By Michael Abramowitz
August 1, 2014
Officials at East Carolina University responded favorably to initial reports about the new budget agreement proposed this week by the state Legislature, despite included cuts in Medicaid provider reimbursement.
Phyllis Horns, vice chancellor for Health Sciences at East Carolina University, issued a statement Thursday about the potential effect of the proposal on the Brody School of Medicine.
“Based on our preliminary analysis, the legislature heard and responded positively to our concerns on specific critical legislation affecting Brody,” Horns said. “The budget reinstates, in part, the ability of our clinical practice to collect debt through the Set-Off Debt Collection Act (SODCA) and provides additional access to federal Medicaid funding by making adjustments to the Upper Payment Limits (UPL) to providers. Also critical is the fact the proposed budget did not assess a tax on UPL funds we receive.”
North Carolina House and Senate Republicans unveiled the details of the $21.25 billion budget Tuesday. The plan cuts Medicaid reimbursement for health care providers by 1 percent.
House Speaker Thom Tillis and Senate leader Phil Berger added details to the compromise budget plan and said votes are expected by week’s end. The compromise comes after weeks of impasse, and prodding from Gov. Pat McCrory to draft a budget that avoids big cuts to Medicaid.
ECU officials will continue to review the budget, Horns said, including changes that potentially affect their partners at Vidant, before they can determine the specific outlook for Brody.
The budget legislation would not change Medicaid eligibility. The Senate had proposed eliminating Medicaid eligibility for more than 15,000 people. The program serves poor people and people with disabilities.
The state spends $3.5 billion annually to treat 1.7 million Medicaid recipients. Efforts to revamp the program to hold down costs were removed from the budget to be tackled later.
The budget also puts $186 million into a reserve for Medicaid cost increases and includes $700 million in a savings reserve to cope with a program that has overruns for several years, Tillis said.
“We’re seeing lower and lower shortfalls, but we have to be prepared for that so the promises we’re making in this budget continue to be fulfilled,” Tillis said.
The N.C. Hospital Association issued a statement Thursday, pointing out that the proposed budget cuts more than $45 million to hospitals, on top of last year’s nearly $93 million in cuts.
When added to other cuts that took effect last year, the total reductions to hospitals in the two-year period exceeds $200 million, more than a 15 percent reduction, association officials said.
“This budget again disproportionately targets hospitals for Medicaid cuts and will require hospitals to reprioritize spending mid-year, potentially eliminating even more services and jobs in our communities,” association vice president Julie Henry said.
McCrory spokesman, Josh Ellis, said in a statement, “there are several major issues that are being worked on, including Medicaid eligibility, to hopefully avoid a veto.”
The compromise budget plan will require up-or-down votes from lawmakers, without changes. The new fiscal year began on July 1.