August 11, 2020
The Joint Legislative Oversight Committee on Health and Human Services and the Joint Legislative Oversight Committee on Medicaid and N.C. Health Choice met today to receive an update on COVID-19 response from the N.C. Department of Health and Human Services.
Committee on Health and Human Services
N.C. DHHS Secretary, Dr. Mandy Cohen, updated the committee on the state’s COVID-19 metrics and strategies for slowing the spread of the virus. North Carolina was able to avoid a large surge of COVID-19 cases because of early and aggressive actions to flatten the curve, managing shortages of testing and PPE supplies, developing hospital surge plans, and building testing and contact tracing capabilities. The state has also implemented a number of support programs and initiatives for historically marginalized and underserved communities and for long-term care residents who have been hit particularly hard by the virus. Although N.C. has made progress on several of our key metrics, Secretary Cohen emphasized that progress is fragile and we must remain vigilant and consistent in our COVID-19 response.
The committee also received a COVID-19 budget update from N.C. DHHS. The state was a recipient of three broad funding streams for COVID-19 response from the federal government. The Coronavirus Aid, Relief, and Economic Security (CARES) Act established the Coronavirus Relief Fund (CRF) and provided funding to state, local, territorial, and tribal governments. All funding from the CRF that was appropriated by the General Assembly several months ago must be expended by December 31, 2020, although Secretary Cohen mentioned that this spending deadline could be extended through a bill currently in Congress. To date, N.C. DHHS has received $345,340,000 from the CRF. The state received additional funding from the federal government’s Families First Coronavirus Response Act and the Coronavirus Preparedness Response Act that authorized supplemental funding of several grant programs to help prevent, prepare for, or respond to the coronavirus pandemic. These funds have a longer liquidation period, ranging from 12 months to 36 months. To date, N.C. DHHS has received $508,230,785 in supplemental COVID-19 funding. The state also received a 6.2% increase in the Federal Medical Assistance Percentage (FMAP) for the Medicaid Program. This increase reduces the state share of costs for Medicaid, and is projected to equate to $500 million in avoided state cost through December 2020. Secretary Cohen outlined how the federal funding has been used to date, including an overview of key projects and programs that address support for families, prevention, testing and tracing, and isolation support.
Lastly, the committee heard from Dr. David Hill with the North Carolina Pediatric Society and N.C. DHHS Chief Deputy Secretary, Susan Perry, about the impact of COVID-19 on Children. Dr. Hill gave an overview of how COVID-19 affects children, including common symptoms, how often children get sick from the virus, and children who are at highest risk of contracting the virus. Deputy Secretary Perry outlined the pandemic’s impact on N.C.’s child care system and the department’s COVID-19 child care response. The committee also received an update on the state’s guidance for reopening pre-K and K-12 schools.
Committee on Medicaid and N.C. Health Choice
Secretary Cohen began the second meeting by emphasizing the need for North Carolina to expand Medicaid as a way for our state to fight COVID-19. North Carolina is one of 12 states in the country that has not expanded Medicaid. Expanding Medicaid would have provided an estimated 500,000 North Carolinians with access to affordable health care before COVID-19, and that number continues to grow throughout the pandemic. Secretary Cohen highlighted several accomplishments of N.C. Medicaid during the COVID-19 pandemic, including a rapid expansion of telehealth services and flexibilities, provider enablement and financial support, and increased member enrollment.
The department then gave an update on the status of Medicaid transformation. The state will transition from a fee-for-service system of Medicaid to managed care on July 1, 2021. Up to 1.8 million Medicaid beneficiaries will enroll in Standard Plans from five Prepaid Health Plans (PHPs), including AmeriHealth Caritas, Healthy Blue, United HealthCare, WellCare, and Carolina Complete Health. Open enrollment for managed care will begin on March 15, 2021, with auto enrollment beginning on May 14, 2021. The department highlighted key challenges with restarting a transition to managed care, including uncertainty about providers prioritizing contracts and added complexity in project planning due to the COVID-19 pandemic. N.C. DHHS is also planning to add a “Tribal Option” for the Eastern Band of Cherokee Indians that will go live on July 1, 2021.
Lastly, the committee received an update on enrollment trends and financial matters for Medicaid and N.C. Health Choice. Typically when there is a significant economic downturn, Medicaid enrollment increases. Medicaid enrollment has continued to climb throughout the pandemic and is forecasted to grow eight percent through 2021. Over the last six months, Medicaid and N.C. Health Choice programs have grown by approximately 125,000 beneficiaries. There was also an increase in financial expenditures for Medicaid and N.C. Health Choice associated with the state’s COVID-19 response. While there were significant expenditures from the pandemic, there has been even greater savings resulting from lower claims volume from social distancing, an increase in the FMAP (referenced above), and the state’s retention from accelerated hospital supplemental payments. The department also forecasts an increase in expenditures for the current fiscal year that began on July 1st.