The NC Senate and House passed the budget conference committee report for H259, the Appropriations Act for 2023-2025 on September 22nd, ending several months of negotiations that delayed the state budget nearly three months into the fiscal year. The budget includes significant amounts of funding for behavioral health and developmental disabilities services and funding for some new programs that specifically support people with I/DD. The passage of the budget also marks the go-ahead for North Carolina to expand Medicaid to lower-income adults who previously fell into the healthcare coverage gap.
Budget highlights
- Medicaid programs: The budget increases the Medicaid rebase, ensuring ongoing support for Medicaid programs like the new 1915i services for people with IDD as well as those with behavioral health needs. While the budget did not fully fund the Administration’s requested Medicaid rebase, it did include $650 million for a separate fund, the Medicaid Contingency Reserve, to assist with any Medicaid budget shortfalls over the two-year budget cycle. There are additional Medicaid funds for Medicaid Transformation activities including the implementation of Tailored Plans and programs across Medicaid managed care.
- Waivers and DSP wages: Also included in the Medicaid budget are 350 additional Innovations waiver slots, $60 million in funding to raise Innovations waiver rates to improve Direct Support Professional (DSP) wages, and an additional $50 million to increase provider rates across other behavioral health services. This $50 million can also be applied to non-Innovation waiver intellectual and/or developmental disability services (I/DD) including those for people on the autism spectrum.
- The rate changes will take time to implement: the budget needs to be certified, a process that takes 90-100 days; LME MCOs are undergoing consolidation (see more info below); and the Division of Health Benefits will need to determine what amount of rate adjustments this funding will allow for, then adjust the per member per month rate paid to the newly consolidated LMEs before provider rates can be adjusted. The Autism Society of North Carolina (ASNC) will be working with state agencies and LMEs to monitor these changes, but we think it’s likely that new rates won’t start until the next calendar year.
- ASNC recognizes that with over 17,000 people on the Registry of Unmet Needs, all of whom qualify for a waiver, 350 new slots is not enough to meet the ongoing demand for Innovations waiver services. And, $60 million is below the estimated $87-$93 million needed to increase DSP wages to $18 per hour by 2025, as recommended by advocates in this report. ASNC will be sharing more info about our ongoing advocacy for fair wages for DSPs and eliminating the waiting list as we head into the short legislative session in spring.
- Employment supports and post-secondary education: There is $5 million in additional funds for Competitive Integrated Employment (CIE) activities to ensure that people with disabilities, including those with autism, find and keep community-based employment as well as have access to day supports and community activities. There are several appropriations directed at post-secondary education: $3.9 million to establish a network of 15 community college programs to provide micro-credential or other credential programs that will be open to students with intellectual and developmental disabilities to enroll, complete, and find employment; $750,000 to support pilot programs that would place vocational rehabilitation counselors in community colleges to support students with I/DD in reaching employment goals; and $3 million in funding to establish two new education and workforce training programs for people with I/DD at NC Central University and NC State University.
- Expanding Medicaid eligibility: The budget includes language to implement House Bill 76, Access to Healthcare Options. This legislation will extend Medicaid coverage to an estimated 600,000 individuals and families with incomes up to 133% of the federal poverty level, including adults on the autism spectrum and others with I/DD who would not have qualified for Medicaid previously. The Governor announced that the new program would begin December 1, 2023, and ASNC will be providing more info about the expanded program as it is rolled out.
- Investments in health: As a result of expanding Medicaid coverage, North Carolina qualifies for increased funding from the Federal government, resulting in additional state savings and federal dollars that will be reinvested into health care, especially services for people with behavioral health and developmental needs. Overall, the budget includes an $835 million dollar investment in behavioral health including crisis services, inpatient and outpatient behavioral health services, and increased wrap-around services for children with behavioral health needs.
- Cap on Special Education funding: Missing from both proposals is an end to the 13% cap on special education funds to local school districts, however, a budget special provision directs the Department of Public Instruction to develop a school funding model using “weighted funding” for Exceptional Children students and report to the Joint Education Oversight Committee on their proposal by January 15, 2024. A weighted funding model would likely replace the EC funding cap in favor of one that funded students with disabilities based on categories of need.
Budget special provisions
Every budget includes policy language that directs how funds in the budget should be used, but sometimes other policy legislation is added to the budget bill as well.
- LME MCO changes/Tailored Plan changes: the budget special provisions include a new July 1, 2024 start date for the Tailored Plans, and changes the minimum covered lives for LME MCOs from 500,000 to 1.5 million. Since not all LME MCOs currently cover 1.5 million people, The Secretary of the NC Department of Health and Human Services (NC DHHS) is given new authority to consolidate the current LME MCOs into a smaller number prior to the implementation of the Tailored Plans in July and to be able to re-organize LME MCO services should LMEs to ensure continuity of care and in the case of LME MCO breach of contract and/or dissolution. Counties no longer have the authority to re-align with different LMES but will have input into Tailored Plans through NC DHHS. The Secretary has 90 days from Oct 2nd when the budget became law put forward a plan for reducing the number of LMEs and any consolidations of LME MCO service regions.
- Relatives providing services under Innovations: This special provision will amend the 1915(c) Innovations waiver to ask the federal Centers for Medicare and Medicaid Services (CMS) to permit a relative of a youth on the Innovation waiver to provide services. That relative needs to live in the same home as the youth who is receiving waiver services. NC DHHS will need to seek permission for this change as well as develop other clinical coverage policies before it is implemented.
- Threat Assessment Teams: Included in the budget special provisions is language from House Bill 605 regarding School Threat Assessment Teams in public schools (programs like this are voluntary in non-public schools). Threat Assessment Teams have generated some controversy and have raised concerns among advocates, parents, and professionals about the use of threat assessments to exclude students with disabilities from public education. The budget includes $35 million in funding for school safety grants to support students in crisis as well as safety training and technology. ASNC will continue to advocate for schools to use safety funds, as well as other funding, to support students in need of help rather than excluding them from school.
[Abbreviated chart of I/DD items. This does not include all I/DD related items in the budget update]
| Funding Item | Governor | House | Senate | Conference/Final Budget |
| Innovations Waivers
|
$14,205,000 Recurring FY 2023-2024 & $28,410,000 Recurring FY2024-2025
Creates 1,000 new Innovation Waiver slots. DHHS proposes 1,800 slots effective January 1, 2024. |
$6,100,000 Recurring FY2023-2024 and FY2024-2025
This will provide funding for 250 Innovation waiver slots. |
$10,000,000 Recurring FY2023-2024 and FY 2024-2025
This will provide funding for 350 Innovation waiver slots. |
$10,000,000 recurring FY2023-2024 and FY 2024-2025
This will provide funding for 350 Innovation waiver slots. |
| Direct Care Worker Wages-Innovations Waiver
|
$18,000,000 Recurring FY2023-2024 and $72,000,000 FY2024-2025
Invests funds to build on the HCBS rate increase in SL 2021-180. Funding will support a pay increase in each year of the biennium raising the Innovation Waiver Direct Care Workforce wage to $18/hour. |
$60,000,000 Recurring FY2023-2024 and FY2024-2025
Provides funds to increase the wages of direct care workers who provide services for individuals on the State’s Innovations waiver. Pass-through at 85% |
$60,000,000 Recurring FY2023-2024 and FY2024-2025
Provides funds to increase the wages of direct care workers who provide services for individuals. No pass-through language requirement.
|
$60,000,000 Recurring FY2023-2024 and FY2024-2025
Provides funds to increase the wages of direct care workers who provide services for individuals. No pass-through language requirement. There is language regarding providers attesting that this funding will be used to increase wages and/or benefits to direct care workers. While it states in the budget that the intent is to raise hourly wages $6.50 more than they currently are, it is likely that at least another $30 million in funding would be needed to do so. |
| Personal Care Services
|
$30,000,000 Recurring FY2023-2025, FY2024-2025
Increases the Personal Care services rate by $2.14/hour from 2020 levels, making 50% of the COVID-19 rate permanent. (sets rate at $21.34) |
$76,700,000 Recurring FY2023-2024 and FY2024-2025
Increases the Medicaid reimbursement rate for personal care services to $6.25 per 15 minutes, or $25/hour |
No funding in the Senate budget. | $10 million in nonrecurring funding coupled with $50 million in recurring funding for fiscal year 2023-2024 and $60 million in recurring funding for fiscal year 2024-2025 to keep the current COVID-19 rate in place. That rate is $23.84. After several months of extension, this will set a new permanent rate for personal care services under Medicaid Direct, CAP/C, CAP/DA, and CAP/CO. Rates are effective July 1, 2023. |
| Competitive Nonprofit Grants | No Change | No Change | Eliminates funding lines for competitive nonprofit grants. | Restores state funding and federal block grant funds to ASNC and other non-profits as individual state budget line items, not competitive grants. |
| Rates for Behavioral Health Services | $75,000,000 Nonrecurring FY2023-2024 $150,00,000 Nonrecurring FY2024-2025
Invests $75 million in state dollars each year for the next three years to increase rates for inpatient and community behavioral health services, importing access to these services statewide. (IHOPE) |
No specific line item. | $110,000,000 Recurring FY2023-2024 and FY2024-2025
Provides funds to enable the Division of Health Benefits to increase the Medicaid reimbursement rates for behavioral health providers |
$50 million in recurring funding for fiscal year 2023-2024 and $75 million in recurring funding for fiscal year 2024-2025.
This appropriation will enable the Division of Health Benefits to increase the Medicaid reimbursement rates for behavioral health providers. This funding may also be applied to non-Innovation waiver I/DD services. |
| Group Homes Stabilization and Transition | ($10,000,000)
Eliminates the Group Home Stabilization and Transition initiative that was created in 2021. |
($10,000,000)
Eliminates the Group Home Stabilization and Transition initiative that was created in 2021. |
||
| Competitive Integrated Employment | $5,000,000
|
Not in budget | $5,000,000 Recurring for FY2023-2024 and FY2024-2025
Provides funds to support competitive integrated employment through vocational rehabilitation services, day supports, and community services for individuals with intellectual and developmental disabilities. |
$5,000,000 Recurring for FY2023-2024 and FY2024-2025
Provides funds to support competitive integrated employment through vocational rehabilitation services, day supports, and community services for individuals with intellectual and developmental disabilities. |
| Medicaid Rebase | $629,720,781 Recurring FY2023-2024 $913,574,696 Recurring FY2024-2025
Provides funding projected changes in Medicaid enrollment, enrollment mix, capitation costs, and federal match rates, as well as the ongoing transition to managed care. |
$440,000,000 FY2023-2024 and $620,000,000 FY2024-2025 Recurring
Provides funding projected changes in Medicaid enrollment, enrollment mix, capitation costs, and federal match rates, as well as the ongoing transition to managed care. |
$540,000,000 FY2023-2024 and $720,000,000 FY2024-2025 Recurring
Provides funding for projected changes in Medicaid enrollment, enrollment mix, service, and capitation costs, and federal match rates, as well as the ongoing transition to managed care. |
$524,356,886 in fiscal year 2023-2024 and $720 million in fiscal year 2024-2025 to provide the necessary funding for projected changes in Medicaid enrollment, enrollment mix, capitation costs, and federal match rates along with the ongoing transition to managed care.
$650 Million to create a separate fund, Medicaid Contingency Reserve to assist with any Medicaid budget shortfalls. |
| Education Budget | ||||
| Career Pathways Support for Students with Intellectual and Developmental Disabilities
|
Not in budget | Not in budget | $3,963,094 Recurring FY2023-2024 and FY2024-2025
Provides funds to create a regional support network that supports training and job opportunities for students with intellectual disabilities across the State. Funding provided shall be used for college, regional, and State level infrastructures for the program. This includes hiring a program director and technical assistance position at the Community College System Office. |
$3,963,094 Recurring FY2023-2024 and FY2024-2025
Provides funds to create a regional support network that supports training and job opportunities for students with intellectual disabilities across the State. Funding provided shall be used for college, regional and State level infrastructures for the program. This includes hiring a program director and technical assistance position at the Community College System Office.
|
| Vocational Rehabilitation Pilot Program | Not in budget | Not in budget | $750,000 Nonrecurring
Provides funds to the System Office to contract with the Division of Vocational Rehabilitation Services for a 3-year pilot program. The program would place vocational rehabilitation counselors in colleges to assist students with intellectual and developmental disabilities with their career-related goals. |
$750,000 Nonrecurring
Provides funds to the System Office to contract with the Division of Vocational Rehabilitation Services for a 3-year pilot program. The program would place vocational rehabilitation counselors in colleges to assist students with intellectual and developmental disabilities with their career-related goals. |
You can view the state budget by going to the North Carolina General Assembly webpage and clicking on the link to “2023 budget” on the left side of the home page under “News and Information.” “Bill text” is the entire budget document including the special provisions and “Committee Report” is the information on specific funding items in the budget, sometimes referred to as the money report. Please note before printing that budget documents are hundreds of pages long (more than 1400 pages total). You can search the budget .pdf documents by clicking on the image of the round magnifying glass at the top of the document and entering keywords to search the document.
If you have questions about the budget or other public policy issues please contact the Autism Society of North Carolina‘s Jennifer Mahan, Director of Public Policy at jmahan@autismsociety-nc.org.
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