. We should strive as a plan to provide services of prevention, treatment and sustainability in the communities wherever we can for many reasons. Many reasons. Community-based support systems and their multiple types don't have to be big and huge and massive and expensive. they can be the ones that focus on prevention and support, which sometimes are smaller, and we have been quite grateful for your ability to allow us financial resources last year to move forward with our crisis initiative solutions. Now what does that mean? Yesterday I spoke at a CIT conference, so that's where the police department and sheriffs and people who work in public safety and corrections officers with the field of the mental health and stakeholders, all in training. There were a couple hundred people in this training to teach each other how to react when you come on to a situation to de-escalate it so the person does not end up in the emergency room on involuntary commitment in the emergency room for several days, and so we are working in multiple arenas. We have actually been in discussions with Chief Justice Martin and with the Supreme Court justices in reference to possibly working on an initiative with them under the Governor's leadership, so multiple solutions that we have, but they have to be community based when we can. That does not exclude the fact that there is a true need for hospital beds and we cannot think that there's not a need. There is a need, we need our psychiatric hospitals and we also need an ability in the community to hospital beds. We need an ability to have more three way beds in the communities for psychiatric beds. That will alleviate a substantial amount of issues if we can accommodate more of that. [SPEAKER CHANGES] Just a follow up on that one issue. I have heard that we've actually lost three way beds. Is that actually the case or are they, I mean, I support expanding three way beds. I think that's been one of the things that we've done that actually made a difference and so I think we should continue expanding those, but I was concerned that I had heard that there was some pull back from that. [SPEAKER CHANGES] Representative Insko, I perhaps will have Dave Richard speak to you where we are in the state right now with that, but that was an example of where we need multiple solutions. We have this clever program and its not insignificant where we train students and a different program for adults on mental first aid, and at this point we have thousands of people already we've trained in the state. This is not insignificant because peer support to identify and support folks before it goes

To a crisis is really where we need to devote our efforts because that is truly impactful and it's quite heartwarming to see actually high school students engaged in this arena trying to learn how to help their colleagues. [SPEAKER CHANGES] Thank you and that's a, we're very supportive of that approach and I have one other issue and this is a, this is an inquiry more than a question or a comment, I'm very supportive of your efforts to expand communication for children across county lines through your IT system or however you do it. When I was a County Commissioner, we had trouble within the country getting division directors to share information between the Health Department and the Department of Social Services because of privacy issues, and so that was, I couldn't understand it then but I'm very glad to hear that you're actually sharing information across county lines and I don't know whether there's been an internal shift in privacy issues or whether that was something that was more unique to the area I worked in. [SPEAKER CHANGES] Representative Insko, I will actually have to actually inquire on what that problem was. I am not familiar. It has not been brought to my attention. [SPEAKER CHANGES] And then I just have one question for staff. I would like to get the Medicaid enrollment for the years 2008-2014. [SPEAKER CHANGES] We'll be able to find it. Could we find the 2014 numbers? On this I currently have and I'll recognize next Vice-Chairman Pendleton for a question then I have Senator Van Dyne then I have Representative [??] [SPEAKER CHANGES] Madame Secretary, two things. One of them, I have tried for some time to get a state psych hospital built on Dorthea Dix property over near the Healing Place, off to the side. It wouldn't interfere with the park. Maybe 40-50 beds to preserve the legacy of Dorthea Dix. Have, and I don't know, have you given any thought to a state hospital. We have 1 million people in this county. We have 150 psych beds. We ought to have 1,100 beds in Wake County. Have you given any thought to preserving that legacy? [SPEAKER CHANGES] Representative Wray, I think the issue of Dix campus at this time is being handled between the city of Raleigh and the Governor on the path that has been set. I firmly agree with you that the legacy of Dorthea Dix and her vision for the compassion and the commitment towards folks with behavioral disabilities does have to be preserved and there are many ways that can be accomplished, even with the simplest way of building a monument, a statue that we all acknowledge the efforts of and the compassion, the vision. I, in reference to the property of Dorthea Dix, sir, that is, that rests with the Governor's office and the city of Raleigh and the legal agreements that they have come to. [SPEAKER CHANGES] That is not a done deal yet, and we're probably only talking about 5-6 acres. Would you, before this is given away and the city of Raleigh buys it, which obviously I live in Raleigh and I'm in favor of it, but still 5-6, 8 acres is not gonna kill the park if it's off to the side where the Healing Place is now. I'm trying to get beds for Wake County. Would you pleas answer that question? [SPEAKER CHANGES] Representative, perhaps we could get back to you with the strategic needs for beds geographically in the state and what the vision and the proposals are and we'd love to meet with you about that on what the needs are for hospital beds in the state and where that need is and we'll make the appointment and meet with you on that. [SPEAKER CHANGES] Now my second question is. [SPEAKER CHANGES] Follow up. [SPEAKER CHANGES] With the, with what's going on with the medical examiner's office, which is atrocious, but I know you've done

and some things to try to fix this, but what concerns me is these contract hire pathologists or medical examiners that you’ve hired, your department has hired, that they’re not doing their jobs. We’ve got death certificates that are being written up as a suicide when they’re a murder. We’ve got murders that have been written up as suicides – cause of death. Have you terminated or have you quit paying these MEs, contract hire MEs, that don’t do an autopsy? [SPEAKER CHANGES] I will have Dr. Radish get back to you on the very specifics of contracts. [SPEAKER CHANGES] When do you think you could get back with those on that? [SPEAKER CHANGES] Follow-up. [SPEAKER CHANGES] Very quickly. From Dr. Radish, very quickly. Within a day or so she will call you, sir. In reference to the need for psychiatric hospital beds for the state of North Carolina, that she will also do very quickly. [SPEAKER CHANGES] Just a general reminder, all questions need to come through the Chair, so thank you. We’re coming up to Senator Van Duyn. [SPEAKER CHANGES] And I’d also like a copy of your report on the need for psych beds throughout the state, please. I have a question. I live in western North Carolina, so my constituents are actually closer to South Carolina, Tennessee and Virginia than they are to Raleigh. When you talk about your child protection case management system and sharing data between counties, is there any maybe long-term vision for sharing that data across state lines? [SPEAKER CHANGES] Senator, that would be lovely. I think we have to walk before we can run, but that would be the ultimate benefit. We truly sometimes lose information on children because it’s not transparent to us, and it’s not transparent to us who lives in the household sometimes because of different last names and of all sorts of things. It’s not transparent, and that’s one of the reasons why when it’s part of NC Fast, we’re able to see all sorts of things – how many adults live in the household with different last names… We’re able to see all sorts of things because of the NC Fast system and if we’re putting that into the child protective services. So there’s a lot of information that’s needed to make correct decisions, and the more we share it, the safer we are. [SPEAKER CHANGES] Representative Hunter. [SPEAKER CHANGES] Thank you, Mr. Chair. Good morning Secretary, and thank you for those updates. Being in the funeral profession, I’m glad to see North Carolina finally moving towards the electronic records. The timeliness is my concern. Funeral homes currently have five days to file a death certificate with the Health Department, but they’re having problems finding the right physician to sign these death certificates, or when we pick up the death certificates, the doctors had those death certificates filled out wrong, or they’re not filled out completely on the new death certificate. The new death certificate is entirely different from the last one. It is confusing for some physicians. How are you working with the physicians on the timeliness of filling out the certificates and how to fill them out correctly? [SPEAKER CHANGES] Representative, thank you for bringing that to my attention. I will have to get a little bit more information of how we can work a little closer if that is an ongoing challenge, so we would love to meet with you, Representative Hunter, with the folks from Vital Records, and I’ll be more than happy to be at that meeting to make sure that it’s targeted and on track. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] Senator Robinson. [SPEAKER CHANGES] Thank you, Mr. Chair, and thank you, Madam Secretary, for your report. Just a couple of thins there, and thank you that I haven’t gotten any complaints from my providers recently about the system, so thanks to your staff for responding to them in terms of the issues we’ve had, and we have a new DSS director and all of that in Guilford, so I think things are going a little bit smoother now. I met recently though, several of us, with the Triad Mental Health Association, and part of their concerns, you probably well know, is capacity to serve the numbers of people, and

this included Sam ?Hields?, as well as other providers around Forsyth etc. in terms of real capacity. The numbers of folks who are needing support maybe Beds maybe our patient etc., and not having that capacity. And then there were some people there who were advocating for themselves in terms of one lady whos husband committed suicide and could've received services early on so it was a real sensitive but informative session. So my question to you is, across the state, what are we looking at in terms of our deficit for mental health services both in terms of impatient beds, outpatient beds, that kind of thing do we have a comprehensive assessment of that? [SPEAKER CHANGES] Senator Robinson I actually would like the opportunity to meet with you or other members to show you our vision for the state for behavioral health, it is quite comprehensive but its not a one size fits all and i think that's the take home message. That we have to figure out multiple solutions because its not the right thing to put everybody into long term psychiatric hospital, its not the right thing to keep everyone at home, there are so many opportunities individually to get people to a safe and better place with support systems. So i would like the opportunity to present the different programs in our vision as it unfolds for not only for this year and not only for this coming budget year which is critical that is what were addressing today but to make sure were consistent as we move forward. Perhaps we can meet with you and show you what our strategic plan is. [SPEAKER CHANGES] Okay follow it Mr. ?? And I'm sure others in here would like to hear that as well too because mental health is, the other requests from them of course was if we could use the funds from Dorothea Dix to put in mental health. And a lot of people have made that kind of request in terms of, you're closing that hospital why cant we use that fund to augment services and there are community based agencies like the associations in those areas that do services as well. [SPEAKER CHANGES] Senator, thank you for that, we are counting on that, that the financial benefits of selling Dorothea Dix will be put into the mental health system. And hopefully used inside of our strategic plan for the state, so we are hoping for that. [SPEAKER CHANGE] One follow up Mr. ?, mostly to you, that at some point that when the secretary is ready to give us some lay out of that plan that we can have the time to hear from her about that please. [SPEAKER CHANGES] I think were prepared for those, I think were still, they're still in negotiation we don't know what the amount will be and i think we've seen today there may be some discussions about other things that are part of that, but i think i will say that i think its also important that we not take the lump sum we receive and put it into continuing services and have it evaporate in a short period of time, that's kind of coming in. Don't have anyone else for questions so I have two that I'm going to ask I fully understand that these are probably questions we're going to have to get back so that's okay but if you happen to have the information. The first one would be: The DOJ settlement, you have mentioned in your operations, do we know specifically where we are on the number of slots filled and how that is consistent with our agreement with the Feds and others and whether were on track to meet the 2000 mark by the deadline. [SPEAKER CHANGES] Yes, Senator thank you for that, I don't have the exact number with me, I will get back to you on the exact number. We're kind of on track, but this is a very serious issue for our state to be able to adhere to these requirements. And each year it's getting harder and harder we are working collaboratively of course with multiple agencies and our ?LMNCO's? but so far we are on target for this year. [SPEAKER CHANGES] The last question I have and we'll need every time we're coming into budget number. Coming in you talked about positions vacant and positions hailed, can you give us the number of positions vacant as well as the dollar amount that you've had open more than 6 months. [SPEAKER CHANGES] We can back to you very quickly on that, I just don't have that with me, but yes Sir. [SPEAKER CHANGES] ?Senator Wells? [SPEAKER CHANGES] Madam Secretary thank you for being here and for your presentation. I want to fill into an area that's in between some of what we've talked about. We know we got great concerns at the state level, about health care, and we have heard from specific hospitals

Different counties that they would like more state resources. This is a real complicated arena. It's easy to look at something simple like incentives and see that 58% of the state money going to incentives is poured into two counties but we don't have a number on how that's working in the healthcare range, but there's some indication that we're sucking resources out of smaller, poorer counties and into the urban counties. Some of that's just urbanization, we can't do anything about that. What we can do is make sure we're not making it worse. I come from a district that has a closed hospital, a vacant, vandalized hospital that will never be reopened in the west. The west has not been very good at screening. We need to address that in our own areas. Among all this data that you're looking at, among all the things you're doing, among all your reorganization are there any tools before us that might help direct or keep resources in the smaller, rural, poorer counties in the state? [SPEAKER CHANGES] I think it is critical, especially in the arena of behavioral health. In that arena it is critical that we maintain access as close as possible in the communities. In our rural communities it is an enormous challenge, enormous challenge to get services in the behavioral health world and that is why we are proposing to structure the support services and programs, sometimes even on a small level, but keep it local. It had the ability to do that. We have enormous challenges with our healthcare provider in the bigger picture in our rural counties. My always biggest fear is we do not lose sight of the need in our rural communities, that we do not lose sight of our rural health clinics, that we do not lose sight of our Federally qualified healthcare system that provides healthcare services for the uninsured, and sometimes when we speak we're speaking at the bigger picture and forgetting that in our rural communities they have different challenges and our decisions for the bigger good may endanger them and we need to make sure number one, do not cause harm. Number one as how we make our decisions and that is one of the reasons why it's critical that we also concentrate on the resources, so those resources, we have to face forward. We have to train more healthcare providers. We have to do that and we have to train, allow healthcare providers to work at the top of their professional license. Two different thoughts, because if we do that we can try to ensure that our smaller communities and our rural communities have an ability of access to care, so for the western region and the eastern region they have very different challenges than the middle of the state. We are very well aware of that and as you know have aggressively and vocally voiced our opinion and our concerns when it comes to certain decisions so that we do not cause harm. [SPEAKER CHANGES] Members, we have about 20 minutes left. Susan's presentation's expected to be about 15 so whether we get to it I'll leave up to the committee members as kinda their going forward, but Senator McKissick, a question. [SPEAKER CHANGES] Just one real quick. Madam Secretary, back in November there was an issue brought to my attention by some of the hospitals, particularly the smaller ones, where they were concerned about the reduced rate of reimbursement for those they were taking in on mental health issues. You know, if they stayed in the hospital and they got a bed, you know, that was fine, but otherwise the level of reimbursement was going to be dramatically reduced. Has that issue been addressed or resolved or do you know where it stands at this time? [SPEAKER CHANGES] Very specifically, Senator, I will have to get back to you, but the problem for the healthcare community is the reimbursement rates are continuing to decrease. As we know, the primary care physicians in North Carolina as of January of this year have had between a 23-24% pay reduction on their reimbursement. There comes a point in time where it's very difficult to have a sustainable business model in this arena.

And it is critical that we keep that in mind, not to endanger the amount of healthcare providers as we’re looking at cost-cutting measures. And a lot of the rules on payment, also for the hospitals, it’s just not the Medicaid arena. Of course, our Federal regulations with the Medicare world also impacts them very severely. [SPEAKER CHANGES] If someone could get back with me, if you or Adam, or Dr. Denning, or whoever… it’d be appreciated. [SPEAKER CHANGES] Thank you. Thank you Madam Secretary. Susan, if you would like to go ahead. We cut it close for you. We gave you six days to get it in. [SPEAKER CHANGES] While those handouts are going out, this is the second part of the presentation we started yesterday. You also received two additional handouts which we did not bring. You have copies of two Fiscal briefs. These are the documents that we produce every year after session is over, that gives you the highlights of all the budget actions you’ve taken in Health and Human Services during that session and those documents lay out not only the major actions that you’ve taken, but at the back of those documents are charts by division with historical budget information that we typically present in committee. But you can find these online and you actually got hard copies of them yesterday. It has two years of actual, for last year, it has three years of actual expenditures and then what the certified budget was. So for each division within HHS it has how many positions are in that agency, the actual expenditures, and actually what the certified budget is for the current Fiscal year. So very quickly going into a budget overview for Health and Human Services, the first slide is the statutory authority for Health and Human Services. Each agency and department has the statutory authority set in law. Based on the conversation that we had in the committee room yesterday, I would suggest that if you go in the direction of moving toward funding outcome based programs, at the end when we wrap up all of our educational briefings, you might want to come back to your statutory authority and make sure that it is still in line with what it is the general assembly has a vision for this agency. Particularly focusing on the last bullet, I wanted to point out since we talked so much yesterday about preventive measures that one of the department’s goals is to establish priorities for careful planning of preventive services. And so, the last time this statute was actually revised was in 1997. The secretary has already talked about her organizational structure and this is for your information how her department at the secretary level is organized. So Health and Human Services, this is the certified budget for the current fiscal year, for 14 – 15. 5.2 billion dollars. 21 billion dollars is the size of your total state budget, general fund budget, that’s the money that comes from general purpose revenue and does not include federal or other receipts. It is only the general fund portion of the budget. It is what is included in your money report every year and the document that accompanies the budget bill when you debate the budget bill that goes to the Senate and House floor is roughly 21 billion dollars. The portion for that that is Health and Human Services is approximately 5.1 billion, 24%. Education is the one sub-committee, one area that has a larger percentage and that’s at 56%. Justice and Public Safety at 11%, and then you see the remaining committees significantly smaller with Natural and Economic Resources, General Government, and then your State Right Reserves and Capital at 5%. This is the chart that gives you the same information I laid out for you in the table in the preceding document, but you will see that Mental Health is 680 million dollars is 3% of the total state budget at 21 billion dollars. All the other agencies make up about 4% of the state budget with Health and Human Services, again, equaling 24% of the total state budget.

And of course, this is what we spend the majority of your time, historically what we've talked about in subcommittee, and when you get your target, this is, this is where we go to try to help you find reductions when you're given a target smaller than you're spending the current fiscal year in the governor's budget. This is the areas that you focus on to try to find those reductions. What we wanna talk about more and what we talked yesterday was focusing more on the fact that health and human services has a total budget that is almost the size of the total state budget, which is $19 billion. You see Medicaid is still the lion's share of this budget at roughly 14 billion with social services having more funds in total than mental health does at 1.7 billion. Mental health is roughly 1.4 billion, followed by public health at $827 million. You can't read this on the overhead, but you do have a summary chart, and this document ties more closely to the briefings that I, the other two documents I referenced when I started, and it shows you in summary how you've changed, your net legislative, your legislative net changes over the past two years, and this was in 13-14, so your last long session, when you did a biennial budget this is what, what you enacted for health and human services. So if you look, if you look at that column, the legislative net changes, it shows you how you changed the governor's recommended continuation budget. And on a net basis, you increased his budget by $378 million. I will tell you that buried in that number was $434 million for the Medicaid rebates. So this is a misleading number because there are reductions, a lot of reductions built into those net legislative changes. Now, for the next two meetings we're gonna go over specific changes item by item that were made in the subcommittee. So we'll talk more during the next two meetings about specific reductions and specific expansion items, and the status of those items. That's the plan for the next two meetings. So we'll get into the detail of these net legislative changes, but I did want to point out the amount of the net rebate, of the rebates for Medicaid 13-14 was $434 million which is included in that net $378 million increase. That budget that in 13-14 was increased by 8.2% for 13-14, and your second year of the biennial budget, you increased the budget by $507 million, or 11% compared to the governor's recommended budget. Included in that $507 million was $557 million for Medicaid and the rebates. Then last year in your short session you came in and made adjustments to that biennial budget. You increased the health and human services budget by $10.4 million and included in that $10.4 million was an additional $136 million for the Medicaid program nonrecurring funds. Separately from that included in the reserve section is $186 million for Medicaid contingency reserve. And mister chair, that's a high level overview of the changes that have been made to the health and human services budget over the last two years, and as I said, we'll get into the details of specific cuts and expansion items that have been included in these numbers in the past two years, and that will be most likely the next two meetings, next two committee meetings that we have. [SPEAKER CHANGES] Representative Insko. [SPEAKER CHANGES] Thank you and Susan, on the, on page 13 you started with how, the percent of the budget. I think, I'm not sure exactly what is for the division of mental health, developmental disabilities, and substance abuse services. We used to have all the money for the state facilities in that budget. Can you tell us now what is in that budget, have we moved that money out, or is that money still with the state facilities? [SPEAKER CHANGES] Representative Insko, in the $680 million, the facility money is still in there. [SPEAKER CHANGES] And then, and then the, where the, where you have the services? State funded services? [SPEAKER CHANGES] Yes, ma'am. So the $680 million includes the services and the money for the facilities. [SPEAKER CHANGES] Excuse, and could you have her break that down? Does she know what that is? [SPEAKER CHANGES] Representative, Denise Thomas, fiscal research. Representative Insko, about 340 million is for community services, but that includes about, I think, between 75 and 80 million of federal funding, so net of the federal it's more like 250 that would be state general fund money for community services. [SPEAKER CHANGES] Thank you, and just, at some point, I'd like to review, when we get into the budget details, how that fund, the state dollars for mental health, developmental disabilities, and substance abuse services, how, how this

trajectory over the last seven or eight to ten years. [SPEAKER CHANGES] Representative Insko, for the Division of Mental Health, you’ll have four years of history in the brief that we gave you yesterday, but if you want it broken down, we can provide it to you. [SPEAKER CHANGES] Vice Chair? [SPEAKER CHANGES] May I address Mr. Jacobs? Would you go over with HHS while they’re here about us switching from just paying for services versus outcome investing and how we’re going to want to be briefed on that as they go along? [SPEAKER CHANGES] Mr. Chair and members of the committee, from the Secretary’s comments, it sounds like she’s talking about pretty much the same thing that you are. She referenced investing in Health and Human Services even when she talks about Medicaid, so I’m not sure of that. What the committee’s talking about doing is not in sync with what her vision is for Health and Human Services, but I won’t speak for that. I will back up to the earlier slides and talk about what we were talking about yesterday, and that is a focus again away from counting things in this committee to talking about outcomes, and we were going to invite the Pew Center in. HHS is familiar with the Pew Center and how they have helped states look at programs to figure out what the return is on an investment in a program and the fact that even though we’re spending more of healthcare in America, not just North Carolina, it’s not necessarily syncing up with better outcomes, and the Secretary knows that. She’s quite familiar with that, so this is not anything new for Health and Human Services. I guess what is new is the fact that we are... for this long session, I will point out for the Health and Human Services that we are planning to focus on children 0-5, and so children 0-5 will be the focus, and so we’re going to look at programs in North Carolina that are focused on reducing infant mortality, improving birth outcomes, and so we’ll be working with the School of Public Health, with the Division of Public Health – the Division is already aware; we’ve already contacted some of their staff and involved them in these presentations – and your Division of Social Services. So it will be a united effort to provide you information, but her staff were here yesterday when we made the presentation, so I would assume that they were aware of the new direction that we were going in. That’s about all I would be able to say on that, unless the Secretary has comments about the new directions the committee’s moving in. [SPEAKER CHANGES] Representative Farmer-Butterfield. [SPEAKER CHANGES] I was wondering if you all have already in place a comparative of the certified general fund budget for, like, the last five or six years in terms of the total percentages by subcommittee areas. Could we get that? [SPEAKER CHANGES] Mr. Chair, Representative Farmer-Butterfield, I think out budget development team has that and we can get it for you. We’d be happy to get that to you. [SPEAKER CHANGES] Chairman Avila. [SPEAKER CHANGES] Actually Mr. Chairman, this is more of a question for you. Would you please direct staff to disperse all of the information for the request to the complete committee? [SPEAKER CHANGES] Would you like ?? disperse ?? Yes ma’am. [SPEAKER CHANGES] Thank you, Ms. Jacobs. Come forward. I’ve been asked… Chairman Pate wanted to address before we adjourn. [SPEAKER CHANGES] And I’ll just take a second. With the discussions when the Secretary was addressing us, a question came up about Vidant Hospital down in Belhaven being converted over to mental health – beds, sort of procedure – and I just wanted to let people know that Vidant does not own the Belhaven Hospital building; it has been turned over to Pantego Creek LLC. That occurred during the negotiations with the town of Belhaven, so that puts another cushion in there as to where we would have to go if we decided to look at that facility to upgrade it to a mental health facility. Thank you, Mr. Chairman. [SPEAKER CHANGES] Thank you, members of the committee. I look forward to as we continue this process moving back forward, and having reached our hour of adjournment, we will stand adjourned.