February 8, 2024
The Joint Legislative Oversight Committees (JLOC) on Health and Human Services and Medicaid convened on Tuesday to discuss issues related to social services and child welfare, child care challenges, Medicaid enrollment and transformation updates, financial updates, and more.
The JLOC on Health and Human Services meeting began with opening remarks from NCDHHS Secretary Kody Kinsley who provided an update on Medicaid expansion. Expansion launched on December 1, 2023 and as of this week, nearly 344,000 North Carolinians are enrolled in the program with over 150,000 prescriptions filled and $2.5 million in dental claims. While most states implement Medicaid expansion in six months to a year, North Carolina was able to launch the program in 58 days. Secretary Kinsley highlighted several key areas of focus for the department this year, including childcare and early education systems in crisis, mental health support for youth, continued work on Medicaid transformation, improving service delivery for retail services, and protecting the older and disabled population.
Susan Osborne, Deputy Secretary for Opportunity & Well-Being, and Lisa Cauley, Senior Director of Human Services, provided an update on child welfare issues in the state. North Carolina’s social services system is state-supervised and county-administered – one of only nine in the country. Most states have a centralized administrative system, but NC continues to implement a regional support model for social services. Local DSS offices are facing a workforce crisis, which is negatively impacting child welfare services in counties across the state. Over half of NC counties do not have enough staff to meet current caseload levels. The Department requested additional state funding to help address the workforce challenges with local DSS offices.
NCDHHS leaders also provided an overview of children in foster care. Last fiscal year, 15,047 children spent at least one day in foster care in NC. Key challenges in the system persist. Children are in the system too long, face multiple placements, and are placed in inappropriate settings – all of which contribute to increased trauma for the child. To address these challenges, a new program launched to provide financial supports to kinship providers to increase the number of foster-care involved youth who are placed in kinship care. The legislature also approved an increase in foster care rates last year. Moving forward, the Department will continue to implement behavioral health initiatives funded by the NC General Assembly in the state budget last year and will request legislative action to help alleviate the staffing crisis to better serve children and families. Lastly, the committee received a presentation from Ariel Ford, Director of the Division of Child Development and Early Education, on child care issues in NC.
The JLOC on Medicaid meeting in the afternoon began with brief remarks from NCDHHS Secretary Kinsley, who ensured the committee that the Department was on track to launch Medicaid tailored plans for individuals with behavioral health needs and intellectual/developmental disabilities (I/DDs) on July 1, 2024. Unlike standard Medicaid plans, the tailored plans will be administered by four state-funded LME/MCOs. Tailored plans were initially supposed to go live on December 1, 2022 but the Department delayed the launch several times.
Adam Levinson, Chief Financial Officer at NCDHHS, provided a financial update on the Medicaid program. While Medicaid is trending towards being on budget this fiscal year, there is some uncertainty due to the decline in the pace of adult enrollment. This uncertainty could impact Medicaid transformation contract costs and timelines for planned projects. In FY25, there will be additional state funding needs due to the federal match rate decrease, known as the FMAP. The decreased FMAP (.6591 to .6506) is due to North Carolina becoming a wealthier state, which changes the federal government’s match for the program. Additional state funding will also be needed to modernize rates for Medicaid providers, many of which haven’t been updated since 2012-2015.
Jay Ludlum, Deputy Secretary for Medicaid, then shared an update on Medicaid transformation. Ludlum highlighted how the prepaid health plans were able to successfully absorb the 750,000+ beneficiaries that joined the Medicaid program during the Public Health Emergency (PHE) and the additional Medicaid beneficiaries during the first month of expansion. Although Ludlum reported minimal systemic issues from the PHPs with claims payment or network adequacy, Senator Gale Adcock raised several concerns with PHPs regarding the electronic visit and verification (EVV) launch. The committee urged Ludlum to have a resolution on the issue by the next hearing. Ludlum also provided additional details on the expected launch of tailored plans on July 1, 2024.
The committee received more information on the success of Medicaid expansion in NC, with the Department emphasizing the strong collaboration with DSS offices, health plans, and community partners. Ludlum provided an overview of the new NC Medicaid Expansion Enrollment dashboard from the Department and highlighted increased provider enrollment and participation in the Medicaid program.
The last presentation of the day was from the Fiscal Research Division of the NCGA which shared information on state savings achieved from Medicaid expansion. NC received an increased FMAP as an incentive for expanding Medicaid which resulted in a decrease of 14.7% in the cost of the State share. When Medicaid expansion launched in December, the State began receiving additional federal Medicaid receipts and as of January 31, 2024, the Division of Health Benefits deposited $198 million into the ARPA temporary savings fund. These funds will support various healthcare initiatives across the state including workforce development, rural healthcare centers, behavioral health, and more.
The JLOC on HHS and Medicaid is scheduled to convene again on Tuesday, March 12.