2005 LEGISLATIVE SESSION ENDS WITH POSITIVE AND NEGATIVE OUTCOMES FOR LONG TERM CARE

The 2005 Session of the North Carolina General Assembly ended on September 2, and the high-profile issues such as the lottery, increase in the cigarette tax, lobbying reform, and determining an ultimate winner in the Superintendent of Public Instruction’s race dominated coverage of the legislative process. Occurring well below the radar and the news media’s attention were some important measures affecting long term care. Some of those measures were positive while others were less than ideal, and in a few instances, negative. Measures increasing state-level oversight of long term care facilities did receive funding. If those funds are used fully and as proposed, the results should be improvements in the state’s system of long term care. Several measures that would have benefited consumers when making choices about long term care facilities did not fare as well, and greater attention to such issues is warranted when the General Assembly reconvenes in May 2006.

Here is an abbreviated listing of some outcomes – positive, neutral and negative.

POSITIVE OUTCOMES

The number of slots for Special Assistance In-Home was increased from 800 to 1000.
Monthly payments for Special Assistance In-Home were raised from 50% to 75% of what recipients would receive if they were in long term care facilities.
Technical changes to the 2004 law passed creating a process for conducting criminal records background checks on long term care employees were adopted, thus allowing the law to be implemented fully.
Structure and oversight for home care providers were established in order to improve care and to prevent fraud and abuse of vulnerable seniors and handicapped individuals.
A star rating system for adult care homes was authorized to be developed by the Department of Health and Human Services (DHHS) to improve the quality of care and give consumers some guidance when selecting an adult care home for a family member.

6. The Penalty Review Committee was retained; however, with a different role and without any required training for committee members. Civil penalties for providing false information or omitting information on licensure applications were created. Home health agencies are prohibited from employing people with criminal histories or a proven record of patient abuse or neglect. Increased penalties for violations in long term care facilities were mandated.

More training for adult care home specialists and supervisors was mandated.
Hours of Adult Care Home Personal Care Services for residents of Special Care Units were increased from 1.1 hours per day to 4.07 hours per day. However, DHHS was mandated to create a utilization management system for Personal Care Services (PCS) and Personal Care Services Plus. (If designed and implemented appropriately, such a system could ensure that adult care home patients actually receive the PCS that the facilities are being paid to provide to residents. If not, it would simply be another tool for cutting PCS or creating an additional income stream for facilities without increasing the level of service received by residents. The outcome from utilization management will depend on the amount of influence the long term care industry exerts over the final implementation.)

9. State/County Special Assistance monthly rates for adult care homes and special care units were increased and, hopefully, this will result in increased staffing levels and quality of care. (The increased state/county special assistance rate for these facilities will only be meaningful if the funds are used to increase staffing and quality of care rather than increasing the profits of the facility owners.)

10. Staff positions in the Division of Facility Services' Adult Care Home Licensure Section were increased, hopefully resulting in increased quality of care, safety, and other critical elements. (If these positions are used to weaken the county level inspection system so inspections are reduced to once or twice a year instead of occurring several times a year, the increased staff will not benefit residents.)

11. Staff positions in the Division of Facility Services' Complaint Intake Unit were increased. (Unless complaints are investigated in a more timely and aggressive manner, the expansion of this unit will not benefit consumers and will simply mean more bureaucratic red tape.)

NEUTRAL OUTCOMES

1. Attempts to reduce Medicaid by amending the current law regarding Medicaid Estate Recovery was delayed and, hopefully, pubic input will be actively solicited regarding modification of the law.

Attempts to reduce Medicaid expenditures by simply removing needy elderly, blind and disabled adults from the rolls were halted. (With the addition of hundreds of children to the Medicaid program and the “coming tide” of seniors who will need Medicaid, a more deliberate study of Medicaid expenditures needs to be made to ensure that those without a political voice do not become victims of public officials looking for the easy way out.)

NEGATIVE OUTCOMES/CONCERNS

1. Funding for the long term care system remains biased toward institutions, and the cuts in home care funds and services may force more individuals into institutional settings.

2. Unlicensed facility employees, called medication aides, will be allowed to administer medication to patients in nursing homes.

A Provider Tracking Database system was not funded. Instead, the Department of Health and Human Services was directed to develop a proposal for the planning, development, and implementation of a provider tracking database system. (Such a system would have provided consumers with information on the performance and quality of adult care homes statewide.)
Training for the Penalty Review Committee was not mandated.
A special provision, “Immunity for Reporting Abuse and Neglect,” was deleted from the budget. Had the special provision not been deleted, a new protection would have been added to the current law regarding immunity for reporting abuse and neglect. “An individual who witnessed or had knowledge of abuse, neglect or exploitation of a client of a residential facility would have had immunity when reporting the incident of abuse, neglect or exploitation to an authorized employee of the facility."

Recorded below is a summary of selected special provisions, studies, appropriation items and budget cuts that were enacted during the 2005 Legislative Session, and are relevant to long term care and adult services.

SELECTED SPECIAL PROVISIONS, STUDIES, APPROPRIATION ITEMS, AND BUDGET CUTS INCLUDED IN SB 622 -- 2005 APPROPRIATIONS ACT

I. SELECTED SPECIAL PROVISIONS (Note, the text of each provision is summarized. Check SB 622 for complete language.)

PLAN FOR STAR-RATING SYSTEM FOR ADULT CARE HOMES (Section 10.41) -- The special provision directs the Department of Health and Human Services to develop a plan for implementing a star-rating system for adult care homes to improve quality of care.

REGULATORY CHANGES TO IMPROVE QUALITY AND SAFETY IN HOME CARE SERVICES, MENTAL HEALTH FACILITIES, ADULT CARE HOMES, AND CERTAIN HOSPITAL FACILITIES (Section 10.40A.(a) -- This provisions incorporates many of the elements in SB 1074, and specifically contains the following:

Retention of the Penalty Review Committee; however, without any required training for committee members

Civil penalties for providing false information or omitting information on a licensure application

Increased penalties for violations in adult care facilities

Training for adult care home specialists and supervisors

Prohibiting home health agencies from employing people with criminal histories or a proven record of patient abuse or neglect

SPECIAL ASSISTANCE IN-HOME (Section 10.39 (a) -- The special provision makes two changes to the Special Assistance In-Home program. First, the number of individuals who can participate statewide has been increased from 800 to 1,000. Second, the payment was raised from 50% to 75% of the monthly payment the individual would have received if she/he were a resident of an adult care home and qualified for Special Assistance.

PROVIDER TRACKING DATABASE SYSTEM (Section 10.10 A.) -- The special provision directs the Department of Health and Human Services (DHHS) to develop a proposal for the planning, development, and implementation of a provider tracking database system. DHHS must submit the proposal and other required documentation to the Office of State Budget and Management and to the Office of Information Technology Services for review and approval. If approved, DHHS then must submit the proposal and documentation to the General Assembly for review no later than May 1, 2006. The General Assembly will determine whether and to what extent funds should be appropriated to implement the system.

MEDICAID PERSONAL CARE SERVICES (Section 10.19. (a) -- The special provision directs the Department of Health and Human Services to reduce the cost of providing personal care services under the Medicaid program. Starting October 1, 2005, the reduction will be accomplished by implementing a utilization management system for Personal Care Services and Personal Care Services Plus and may include reducing personal care services to 50 hours. (For actual amount of yearly cuts, note listing under section titled: “III. Appropriation Items and Budget Cuts.”)

MEDICAID ESTATE RECOVERY (Section 10.21C. (a) -- The special provision amends current law and would allow the Department of Health and Human Services to impose liens against real property, including the home, of a recipient of medical assistance. (Under the proposed change, the state would be able to place liens on homes valued at as little as $30,000 – an amount that will clearly impact only persons of very modest means.

Effective date of the Medicaid Estate Recovery provision delayed – Language was inserted in HB 320: Modify 2005 Appropriations Act (Commonly referred to as the “budget technical corrections bill”), to change the effective date from January 1, 2006, to July 1, 2006. (The delay will allow more evaluation and the crafting of more appropriate language to allow the state to accomplish its intended goals while minimizing the impact on individuals with limited financial resources.)

USE OF MEDICATION AIDES TO PERFORM TECHNICAL ASPECTS OF MEDICATION ADMINISTRATION IN SKILLED NURSING FACILITIES (Section 10.40C.(a) -- The special provision amends current law and allows medication aides to perform the technical aspects of medication administration in skilled nursing facilities.

EXPAND COMMUNITY CARE OF NORTH CAROLINA MANAGEMENT TO ADDITIONAL MEDICAID RECIPIENTS (Section 10.17.(a) -- The special provision directs the Department of Health and Human Services to expand the scope of the Community Care of North Carolina case management model to recipients of Medicaid and dually eligible individuals with chronic condition and long-term care needs. In expanding the scope, DHHS must focus on the Aged, Blind, and Disabled, and CAP-DA populations for improvement in management, cost-effectiveness, and local coordination of services through Community Care of NC and in collaboration with local providers of care. There are specific services DHHS is directed to target.

VERIFICATION OF STATE RESIDENCY FOR MEDICAL ASSISTANCE (Section 10.21A. (a) -- The special provision amends current law and would require an applicant for medical assistance benefits to provide satisfactory proof that she/he is a resident of North Carolina and is not maintaining a temporary residence or abode incident to receiving medical assistance.

II. SELECTED STUDIES

MEDICAID STUDY (Section 10.21E.) -- The special provision directs the Department of Health and Human Services to study Medicaid services for individuals who are dually eligible for Medicaid and Medicare, particularly including the Medicare Part D impact on these services, the financial impact on the State of Medicare clawback provisions, and efficiencies that can be realized in services for this dually eligible population. The study shall also include the impact on the Medicaid program as a whole. Results of the study are to be reported to the General Assembly not later than May 1, 2006.

DHHS AND COMMUNITY COLLEGES STUDY USE OF MEDICATION AIDES TO PERFORM TECHNICAL ASPECTS OF MEDICATION ADMINISTRATION (Section 10.40D.(a) - (f) -- The special provision directs the Secretary of the Department of Health and Human Services and the President of the Community College System to jointly convene a study group to review and consider the use of medication aides to perform the technical aspects of medication administration and the following are required to be addressed: (1) Training and competency evaluation of medication aides; (2) Training standards; (3) Ongoing review and evaluation of medication aide training; and (4) Requirements for supervision of medication aides. It also requires a report on the progress and recommendations of the study group be made to the 2006 and the 2007 General Assembly. Recommendations may include proposed legislation. It directs the Department of Health and Human Services to continue its pilot program on the use of medication aides and to report on the status of the pilot programs at the same time the study group reports to the General Assembly. In addition, the provision amends current law and gives local boards of education discretion to adopt policies and procedures authorizing schools that operate programs under G.S. 115C‑307(c) to utilize unlicensed health care personnel to perform the technical aspects of medication administration to students.

III. SELECTED APPROPRIATION ITEMS AND BUDGET CUTS (The figures recorded below can be found in the money report to SB 622).

Personal Care Services

Personal Care Services Utilization Management

($13,711,542) R FY 2005-06 and ($16, 115,389) R FY 2006-07

Reduces funding for Personal Care Services by directing the Division of Medical Assistance to develop a utilization management system for personal care services and Personal Care Services-Plus.

ACH Personal Care Services for Residents of Special Care Units

$1,744,186 R FY 2006-07

Provides funding to increase the number of hours of Adult Care Home Personal Care Services for residents of Special Care Units from 1.1 hours per day to 4.07 hours per day beginning October 1, 2006.

State & County Special Assistance

State/County Special Assistance

($977,007) R FY 2005-06 and ($1,332,626) R FY 2006-07

Reduces excess funding in continuation budget

State/County Special Assistance Rate Adjustment

$2,700,000 R FY 2005-06 and $3,100,000 R FY 2006-07

Provides state funds for an increase in the State/County Special Assistance monthly rate from $1,084 per month to $1,124 per month effective October 1, 2005. The total requirement for the increase is $5,400,000 in SFY 2005-06 and $6,200,000 in SFY 2006-07, with the state funding 50% and counties funding the remaining 50%. (The rate increase in the final budget was less than that which was proposed by the Health and Human Services conferees.)

Increase Special Assistance Rate for Residents of Special Care Units

$285,632 R FY 2005-06 and $380,843 R FY 2006-07

Provides funding for an increase in the Special Assistance rate for residents of Special Care Units from $1,084 per month to $1,515 beginning October 1, 2005.

Inspections and Licensure

Adult Care Licensure and Inspections

$1,006,927 R FY 2005-06 and $2,080,955 R FY 2006-07

$48,300 NR FY 2005-06 and $25,000 NR FY 2006-07

Expands the Division of Facility Services' Adult Care Home Licensure Section by 14 positions in the first year and an additional 17 positions in the second year. Additional staff will allow annual inspections of adult care homes. Two additional regional offices will be created. (The funding in the second year is greater than that which was proposed by the Health and Human Services conferees.)

Home Care Agency Licensure and Inspections

$218,495 R FY 2005-06 and $218,495 R FY 2006-07

$5,469 NR FY 2005-06

Expands the Division of Facility Services' Licensure and Certification Section by 5 positions. Additional staff will allow for inspections and monitoring of non-Medicare licensed home care agencies on the same inspection schedule as Medicare certified agencies (every 36 months).

Construction Inspections

$656,413 R FY 2005-06 and $1,166,709 R FY 2006-07

$33,600 NR FY 2005-06 $10,200 NR FY 2006-07

Expands the Division of Facility Services' Construction Section by 9 positions in the first year and an additional 7 positions in the second year. Additional staff will allow physical plant and life-safety inspections of adult care homes and 24-hour residential facilities for the mentally ill, developmentally disabled, and substance abuse populations every two years. Also allows for a faster initial regulatory compliance review time.

Complaint Intake --

$133,487 R FY 2005-06 and $133,487 R FY 2006-07

$372,722 NR FY 2005-06

Expands the Division of Facility Services' Complaint Intake Unit by 3.5 positions. This expansion will provide the staff necessary to respond to anticipated increase in complaint call volume as the DFS toll-free complaint number will now be posted in all residential facilities monitored by DFS. This expansion will also support a new automated call directory system.

Licensure and Inspections Fees

($1,800,000) R FY 2005-06 and ($1,800,000) R FY 2006-07

Doubles all existing licensure and inspection fees for health care facilities (excluding Hospice and Emergency Medical Services.)

Medicaid

Freeze Medicaid Rates

($62,491,547) R FY 2005-06 and ($137,055,611) R FY 2006-07

Freezes rates for SFY 2005-2006 for most Medicaid providers at the level authorized for SFY 2004-2005. The rate freeze applies to all Medicaid private and public providers with the following exceptions: federally qualified health clinics, rural health centers, state institutions, outpatient hospitals, pharmacy and the noninflationary components of the case-mix reimbursement system for nursing facilities, inflationary increases for Medicaid providers paying provider fees (private ICF-MRCs and nursing facilities can occur if the state and county share of the increases can be funded with provider fees.)

Drug Utilization Management Plan

($2,749,963) R FY 2005-06 and ($6,788,009) R FY 2006-07

Expand drug utilization management measures intended to contain the cost of Medicaid prescription drug expenditures.

(Note: In another section of the budget, $10,000,000 in non-recurring funds is provided to the Health and Wellness Trust Fund for the purpose of operating the Senior Cares prescription drug program until January 1, 2006, when the federal Medicare Part D prescription drug benefit becomes available.)

Medicaid Reserve Fund

($50,000,000) NR FY 2005-06 and ($50,000,000) NR FY 2006-07

Transfers funding from the G.S. 143-23.2 reserve to support current services and reduces state appropriations.

Increase Rates for Dental Services

$2,000,000 R FY 2005-06 and $2,000,000 R FY 2006-07

Provides funding to increase Medicaid rates for dental services.

IV. APPROPRIATION ITEMS IN SELECTED BLOCK GRANTS (The figures recorded below can be found on pages 9-10 of SB 622).

Social Services Block Grant

Allocation for In-home Services Provided by County Departments of Social Services $2,101,113 NR FY 2005-06

Adult Day Care Services $2,115,301 NR FY 2005-06

Division of Aging and Adult services – Home and Community Care Block Grant

$1,834,077 NR FY 2005-06

Division of Facility Services Adult Licensure Program $ 411,897 NR FY 2005-06

Division of Facility Services $ 37, 204 NR FY 2005-06

Department of Administration for the NC State Commission on Indian Affairs In-Home Program for the Elderly $203,198 NR FY 2005-06

LEGEND: R= Recurring funds NR=Non recurring funds FY or SFY= Fiscal Year/State Fiscal Year

(Numbers) in parentheses represent a reduction in appropriation.