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Public Policy Update - August 2021



The House released their budget this week and is expected to finish voting on the budget later in the week. The House proposal keeps overall spending in line with the version of the budget the Senate passed in June but makes a variety of changes, including how much to cut taxes and how much to pay workers.

Once the House budget is officially approved, a Conference Committee with leaders from the Senate and House will meet to address differences in the two budgets and come to an agreement on the final budget.

Below are a few highlights from the House budget:

  • Innovations Waiver Slots: The House, in agreement with the Senate, adds 1,000 slots for people with disabilities to receive enhanced community services under the Innovations Waiver. Since this part of the budget is the same for both the House and Senate budgets, the number of slots will not change when the Senate and House meet to resolve the differences in their budgets. 

There are over 15,000 people on the waiting list, and about 750 people are added each year.  There is a need for more than 1,000 slots.

  • HCBS Fund: The House budget creates the Home and Community Based Services Fund, which will be funded with state savings that result from the increases in the federal match that was part of the American Rescue Plan. The plan is to transfer money the state will not need to spend out of the General Fund into the new HCBS Fund.  These dollars may then be used to strengthen community services through increasing waiver slots, increasing direct care wages and increasing private duty nursing. 

This may be a way to create additional innovation slots. 

  • Direct Care Worker Wages: Like the Senate budget, the House budget includes increasing rates to ICFs (Intermediate Care Facilities) for direct support care workers (DSPs). The House also includes increased rates for home and community based service providers to increase wages for direct care workers who work in the community.

It is good to see the increases in wages cover a broader group of DSPs  -- not just those in ICF settings. 

  • Group Home Stabilization and Transition Initiative: This part of the House budget directs the state to establish new rate models and methods to adequately support residential support needs.
  • Increase Funding for Traumatic Brain Injury Services:  These additional funds would be used to provide residential services, transportation, respite services, and home modifications.  

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 a Local Management Entity/Managed Care Organization (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/MCOs 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.  There was an announcement about which LME/MCOs will be given contracts.

The selection process resulted in all seven of the existing LME/MCOs being chosen to contract to serve as regional Behavioral Health I/DD Tailored Plans:

  • Alliance Health
  • Eastpointe
  • Partners Health Management
  • Sandhills Center
  • Trillium Health Resources
  • Vaya Health
  • Cardinal Innovations Healthcare*

*While Cardinal Innovation Healthcare was awarded a contract, it is anticipated they will not operate a Behavioral Health I/DD Tailored Plan at launch due to the consolidation with Vaya Health. 

Given additional county requests for disengagement from Cardinal, it is expected that the geographic areas for Behavioral Health I/DD Tailored Plans will be significantly different at launch. 

Only entities operating as LME/MCOs were eligible to apply to become Behavioral Health I/DD Tailored Plans. The first Behavioral Health I/DD Tailored Plans contract term will last four years. 

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. 


Fiscal Year 2022 

On July 29, the House passed H.R. 4502, the "minibus" Fiscal Year 2022 (FY 22) appropriation package to fund the Departments of Labor, Health and Human Services, Education, Agriculture, Energy, Interior, Veterans Affairs, Transportation, and Housing and Urban Development, as well as agencies pertaining to rural development, water development, financial services, general government, the environment and military construction. The Senate has not yet acted on FY 22 funding.

Bipartisan Infrastructure

The Senate on Tuesday, August 10, passed the long-anticipated bipartisan infrastructure bill. After several weeks of arduous negotiations between the parties, the final 69-30 vote was definitive, with 19 Republican senators joining their Democratic colleagues in support of the package. It now heads to the House, where Democrats have the votes to pass it quickly. The legislation will cost around $1.2 trillion over eight years, about $550 billion of which is new federal spending, including major priorities for the disability community: 

  •   $39 billion to modernize public transit, upgrade aging infrastructure & make stations accessible. 
  •   $65 billion to ensure access to high-speed internet for all.

Budget Reconciliation

Work continues on the budget reconciliation package that will be used to pass many parts of President Joe Biden's Jobs and Family Plan. 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.

Less than 24 hours after the Senate approved a bipartisan $1 trillion infrastructure package, 69-30, senators adopted a $3.5 trillion budget blueprint on a 50-49 party-line vote early Wednesday morning, August 11. Lawmakers will now have to write the legislation on items such as expanding Medicare, providing free community college, paid family leave, fighting climate change, and other priorities of President Biden's agenda. Wednesday's vote unlocks the budget reconciliation process that will allow Senate Democrats to pass their package with no Republican votes, but both bills still have to pass in the House.

This legislation includes language around the investment into Home and Community Based Services (HCBS) that will be a part of the Budget Reconciliation process. This funding ($400 billion) in home and community-based services would increase funding to states and create more opportunities for people with intellectual and other developmental disabilities (I/DD) to receive the supports they need to live in the community.


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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