Employees with the state Medicaid office were called together Wednesday morning for a big staff meeting. Rumors swirled that it would be about July 1 switch-over to the new Medicaid claims billing system.

Instead, they heard from top state Department of Health and Human Services officials about how they're fixing Medicaid and how they have to control the budget. And Gov. Pat McCrory dropped for a pep talk.

Sources say he mentioned something about silos and how they should be broken.

An insurance claims clearinghouse that works with North Carolina healthcare providers is worried about the state's new Medicaid payment system.

As first reported in the Triangle Business Journal, an executive with Florida-based Availity wrote a letter to state Department of Health and Human Services Services Secretary Aldona Wos saying the company has not been given "numerous operational details" about the system.

Providers file insurance claims with Availiity, which then submits them for processing. The letter's author, Availity senior vice president of provider solutions Scott Herbst, declined through a company spokeswoman to be interviewed.

The state Department of Health and Human Services will switch to the new system July 1.

DHHS spokesman Ricky Diaz said Computer Sciences Corp, the company that built and will operate the system, has set up a special technical support group for companies such as Availity.

DHHS and CSC are readying a 'war room' for July 1, where problems with payments can be handled quickly, Diaz said.

"We've been pretty up front with the fact that we expect some bumps in the road," based on other states' experiences with switching to a new bill processing system, he said.

The department announced earlier this month that it had completed final tests of the system, and that more than 1.2 million claims were paid successfully.

Gov. Pat McCrory goes all 21st century fireside chat on us in a new video he is using to thank state lawmakers for passing one of his major legislative agenda items, a bill to revamp how transportation money is distributed. The House gave it a final approval Wednesday, sending it to McCrory's desk. It's not a Fred Davis video, per his campaign commercials, but it's McCrory talking from a chair comparing himself to a different president, Dwight Eisenhower.

"I had the opportunity to talk with Gov. Jim Holshouser on Saturday morning although he was unconscious and probably did not hear me, especially since his daughter, Ginny, said he did not have his hearing aids on.

"In case, he could hear me, I thanked him for being a mentor to me and for taking a chance on me and so many other young people at such an early age by bringing me into his administration. I also told him that I would be pulling on behalf of both of us for State to beat Carolina in the College World Series in baseball on Sunday afternoon, knowing that despite the tremendous challenges to his health, especially in the last year, he had never lost his sense of humor.

"There are many adjectives that come to mind in describing Governor Holshouser, but “integrity” is at the top of the list." Read the full piece here.

Dental hygienists who work for the state took the day off Wednesday to tell senators how important their jobs are to keeping children's teeth in good shape.

The Senate budget proposal cuts the Oral Health section in the state Department of Health and Human Services, which includes 39 hygienists who work to prevent cavities in school-age and pre-school age children.

Sixteen of the 39 were knocking on senators' doors Wednesday.

The state traveling hygienists put sealants on eligible children's teeth at school and refer them to dentists for fillings, said Wendy Schwade, a hygienists from Durham who works in Granville, Vance and Person counties. The state hygienists work in 80 counties, according to information from the office.

The Senate budget cuts all the jobs and $2.8 million, and sends $1.6 million to local health departments that sponsor dental clinics. But 51 counties don't have dental programs that would be eligible to take the diverted funds, according to the Oral Health office.

The House budget proposal spares the office.

Lt. Gov. Dan Forest says a North Carolina bill to allow immigrants in the country illegally would lead to "an influx of illegal aliens" and drain the state's social welfare programs.

"Those of us elected to office owe it to the citizens of our state to protect the rule of law," the Republican wrote in a letter to the editor published in the Winston-Salem Journal. "Our legislature should pass laws that encourage legal actions, not illegal ones."

Forest's stance makes him the most prominent opposition to date on the immigration bill, dubbed the RECLAIM NC Act, which would also allow immigrants to be jailed while police check their immigration status. The bill's sponsor, Rep. Harry Warren, considers it a compromise measure to make roads safer and free police to focus on criminals. The legislation is stuck in the House Finance Committee, where it has sat since early May.

TODAY AT THE STATEHOUSE: In committees, a number of contentious measures are being considered for discussion only. The House Finance Committee will review a taxpayer bill of rights, known as TABOR, that would constitutionally limit state spending. The Senate Education Committee will look at a House-approved bill to give students with disabilities vouchers to attend private schools. Senate lawmakers will also hear a bill in the Finance Committee that critics argue would allow mega-dumps and attract out-of-state trash. Also, the House Commerce Committee will roll out a major bill on Gov. Pat McCrory's agenda to reorganize the state commerce department.

In a rare appearance, First Lady Ann McCrory will step into the spotlight and hold her first news conference to ask the Senate to pass a watered down measure to regulate so-called puppy mills. The House approved the bill but the Senate has sat on it for a month without action. Her event is at 3:30 p.m. at the mansion. Gov. McCrory will have breakfast with lawmakers and then host his education cabinet at 1 p.m.

RURAL CENTER UNDER FIRE: Several board members of the taxpayer-funded N.C. Rural Economic Development Center said this week they are concerned about practices brought to light in a recent News & Observer series and welcome additional oversight.Rural Center leaders, however, said the newspaper reports do not properly reflect the organization’s work.

***More on the Rural Center controversy -- and the N.C. Democratic Party troubles, as well as a headline only Asheville could do best -- below in the Dome Morning Memo.***

House Speaker Thom Tillis made clear Tuesday that the divide between the House and Senate tax plans remains a wide gulf.

In an interview, Tillis said the two chambers need to breach a "philosophical" divide -- one that may take days, if not longer, to reconcile. His tone seemed to differ from Senate leader Phil Berger earlier in the day. "We are trying to change the mix in a way we believe will actually stimulate economic activity," Tillis said. "I think the Senate is trying to do the same thing, but they have also focused on spending reductions --which we all want, but we need to do it at a pace that we can actually absorb."

The Durham development called 751 South has again divided the legislature. This time, it took the form of a fight between the House Rules chairman and a House Finance co-chairwoman. Finance won going away, in a 75-36 vote.

That means a public hearing on the bill requiring Durham to annex land for the controversial subdivision is on for 4 p.m. Monday.

Rep. Julia Howard, successfully argued to Senate Bill 315 transferred back to her Finance Committee after it had been moved to Rep. Tim Moore's Rules Committee.

Howard said Finance had decided to hold a public hearing, so it wouldn't be right to move the bill.

Two major law enforcement agencies oppose a sweeping gun bill approved by the Senate. The N.C. Sheriff's Association and N.C. Association of Police Chiefs are concerned about a measure -- House Bill 937 -- that would loosen gun controls, by repealing the requirement for a permit to buy a handgun and allowing guns in bars and on school property.

House lawmakers declined to concur to the Senate changes this week, sending it to the Rules Committee on Tuesday.

The chiefs association board listed three major problems with the bill. It opposes allowing concealed weapon permit holders to take firearms into places that serve alcohol; firearms on schools and college campuses; and the elimination of the pistol permit. Regarding the latter, the police chiefs said "elimination of this important background investigation prior to issuance of a pistol permit is detrimental to public safety."

UPDATED: House and Senate leaders are working behind the scenes with the governor to strike a deal on a major tax bill, aiming to avoid lengthy negotiations in a conference committee.

The Senate delayed a final vote on its tax bill Tuesday to accommodate the new approach. "We are hopeful we can reach some accommodations," Senate President Pro Tem Phil Berger told the chamber.

A proposal to delay testing new teachers for tuberculosis got some push-back from House members on Tuesday. The House Education Committee held off voting on the bill.

The state Department of Health and Human Services sent a memo to local health departments earlier this year telling them that there is a shortage not only of a drug used to treat TB, but of the protein used in the skin test to screen for the lung disease.

DHHS advised health departments to put off routine skin-test screening, including in cases of employee hiring.

That advisory puts a crimp in teacher hiring. New teachers or those returning to the classroom are required by law to get the TB skin test.

Education committee members balked at the bill, which would allow school districts to put off the test requirement. Members questioned an open-ended deferral and whether the shortage was nationwide. The bill got pulled from consideration.

The National Centers for Disease Control reported in April a nationwide shortage of the skin-test product.

No consensus has formed among Republicans in next year's Senate race, but Congresswoman Virginia Foxx has the most support, according to a new poll.

Foxx leads among Republican voters with 23 percent, followed by state Senate leader Phil Berger with 11 percent, House speaker Thom Tillis and Congresswoman Renee Ellmer with 9 percent, former U.S. Ambassador with 8 percent, Cary physician Greg Bannon with 7 percent, Charlotte minister Mark Harris at 4 percent and former Charlotte Mayor Pro Tem Lynn Wheeler at 3 percent.

That is according to a new survey by Public Policy Polling, a Democratic leaning firm based in Raleigh.

Democratic Sen. Kay Hagan leads all potential Republican candidates by margins ranging from 4 to 9 percent.

An influential tea party group is picking sides in the ongoing tax debate in Raleigh. Americans for Prosperity is urging state lawmakers to back the Senate's plan -- instead of a competing House bill.

The Senate will take a final vote Tuesday on its tax overhaul and send it back to the House. AFP wants the House to concur and abandon its own plan, which the Senate mostly discarded.

“The quickest way to achieve the strongest possible tax relief and reform is for the House to concur to the Senate changes to House Bill 998," said Dallas Woodhouse, the group's North Carolina director, in a prepared statement. "We encourage the House to take this bold step to pass significant tax relief and reform that will get North Carolina back in the game for jobs and business.”

Rex A. Whaley has been named new financial officer for the N.C. Department of Environment and Natural Resources. Whaley is a CPA who has worked with DENR for more than eight years.

He replaces Rod Davis, who was recently appointed the first chief financial officer for the Department of Health and Human Services.

Whaley comes to DENR after serving as the chief financial officer with the N.C. Administrative Office of the Courts.

In his new role, Whaley will manage DENR's $820 million budget and direct the department's accounting operations, financial and strategic planning, treasury and cash management, grants and property management, purchasing and contracting