On Tuesday, President Barack Obama will sign into law a $787 billion stimulus package in order to help jump start the United States economy.
Six billion dollars will directly aid North Carolina state government. It remains unclear how much of the $6 billion can be used to close North Carolina’s anticipated $3 billion budget shortfall.
Preliminary information on the breakdown of where that money will be allocated can be found at this link.
(I spoke with Congressman Etheridge on Sunday about how this report neglected to allocate money for public school construction. He informed me that there is over $500 million designated for school construction in North Carolina in the final stimulus package.)
Last Wednesday, Senate Pro-Tempore Mark Basnight and the Full Appropriation Chairs met with the subcommittee co-chairs for Education; Senators Vernon Malone and Richard Stevens, and the co-chairs for Health and Human Services; Senator Bill Purcell and me. We discussed fiscal planning as we await two things: the final figures from the federal stimulus package and Governor Perdue’s submission of a proposed budget, which is due by her self-imposed deadline of March 11, 2009. Senator Purcell and I will meet this week with our House counterparts; Representatives Bob England, Verla Insko and Beverly Earle, to start developing a plan identifying $500 million dollars in budget cuts.
The Senate is responsible for passing a proposed budget first this year. The purpose of advance joint meetings between the House and the Senate committees is to minimize differences between the chambers as early as possible.
Potential Targets for Cuts: Provider Reimbursement Rates
Last week we discussed cutting optional Medicaid programs as one option in identifying the $500 million that will have to be trimmed out of the Health and Human Services budget. Another major area where cuts in Medicaid will be considered is the area of health provider reimbursement rates. The reimbursement rate is the amount of money a provider is paid for particular medical services or goods. Reimbursement rates are set for assisted living facilities to care for the elderly poor, pharmacists to provide prescription drug medications, and physicians to provide treatment. In addition, hospitals, mental health providers, group homes for the developmentally disabled, dentists and home health companies would be affected by cuts in provider rates.
This week, I want to specifically discuss reimbursement rates for physicians. Proponents of cuts for physicians argue that North Carolina’s reimbursement rate of 95 percent of the amount paid by Medicare is the highest in the Southeast. For example, South Carolina’s reimbursement rate is 89 percent of the Medicare reimbursement rate. A reduction of the reimbursement rate for physicians in this state from 95 percent to 90 percent will result in a state savings of roughly $20 million and a loss of an estimated $37 million in matched federal dollars.
I oppose lowering reimbursement rates for physicians because the current rate often does not cover the cost of providing the care. The actual costs not paid by Medicaid are, in practice, passed to private insurance companies, which then increase the rates companies and workers pay, to keep hospitals and physicians financially stable. Cutting reimbursement rates will also lead to fewer doctors providing primary care to the poor and will result in more poor people showing up in emergency rooms for care. Important information on this subject can be found at this link.
Because of our higher reimbursement rates, in part, over 3500 physicians participate in the Community Care program. This program has saved taxpayers over $100 million by diverting Medicaid recipients into preventative care plans instead of going to the emergency room for healthcare. Emergency healthcare is extraordinarily expensive compared with preventative care by family physicians. The program may become a model for the rest of the nation as part of President Obama’s plans to reform the delivery of healthcare in the United States. See this link for more details.
Commerce Committee scheduled to hear SB 12- Legislation Banning Adult Cell Phone Use While Driving
On Tuesday, the Commerce Committee is scheduled to consider legislation that would make it unlawful (an infraction) to use a cell phone while driving. This is the link to the story.
Last year the same bill passed out of the Senate Judiciary II Committee, but was not heard on the floor because Senator Charlie Dannelly determined he did not have the votes for passage. Several years ago, the General Assembly passed legislation making it illegal for drivers under age 18 to use cell phones while driving. Senate Bill 12 as drafted exempts hands free mobile phones. This vote sets up a classic debate between the role of the government to protect liberty choices versus the role of the government to maintain the public safety. How do you think we should vote? What amendments, if any, would you propose? This is your opportunity to weigh in on the subject, and I am exceedingly interested in hearing your opinions.
Effective government depends on participation by its citizens, and my office welcomes your participation on all issues that you feel are important. I do consider it an honor and a privilege to serve you in the North Carolina General Assembly.
Sincerely,
Doug Berger