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Public Policy Update - July 2021


Infrastructure and Budget Reconciliation

Work continues in Congress related to investments to help our country recover from the COVID-19 pandemic. President Biden and House and Senate Democrats and Republicans have been meeting and negotiating what ideas can be passed with bipartisan support. This means that Democrats and Republicans are working together to pass legislation on funding for those things they can agree on. It has been referred to as an infrastructure package (which includes things like roads, bridges, schools, healthcare, and other government services). .

There are additional items that Democratic Congressional leaders plan to move forward through a budget reconciliation measure. Budget Reconciliation is a tool that makes legislation easier to pass in the Senate; a reconciliation bill only needs a simple majority (51) in the Senate.

A $400 billion investment in Home and Community Based Services (HCBS) proposed by President Biden in his American Jobs Plan is the largest priority of the disability community that was included in proposals. We now know that this priority will move forward as part of budget reconciliation. The Better Care Better Jobs Act (S.2210, H.R. 4231) is the legislative language to pass this historic investment in HCBS.

Abuse and Neglect

A federal appeals court has overturned the Food and Drug Administration's ban on the use of electric shock devices on people with disabilities. In March of 2020, following years of pressure from the disability community the Food and Drug Administration (FDA) banned electrical shock devices used to discourage behavior in people with disabilities. The recent ruling said that the FDA did not have the authority to interfere with ‘medical practice’.  The shock devices are only known to be in use in one place in the U.S., the Judge Rotenberg Educational Center (JRC) of Canton, Massachusetts, a residential school for people with autism and other psychiatric, developmental or mental disabilities. This ruling allows the use of electronic shock to continue at JRC. 



The Senate released their budget on June 22 and it was passed by the Senate on June 25. Here are some of the highlights of the Senate budget that are related to the Council’s priorities:

1,000 Waiver Slots: The budget includes funding for 1,000 new Innovations waiver slots over two years. While we are glad to see Innovations slots in the budget, advocates had pushed for a minimum of 2,000 slots (1,000 per year). 

There are over 15,500 people on the waiting list and about 750 people are added each year.  There is a need for more than 1,000 slots. We were also hoping to see language from HB389/SB350 requiring the Department of Health and Human Services to work with stakeholders to develop a 10 Year Plan for addressing the waitlist. 

Waiver Flexibility to the Division of Health Benefits (DHB): In the special provisions of the budget, the state is allowed to come up with new ways to serve people on the waitlist, such as different kinds of waivers or a tiered waiver. 

New waivers would still have to be within the amount of funding that was allocated for the 1,000 slots. 

ICF-I/DD Direct Support Worker (DSP) Wages: The budget includes $17.5 million to increase the wages of DSPs working in Intermediate Care Facilities (ICF) for people with Intellectual and/or Developmental Disabilities (I/DD). The legislation requires that 80% of funds allocated to ICF providers go to wage increases. The budget also includes additional funding for ICF-I/DD providers.

This wage increase only affects people working in ICF-I/DD facilities/group homes and does not include other community-based DSP’s. We were hoping to see a more comprehensive plan such as the one outlined in HB 914 Support Our Direct Care Workforce. 

One-time DSP Bonus: Allocates $100 million in federal recovery funding in Medicaid to distribute one-time $1,500 bonuses to certain eligible direct support workers employed during a specific time period during the pandemic.  

This is a one-time payment to some DSPs in the community, and does not cover all DSPs. 

Special Assistance Personal Needs: The state special assistance personal needs allowance will be raised from $46 per month to $70 per month.

Students with Disabilities: The budget includes $40 million for public schools to use if enrollment of students with special needs is more than expected. 

There is a 12.75% cap on special education funding for school districts that is still in effect so these funds cannot be used if it would put school districts over this cap. We were hoping to see a new funding formula (HB 249) in the budget that would increase this cap. 

LME/MCO Funding: LME/MCOs will be allowed to keep $30 million in funds that in previous budget years have been transferred to Medicaid Reserves or the General Fund. 

Over the past eight years, around $500 million has been removed from the LME/MCO system. So this begins to restore some of those funds.  

The Senate budget is not the final budget.  The House is now working on their budget so we are hopeful that some of the areas of concern outlined above will be addressed in the House budget.  Once the House budget is approved, a conference committee will be appointed to work out the differences between the two budgets.  

Other State News

Many of you may have heard the news that Vaya and Cardinal LME-MCOs are merging.  This comes after several counties made the decision to leave Cardinal which left Cardinal with too few counties to support operations. At this time, it seems that Stanley, Forsyth, Cabarrus, and possibly 3 other counties will move to Partners LME-MCO. Orange and Mecklenburg counties will move to Alliance LME-MCO. A couple of other Cardinal counties may move to Sandhills. The remaining Cardinal Counties will likely merge with Vaya. The Department of Health and Human Services (DHHS) continues to work closely with Vaya and Cardinal to work through the details.  The goal is to make sure people with disabilities continue to receive services and supports through this transition. 

Medicaid Transformation

As NC moves to a new system called Managed Care where private insurance companies will start managing care for people who use Medicaid, a big step happened on July 1 when the Standard Plan began.  People who are receiving services through an LME-MCO did not move to the Standard Plan because the Standard Plan does not include support services provided through the LME-MCO. These individuals will continue to receive their supports through LME-MCO and their healthcare through Medicaid Direct. They will move to the Tailored Plan next year. 

The Department of Health and Human Services received proposals from the LME/MCOs for operating the Tailored Plans which are scheduled to begin in July 2022.  The announcement about which LME/MCOs will be given contracts is expected in August. This announcement was delayed as a result of the several counties who are moving or have requested to move from Cardinal to other LME/MCOs. It is not clear whether this delay will impact the start date for the Tailored Plans.  

NC Spending Plan for Federal Funds 

The American Rescue Plan Act of 2021 allows NC Medicaid to receive additional funding for its Home and Community-Based Services (HCBS) programs.  NC Medicaid recently submitted its “North Carolina Spending Plan for the Implementation of the American Rescue Plan Act of 2021” to the Centers for Medicare & Medicaid Services (CMS) for review and approval. A few highlights of this proposal include:

Waiver Expansion & Waitlist Reduction: NC Medicaid is proposing the expansion of waiver slots and reduction of waitlists for four of NC Medicaid’s HCBS programs. This includes the Innovations waiver. 

Home Health Enhancements: Home Health will be expanded beyond the current criteria to include persons who are transitioning from institutions to the community and who have three or more chronic conditions of any type. This effort will enable more people to receive services in the community. 

Expand Research-Based Behavioral Health Treatment (RT-BTH) to provide Autism-specific supports to people over 21.  This would expand the current supports that are only available to children. 

Unified Waitlist Project: This would support DHHS efforts in developing a state waitlist that contains up-to-date information on people who are waiting for Innovations slots and other supports. 

*The NC proposed plan includes items that support priorities of the Council.  The state is waiting on CMS for feedback and hopefully approval of these funding proposals.


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North Carolina Council on Developmental Disabilities
820 South Boylan Avenue
Raleigh, NC  27603
919-527-6500 (voice/tdd)
800-357-6916 (voice/tdd)
800-357-6916 (TTY)
919-850-2915 fax