Legislators, DHHS plan ahead of Medicaid cutoff deadline

Posted April 4, 2012

— Legislative leaders worried about a Medicaid funding deadline have called state Department of Health and Human Service officials to explain Wednesday how they plan to meet a May 1 deadline to change how the state handles "personal care services" for those who have trouble bathing, cooking or performing other daily tasks.

North Carolina stands to lose $414 million in federal funding due to conflicts between how state and federal rules say personal care service dollars should be spent. Al Delia, acting secretary of the Department of Health and Human Services, says the state is ready not only to meet the end-of-the-month deadline but is closing in on a solution that would fix this long-running problem for good.

Lawmakers and representatives of the adult care industry are less sanguine.

"It's a serious issue, and it's kind of late in the game for the legislature to be getting some information on it," said Sen. Pete Brunstetter, a Winston-Salem Republican and lead budget writer in the Senate.

Lou Wilson, a lobbyist for the North Carolina Association of Long Term Care Facilities, says the state has been struggling to meet the concerns raised by federal regulators since 2006. Her group has been saying publicly that 30,000 people could be "put out on the street" if there is not a meeting of the minds between Washington and Raleigh.

"Nobody has told us how they're going to work it out," Wilson said. "We wonder what's going to happen to all these people."

While the potential problem is a big one, Delia said before the meeting that the discussion of the issue had become overly heated.

"The notion that the state doesn't have a plan to deal with this is, on its face, inaccurate," he said.

Update (April 4, 2012; 9:31 a.m.): Federal regulators given tentative approval the state's plans to fix problems with personal care services and given the state until the end of the year to make changes. Click here to read that notice from the Centers for Medicare and Medicaid Services.

A complicated problem

Medicaid is a program jointly funded by the federal government and the state. It takes care of those too poor and too sick to care for themselves.

To understand this current problem, it's helpful to go back to 2006 when the state asked federal Medicaid officials for permission to change how hospice services were handled.

At that time, federal regulators raised concerns about differences in how the state provided personal care services for those able to stay in their own homes versus those who were in an institutional setting like adult care homes and assisted living facilities. Federal regulations call for those services to be the same regardless of where the patient receives help.

That sparked a years-long discussion in which state and federal regulators traded potential fixes but did not close in on a solution.

Then in 2009 and 2010, state regulators found millions of dollars worth of abuse in the personal care services program. Companies were billing for care that was either unneeded or never performed. That prompted the General Assembly to change the criteria patients had to meet before they could be eligible for those services.

In addition to fighting fraud in the program, those changes exacerbated differences between how personal care services were delivered in home settings and in assisted living homes. And those changes gave federal regulators with the Centers for Medicare & Medicaid Services (CMS) more leverage to demand that North Carolina make rules for providing personal care services in at-home and institutional settings equal.

In 2011, the U.S. Department of Justice raised a different set of questions. Federal case law says the state should provide the "least restrictive" setting for patients receiving federally-funded care. But the differences in how North Carolina has funded personal care services favored more restrictive institutional settings, the Justice Department alleged. Unless the state changed, the federal government would sue the state to make changes.

Some time later, CMS regulators threatened to cut off funding to all those who received personal care services.

"We, as a state, find ourselves between a CMS rock and a Department of Justice hard place," Delia said.

However, many of the problems raised by the Justice Department and CMS can be met by the same set of solutions, he said.

Delia and other Health and Human Service administrators planned to tell lawmakers Wednesday that the federal government has agreed to give the state until the end of the year to put a new plan in place for handling personal care services.

That plan will include changing eligibility rules for anyone receiving personal care no matter the setting. The state will ease the rules for those looking for help staying in their own homes but increase the number of problems someone would have to have in order to be eligible for placement in a long-term care home.

Health and Human Service officials say that overall, more people will end up getting served. However, some 4,000 people who now receive services in long-term care facilities will have to find alternative arrangements.

While that's well short of the tens of thousands of people who would be affected if the federal government cut off Medicaid funding, assisted living homes say they're still worried the changes could end up putting people out of work and some residents on the street. Delia said the new rules would allow homes to take in a comparable number of newly eligible clients. And DHHS officials say they're confident they can find alternative care for those patients who will have to transition out of group homes and back into their communities.

Delia has already provided some of this information in writing to the committee when he responded to a letter from House Speaker Thom Tillis and Senate President Pro Tempore Phil Berger. That letter discusses the CMS issue as well as the impact of a civil lawsuit brought by personal care service recipients against the state. You can click here to read that exchange.


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  • piene2 Apr 9, 2012

    "You said it newlifetupper! I agree 100% with you. If you have family members they should have to take care of you!

    Yes indeed. I asked my Aunt Martha to do my open heart surgery but she couldn't find a sharp steak knife.

  • TriangleMommy Apr 4, 2012

    Those of you complaining about "handouts" know nothing of how this system works. The point of this system is to allow otherwise disabled people stay in their own home environment and receive the natural supports they need to stay there. This can be anything from helping them with dressing, bathing and eating skills to going out and about in the community. Families can not do it all. These are SUPPORTS. They are not designed to replace what a family can and does do. Often times family is overwhelmed doing these things day in and day out (take it from a mother who lives this life). Having someone come in for a few hours a day to help out can be a life saver. Also, not all families get the same amount of supports.

  • fayncmike Apr 4, 2012

    The cuts are just plain wrong and should be rescinded.

  • bill0 Apr 4, 2012

    "Part of the problem, is families are getting PAID to take care of their OWN. "

    Huh? No they aren't. Home care doesn't mean they pay you for staying home. It means that a qualified medical professional comes to your house certain items instead of you having to live in a nursing home 24/7.

  • muggs Apr 4, 2012

    It was a good idea until we allowed so many to use it as a insurance policy for just about everything under the sun,and we just about let anyone enter the program without being scrutinized by the government officials running these programs,having a wife in the medical field and waiting in the parking lot at night to pick her up I see families of Hispanics pull up with their multiple children getting out of vehicles that are quite exspensive yet they are getting treatment for next to nothing as it can be well documented if looked into,any care giver could verify this but are not supposed to speak of it,this alone puts a strain on the funding and only deprives the rightful recipients of care.

  • piene2 Apr 4, 2012

    I am expecting a twelfth hour rollback of the Medicaid cuts just as the doctors cuts were rolled back at the last moment.

  • pedsrndad Apr 4, 2012

    One thing the government could do is cut the massive fraud and misuse of the Medicaid system in general from illegals and the "entitled" that use ER's as 24/7 free clinics at no cost to themselves for bumps, bruises, stuffy noses etc. I don't mean to disparage those that deserve and truly need the provided services, just the ones that game the system.

  • storchheim Apr 4, 2012

    Let's see: the fight has been going on for 6 years; they discovered massive fraud in 09 and 10; and now one of their two worries is that some people will be out of work?

    Just how corrupt is this group, anyway?

    Sometimes people want to disband Medicaid and other programs not because they don't care if people suffer, but because of the limitless capacity to steal on the part of the bureaucrats in charge. We should all take care of each other - no money goes to the underserving, the recips have to look you in the eye and it's much harder to commit fraud against an individual than a faceless govt entity (at least for decent people), and not a penny goes to the govt to "administer" the help.

  • storchheim Apr 4, 2012

    Agree with newlifetupper too, but as the Farmville (increased) reward story shows, some people will only do the right thing if they get cash.

  • Weetie Apr 4, 2012

    You said it newlifetupper! I agree 100% with you. If you have family members they should have to take care of you! Stop depending on the Government for everything!