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State Budget and Managed Care Waiver Update

NC State Budget

Last week the NC General Assembly passed a budget for the 2011-2013 budget years that was compromise bill negotiated between the NC House and NC Senate, prior to the Senate passing their own budget. In the final version, the General Assembly used the House version of the budget numbers for Health and Human Services (HHS), reducing Senate proposed cuts down to the House levels.  We reported on the House budget in our blog post  and a chart outlining the final cuts in the compromise budget is below. All in all while these cuts in HHS are not good, they could have been much worse. There is a $45 million dollar cut to IPRS state funds for Local Management Entities (LMEs) for services across intellectual and developmental disabilities (I/DD), addiction and mental health services; however the budget directs LMEs to use $25 million of their fund balances, reducing the cut to $20 million. A number of LMEs do not have fund balances, so making up the rest of the $20 million in cuts with existing funds is unlikely. The cut to non-profit funding has been reduced to $5 million dollars. The Medicaid cuts are a combination of savings through increased use of public managed care across the Medicaid system, provider rate cuts, cuts to services like Personal Care, and through additional Federal funding. However, if the NC Department of Health and Human Services is not able to meet their budget, they are authorized to reduce or eliminate optional services including many that could impact people with autism spectrum disorder.  

Education across the board sustained deep cuts.  Early education and development programs like More at 4 and Smart Start took cuts of $16 million and $37 million respectively and will also be required to limit the scope of what they do. Schools were cut by $408 million, with the largest cuts to local school districts of $198 million, non-instructional support $60 million, and instructional support $23 million. The budget adds $62 million in funds for class size reduction in grades 1-3. Universities and Community colleges took cuts in the range of 15%.

Managed Care Waivers

As we mentioned in previous updates, the budget includes proposed savings for implementation of 1915b/c managed care waivers across the intellectual and developmental disability, mental health, and addictive disease system. In addition, two bills have passed the Legislature that expand managed care from one region, Piedmont Behavioral Health (PBH), to every LME across the entire state by July of 2013. Senate Bill 316  allows PBH to expand their waiver to more counties, and has passed both chambers. House Bill 916, which allows for additional waiver expansion to other LMEs was heard in Senate Mental Health and Youth Committee, was passed on the Senate floor and is now headed to the Governor’s desk.

The final version of H 916 does not contain independent case management, but it does allow an LME waiver site to contract for “treatment plan development” and for the “community guide” service which we believe allows some independent development of person centered plans and offers assistance to consumers and families.  The bill contains several other provisions which are a positive step for people with I/DD: aggregate funding, an intent to use future savings to expand services, continuity of care language, and the study of the use of the “I” option for I/DD.

Because the managed care waiver will have a significant impact on everyone with autism who uses any public funding, including CAP MR/DD, Medicaid, IPRS, and any other services they access through the LMEs, we urge you to pay close attention to your local communities waiver plan development.  Every LME has a website and customer relations staff and should be soliciting input from the public as they make these changes. The Autism Society of North Carolina will continue provide you with information on the new waivers, will work at the state and local level to monitor implementation and will recommend solutions to any problems that arise.

The Autism Society of North Carolina has compiled a list of cuts below we feel are relevant to people on the autism spectrum. For a full list of proposed budget cuts, visit the General Assembly web site  and review the articles under the “News and Information” section (left-hand column). The “Money Report” links is a list of cuts, and the “Bill Text” link includes an overview of the funding as well as the “special provisions” stating how funding is to be used and related policy changes. Items in () indicate cuts.

Department Fiscal Year 2011-2012 Fiscal Year 2012-2013

DHHS Admin

Non-Profit Funding



CARELINE (handles calls
for help, including Medicaid problems)



Div Child Development

Smart Start



Discontinue transport



Div of Public Health

Early Intervention



Div of Medical Assistance

Modify Optional and
Mandatory Services (total of several)



Eliminate inflationary



Adjust provider rates



Behavioral Health 1915
b/c waiver (includes DD, autism)



CCNC savings
(implementing more medical homes)



Div of Mental Health,
Developmental Disabilities, Substance Abuse

Eliminate 7 advocacy
positions (in state facilities)



Eliminate Community
Funding (IPRS) for Medicaid recipients, except residential support



Swap (LME) fund balance
w/ state service funds



Reduce Division
management flex funds (emergency fund)




Public Schools Total
Cuts (-$65 mil transferred)



LEA adjustment (schools return funds to state, make cuts



Community Colleges Total enrollment growth funded, but tuition
increased and all programs cut



University System Total enrollment funded, but 470 mil flex cut to be determined by UNC



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