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NC will get $1 billion Medicaid expansion 'bonus,' but there's disagreement on how to spend it

NC Legislative Building
Dave DeWitt
/
WUNC
Budget writers at the state legislature are working out a plan for spending $1 billion in federal funding the state will receive for expanding Medicaid. The House wants to devote the money exclusively toward mental health.

The decision by North Carolina lawmakers to expand Medicaid will come with a billion dollars of new federal funds for the state. But the House and Senate disagree on how to spend the money.

The billion-dollar allocation from the federal government is called a “signing bonus” for expanding the government health care program to hundreds of thousands of people. It’s an incentive from Washington to convince more states to expand Medicaid.

Gov. Roy Cooper and leading House Republicans think the billion dollars should be used to fix the state’s troubled mental healthcare system. Supporters of the plan, including Ashish George with the National Alliance on Mental Illness, say the federal money creates a rare opportunity.

"I think it's the best shot we've had in many, many years," George said.

A state House bill calls for about a quarter of the money to go toward increasing Medicaid reimbursement rates to mental health providers.

Health and Human Services Secretary Kody Kinsley says the current reimbursement rates are too low, and that makes it hard to keep enough mental health professionals in North Carolina.

"If you can't get an increased rate, or if you can't get a rate that will sustain your business, you won't stay in business in any place," Kinsley said. "This is really stark, and I want to make this clear: Medicaid has not increased its behavioral health rates since 2012."

The House plan also includes $50 million to help mental health practitioners pay back student loans. And it would fund a variety of new mental health care facilities.

Rep. Donny Lambeth, R-Forsyth, developed the House plan. He says hundreds of patients are stuck daily in emergency rooms waiting for treatment beds to come available at mental health facilities.

"We have a once-in-a-generation opportunity to strengthen our care," Lambeth said. "Thus, the focus will be on opening more care options, providing incentives to staff more beds."

Senate leaders want to spend 'bonus' on new children's hospital, health sciences training

But Senate leaders want to take a different approach to spending the billion-dollar fund. Their budget directs the money to a wider variety of health care projects, including new hospital construction and new health sciences training facilities at community colleges and universities.

The WUNC Politics Podcast is a free-flowing discussion of what we're hearing in the back hallways of the General Assembly and on the campaign trail across North Carolina.

Senate leader Phil Berger says he recognizes the state’s mental health crisis, but he’s not sure a one-time infusion of money can fix it.

"There is some concern as to whether or not just throwing a lot of money at a particular problem is actually going to move the needle that much, and maybe if there are other things in the health space that we can actually have some impact on with some of those dollars, it’s probably better to do that," Berger said.

The biggest project in the Senate’s proposal is a hundred million dollars for a new UNC children’s hospital, which will include a mental health component.

Sen. Ralph Hise, R-Mitchell, says the children’s hospital is in need of an expansion.

"A lot of young kids are having to travel to Atlanta and Pennsylvania to get high-end children’s services and we hope to be able to offer that here," he said.

The Senate plan also includes $40 million in incentives to entice more health care providers to locate in rural areas of the state. And it includes funding to help keep rural hospitals from closing.

Senators also want to build new community college health sciences buildings in smaller counties like Caldwell, Robeson and Pamlico. The goal is to train more health care providers in those areas.

Working on a compromise

Budget writers from the House and the Senate are now working to negotiate a compromise plan for the final budget. Kinsley says he’s hearing support from both chambers for mental health, but there’s disagreement on whether to use the Medicaid expansion money or other funding sources. He argues that while the backlog of mental health needs looks costly, it can ultimately save the state money.

"What I try to remind folks is that, you know, when you spend money on behavioral health, you drive down costs in the short and long term in a number of other buckets, right?" Kinsley said. "You drive down costs in incarceration costs and jail-based costs, you drive down costs for physical health controls. We know that people that have their behavioral health issues managed, their costs for diabetes and other chronic diseases decrease. You drive down costs around homelessness and other social services."

Kinsley added: "Investing in behavioral health is not just about finding more money to spend, it is about spending that money first, because the payoff is huge in a number of other places."

The final budget agreement will likely be released in the coming weeks.

Colin Campbell covers politics for WUNC as the station's capitol bureau chief.