Legislative Wrap-Up of Short Session

The NC General Assembly has effectively wrapped up the short session of the 2019-2020 biennium.  With their adjournment on July 11th, any bill that did not get signed into law will now have to be reintroduced in the long session to be considered.  As legislative leaders indicated, there was not one singular budget bill considered during this session.  Instead, multiple bills included appropriations in specific areas of the State budget.  Public policy was also changed in many areas of State government.  Most notably, there is a new law that sets July 1, 2021 as the date certain that the Standard Plans for Medicaid will be implemented, and the authority to transfer the needed funds to make the transformation has been provided. 

COVID-19 played a large role in the way in which the session played out.  There were funding bills directed at addressing State and community needs related to COVID-19.  Legislators kept a close eye on the State revenue forecast to determine where the budget needed shoring up.  In fact, the July revenue figures will determine additional work that may need to be done prior to the long session that will begin in January 2021.    

To that end, the NC General Assembly is now in recess until September 2, 2020 when it will resume to potentially address 3 specific areas:

• Bills that appropriate funding related to COVID-19;
• Action on appointments;
• Action on Governor’s appointments or nominations.

Medicaid Transformation Signed Into Law:

The Medicaid Funding Act was signed into law by Governor Cooper.  This accomplishes something that the Governor and the General Assembly were not able to do last year:  1) provides funding for the transition with the claims lag and other implementation costs;

2) establishes provisions that are needed to support Medicaid Transformation. 

Related to Medicaid Transformation–

• Allows for a staggered start with full implementation of the Standard Plans to occur no later than July 1, 2021;
• Appropriates $69.42 million for infrastructure needs such as NC FAST upgrades, data management tools, program integrity;
• Allows DHHS to make a request for a transfer of funds that will cover qualifying needs such as the State share and will not be more than $270 million;
• Allows for the Tribal Medicaid managed care option;
• Revises the Supplemental Payment Program;
• Establishes the Medicaid Contingency Reserve;
• Establishes the Hospital Assessment Act;
• Amends the Gross Premium Tax to include PHP capitated contracts;
• Establishes the Hospital Uncompensated Care Fund to make payments to Institutions for Mental Diseases (IMDs) and hospitals to reimburse inpatient services uncompensated care costs or outpatient services uncompensated care costs or both. 

Medicaid Funding Act Additional Appropriations:

The Medicaid Funding Act does more than address Medicaid Transformation.  The new law also includes several provisions that are related to work under the purview of NC DHHS:

• $50 million from the Coronavirus Relief Fund is appropriated to the LME/MCOs to address the COVID-19 behavioral health and crisis service response. 
• Appropriates funds for the Medicaid program that include: 
  • $213 m, $136 m and $84 m transferred from different State funds to fund the Medicaid program rebase (essentially adjusting the budget to the current financial picture) and $30 m of current Medicaid funds will not revert to the General Fund of the State;
• Appropriates $15 million to select land located in Wake County suitable for the Dorothea Dix campus relocation project.
• Appropriates $26.4 million for NC FAST infrastructure updates.  
• Appropriates $6.15 million for updates and changes to the child welfare case management component of the North Carolina Families Accessing Services through Technology (NC FAST) system, including child welfare program changes in accordance with the federal Family First Prevention Services Act, updates for the Comprehensive Child Welfare Information System (CCWIS), funding for the Independent Verification and Validation (IV&V) contract, and risk assessment tool changes under Rylan’s Law, S.L. 2017-41.

School-Based Mental Health:

A new law, SL 2020-7, requires the State Board of Education to develop a school-based mental health plan for the State.  The State Board will also establish minimum requirements for each school district to develop a school-based mental health plan and a mental health training program and model suicide risk referral protocol. Deadlines for provisions of the new law to be completed include:

• 12/31/20:  Superintendent of Public Instruction will ensure that a copy of the school-based mental health policy adopted by the State Board is made available to each K-12 school unit;
• 7/1/21:  Each K-12 school unit will adopt a school-based mental health plan that incorporates the State Board policy, including a mental health training program and suicide risk referral protocol;
• 6/2022:  School personnel required to complete the training and employed in a K-12 school unit as of the effective date of this act will complete their initial mental health training by the end of the 2021-2022 school year.

The Superintendent’s Working Group on Student Health and Well-Being report of 5/31/18 includes recommendations that the State Board must use for the school-based mental health plan.  

Raise the Age of Juvenile Jurisdiction:  On December 1, 2019, North Carolina became the last State to change the age of juvenile jurisdiction and bring adolescents 16 up to 19 years of age into the juvenile justice system.  Last year, the General Assembly included funding for new positions to work with this population.  Two bills were signed into law that further strengthen the juvenile justice system. 

• SL 2020-35, Second Chance Act, expunges records of minors per Raise the Age.
• SL 2020-15, Raise the Age Funding, provides funding for capital improvements at Department of Public Safety facilities that are implementing Raise the Age. 

COVID-19:

SL 2020-4, 2020 COVID-19 Recovery Act: 

• Establishes the Coronavirus Relief Fund and specifies that the funds are only available for expenditures that are made from March 1, 2020 – December 30, 2020.  $1.275 billion from the State reserve is transferred to this fund.   All funds that are not expended by December 30, 2020 will revert back to the reserve.  The funds are allocated for administration by the Office of State Budget Management (OSBM). 
• Establishes the Local Government Coronavirus Relief Reserve to maintain federal funds, as allowed, to mitigate the economic impact of COVID-19 on local governments.  Authorizes up to $300 million in the fund with $150 million of that derived from the federal CARES Act.
• Establishes the COVID-19 Rural Hospitals Relief Fund with $65 million.
• Establishes the COVID-19 Teaching Hospitals Relief Fund with $15 million.
• Establishes the COVID-19 General Hospitals Relief Fund with $15 million.

SL 2020-32, State Operations/Increase Federal Funds Use, authorizes the transfer of $1.575 billion from the State’s Reserve and $150 million from the Local Government Coronavirus Relief Fund to allow for continuity of operations in certain areas.  $370 m will be used for wages, overtime, personal protective equipment, in-home monitoring and other supplies for State entities such as mental health institutions, prisons, community corrections, juvenile facilities, and veteran’s homes. 

SL 2020-3, COVID-19 Recovery Act, includes multiple provisions related to education and health care provisions in the pandemic. 

SL 2020-80, Coronavirus Relief Fund/Additions & Revisions, appropriates $5,000,000 to be allocated to group homes for individuals with intellectual or developmental disabilities, or both, to support the implementation of recommended Centers for Disease Control and Prevention guidance for preventive measures to address the introduction and spread of COVID-19 among residents and staff of these facilities.