GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1993

H	1 

HOUSE BILL 370

Short Title:  GPAC/Restructuring DHR Program Delivery.   	(Public)
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Sponsors: (by request) Representatives Robinson, Blue, Barnes, Diamont, Hackney, Hensley, H. Hunter, G. Miller, and Nesbitt.
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Referred to:  Appropriations.
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February 25, 1993

A BILL TO BE ENTITLED
AN ACT TO IMPLEMENT A RECOMMENDATION OF THE GOVERNMENT PERFORMANCE AUDIT COMMITTEE TO RESTRUCTURE DEPARTMENT OF HUMAN RESOURCES PROGRAM DELIVERY.
The General Assembly of North Carolina enacts:
––-NEW DOWNSIZED MH INSTITUTIONS PLAN.
Section 1.  (a)	The Department of Human Resources shall develop a 10-year plan to construct four new and efficient mental health hospitals to accommodate the downsizing in the mental health institutions.  This plan shall include consideration of the following:
(1)	After phasing down inpatient mental health services, construction on a 200-bed hospital in the east;
(2)	As more clients are treated in the community-based programs, closing hospitals;
(3)	With funds saved from downsizing and eliminating State hospitals, building smaller more modern hospitals in years 2, 5, 7, and 9 of the ten-year plan; and
(4)	At the end of the 10 years, hiring a private nonprofit entity to operate the four newly constructed mental health hospitals.
This plan shall be submitted to the General Assembly by September 2, 1993.
(b)	There is appropriated from the General Fund to the Department of Human Resources, the sum of three million seven hundred thousand dollars ($3,700,000) for the 1993-94 fiscal year and the sum of three million seven hundred thousand dollars ($3,700,000) for the 1994-95 fiscal year, to implement this section.
	(c)	It is the intent of the General Assembly to appropriate additional funds to the Department of Human Resources, in subsequent fiscal years, to implement this act, according to the following schedule:
Fiscal Year	  Amount
1995-96	$3,700,000
1996-97	$10,400,000
1997-98	$17,100,000
1998-99	$23,700,000
1999-00	$17,100,000
2000-01	$23,800,000
2001-02	$17,000,000.
(d)	The base budget of the Department of Human Resources is reduced by twelve million two hundred thousand dollars ($12,200,000) in the 1993-94 fiscal year and by twenty-four million four hundred thousand dollars ($24,400,000) for the 1994-95 fiscal year due to the savings resulting from the implementation of this section.
(e)  It is the intent of the General Assembly to reduce the base budget of the Department of Human Resources in subsequent fiscal years due to the implementation of this act, according to the following schedule:

Fiscal year	  Amount
1995-96	$12,100,000
1996-97	$24,300,000
1997-98	$12,200,000
1998-99	$24,400,000
1999-00	$12,100,000
2000-01	$24,300,000
2001-02	$12,200,000.
(f)  This section becomes effective July 1, 1993.
––-MH/CB INITIATIVES.
Sec. 2.  (a)	Effective July 1, 1993, the Department of Human Resources shall begin expanding community-based services and downsizing institutional services for the mentally ill.  In order to accomplish this goal, the Department shall develop and implement a multiyear pilot program to implement a single stream of funding system for the State's mental hospitals.  The program shall include a gradual transfer of funds from the mental hospitals to the community area mental health authorities concomitant with the transfer to the area authorities of the responsibility of providing appropriate services to those persons in need of hospitalization and the implementation of a single portal of entry State policy for all admissions to the mental hospitals.  The pilot program shall provide technical assistance to area authorities to prepare them for the implementation of the single stream of funding system.
(b)	For each fiscal year of the 1993-95 fiscal biennium, three million seven hundred thousand dollars ($3,700,000) shall be transferred from the continuation budget of the mental hospitals to community area mental health authorities to expand community-based mental health services during the multiyear pilot programs's existence.
(c)	It is the intent of the General Assembly to continue to transfer three million seven hundred thousand dollars ($3,700,000) from the continuation budget of the mental hospitals to community area mental health authorities in each remaining fiscal year of the multiyear pilot program's existence.
(d)	This section becomes effective July 1, 1993.
––-MRC DOWNSIZING.
Sec. 3.  (a)	The General Assembly finds that North Carolina currently offers residential services for the developmentally disabled population and that residential programs are the most costly and most restrictive methods of caring for this population.  The General Assembly further finds that persons with developmental disabilities can be served far more effectively through a broad array of residential and nonresidential services.  Therefore, the General Assembly establishes a clear commitment to increase the use of community-based programs to serve the developmentally disabled, and to downsize State-operated mental retardation centers.
(b)	This section is effective upon ratification.
––-MRC REDUCTION.
Sec. 4.  (a)	The Department of Human Resources shall develop a plan to reduce the total number of people served in State-operated Mental Retardation Centers by 500 people by the end of 1994 and 100 per year afterwards.  In developing this plan, the Department shall consider:
(1)	An immediate moratorium on new admissions of school age children and youth to mental retardation centers;
(2)	A fifty percent (50%) reduction of all new admissions in 1993;
(3)	A moratorium on all new admissions in 1994;
(4)	Increased development of community placement slots for school age children and adults;
(5)	Establishment of 100 new community-based respite care slots per year;
(6)	Closing of Black Mountain Center by 1995; 
(7)	Development of a comprehensive quality assurance plan for community services; and
(8)	Any other issues it considers necessary.
(b)	There is appropriated from the General Fund to the Department of Human Resources, the sum of fourteen million dollars ($14,000,000) for the 1993-94 fiscal year and the sum of twenty-six million six hundred thousand dollars ($26,600,000) for the 1994-95 fiscal year, to implement this section.
(c)	It is the intent of the General Assembly to appropriate additional funds to the Department of Human Resources, in subsequent fiscal years, to implement this act, according to the following schedule:

Fiscal Year	Amount
1995-96	$9,300,000
1996-97	$18,600,000
1997-98	$7,700,000
1998-99	$17,000,000
1999-00	$9,400,000
2000-01	$18,700,000
2001-02	$9,300,000.

(d)	The base budget of the Department of Human Resources is reduced by twenty-three million nine hundred thousand dollars ($23,900,000) for the 1993-94 fiscal year and by thirty-seven million four hundred thousand dollars ($37,400,000) for the 1994-95 fiscal year due to the implementation of this section.
(e)  It is the intent of the General Assembly to reduce the base budget of the Department of Human Resources in subsequent fiscal years due to the implementation of this act, according to the following schedule:

Fiscal Year	Amount
1995-96	$10,300,000
1996-97	$20,700,000
1997-98	$9,000,000
1998-99	$19,300,000
1999-00	$10,400,000
2000-01	$20,700,000
2001-02	$10,400,000.

(f)  This section becomes effective July 1, 1993.
––-DD NEEDS ASSESSMENT.
Sec. 5.  (a)	The Department of Human Resources shall develop a comprehensive assessment of service and program needs for all people with developmental disabilities.  This needs assessment shall be preceded by the use of an effective data collection system.  The needs assessment shall include:
(1)	Consideration of individuals who are unserved and underserved;
(2)	Establishment of a statewide automated tracking system for all people with disabilities; and
(3)	Evaluation of the needs of people with developmental disabilities living in domiciliary care facilities.
(b)	The Department shall report the needs assessment to the appropriate House and Senate Appropriations subcommittees of the 1993 General Assembly by May 1, 1994.
(c)	This section becomes effective July 1, 1993.
––-PRIVATE ICF/MR STANDARDS.
Sec. 6.  (a)	The General Assembly finds that public policy for residential services for people with disabilities has experienced change of nearly revolutionary proportions during the period from 1970 through 1990 and that services have gone from a system of almost exclusive institutional care to a broad array of service options.  The General Assembly further finds that, unless North Carolina changes its current practices, the future of costs and programmatic implications for services are sadly predictable.  Therefore, the General Assembly intends to establish a policy whereby people with developmental disabilities will be more effectively served through use of a broad array of residential and nonresidential services.
(b)	The Department of Human Resources shall develop directly or contract for the development of reimbursement rates and payment standards for privately operated intermediate care facilities for the mentally retarded, which shall include:
(1)	" Quality of Service" incentive payments and assessments;
(2)	Specific allowable costs within each cost center;
(3)	Limits and guidelines for rents and capital costs;
(4)	Specific standards for determining active treatment costs;
(5)	Special adjustments and exceptions;
(6)	Allowable profit margins; and
(7)	A reimbursement policy for training and technical assistance.
(c)	The Department of Human Resources shall present to the General Assembly the developments required by Section 1 of this act, together with the complete plan and implementation schedule to address the escalating use and costs of intermediate care facilities for the mentally retarded/developmentally disabled community facilities required by Section 135 of Chapter 900 of the 1991 Session Laws, by March 1, 1993.
(d)	This section is effective upon ratification.
––-ADATC SINGLE-STREAM FUND PILOT.
Sec. 7.  (a)	The Department of Human Resources shall develop a multiyear pilot program to implement a single stream of funding system for the State's Alcohol Drug Abuse Treatment Centers (ADATC's).  The program shall include a gradual transfer of funds from the ADATC's to the community area mental health authorities concomitant with the transfer to the area authorities of the responsibility of providing appropriate services to those persons in need of residential alcohol/drug abuse treatment services and the implementation of a single portal of entry State policy for all admissions to the ADATC's.  The pilot program shall provide technical assistance to area authorities to prepare them for the implementation of the single stream of funding system.
(b)	Of the funds appropriated in the 1993-94 fiscal year and the 1994-95 fiscal year to the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services for Alcohol Drug Abuse Treatment Centers (ADATC's), fourteen percent (14%), or one million four hundred fifty-four thousand two hundred ninety-nine dollars ($1,454,299), are transferred each fiscal year to area mental health authorities, to implement the pilot project established by this section.
(c)	It is the intent of the General Assembly to transfer from the funds appropriated to the Division of Mental Health, Mental Retardation, and Substance Abuse Services, Department of Human Resources, for the ADATC's for the 1995-96 fiscal year, for the 1996-97 fiscal year, and for the 1997-98 fiscal year, fourteen percent (14%), or one million four hundred fifty-four thousand two hundred ninety-nine dollars ($1,454,299), each fiscal year to area mental health authorities, to implement the pilot program established in this section.
(d)	This section becomes effective July 1, 1993.
––-DD IN-HOME CARE INITIATIVES.
Sec. 8.  (a)	The General Assembly finds that, in the movement to reduce the number of people living in institutions, the most under-utilized approach is the prevention or the reduction of the need for out-of-home care and support.  The General Assembly further finds that, quite often, a relatively small amount of support at the family level can prevent long-term, costly services in a residential facility. 
(b)	The Department of Human Resources shall forward its application for an expanded Medicaid Home- and Community-Based Waiver as soon as possible, in order to enable the Department to fund in-home support programs and comprehensive case management services essential to the increase in family support programs for people with disabilities pursuant to this act.
(c)	There is appropriated from the General Fund to the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, the sum of thirty-one million nine hundred thousand dollars ($31,900,000) for the 1993-94 fiscal year and the sum of forty million one hundred thousand dollars ($40,100,000) for the 1994-95 fiscal year to implement the Medicaid Home- and Community-Based Waiver and to fund programs that support families of people with developmental disabilities that cannot be funded through the Medicaid Home- and Community-Based Waiver.  These programs shall include direct family subsidies and family support coordination networks.
(d)	This section becomes effective July 1, 1993.