Worried about steep cuts in Medicaid rates for services county public health offices provide low-income pregnant women and troubled children, child and health advocates last week talked about sick infants dying and public health offices possibly having to fire nurses they couldn't afford. 

After the outcry, Dr. Craigan Gray, the state's Medicaid director, said rate cuts for case management for the children and pregnant women's programs would remain at 19 percent, rather than jump to near 40 percent."It leaves public health a few dollars better off than the 40 percent cut," he said. 

The case management cuts were to the maternity care coordination, child services coordination, health check and early intervention programs. 

Gray said the decision to keep the cut at 19 percent was independent of the public criticism.

 "We've been thinking about this for a long time, and talking about this a long time," Gray said in an interview last week. "It's not a new idea. The direction has been headed that way for many weeks."

Keeping the 19 percent rate reduction will cost the state about $1 million, he said. 

Gray said the concerns about public health offices not being able to pay bills were overblown. Every year, the federal government settles accounts, and pays local offices for their actual costs, he said. To help public health offices keep up with their bills, the state had decided to settle costs every three months, he said. 

Lynette Tolson, executive director of the N.C. Association of Local Health Directors, said Monday she had not heard from the Medicaid office that it would not go through with the 40 percent cut, or that it would go to quarterly cost settlements. 

"This has been our rollercoaster," she said. "We get information from different people, a legislator, it could be from anyone.  The only thing we know there's going to be a 36 percent to 39 percent cut in rates. There's nothing else formal that's come out."

Even if the public health offices will get the higher rate, there are still questions about how the programs will operate, she said. 

Tom Vitaglione, senior fellow with Action for Children N.C., also heard rumors that the public health services would get the lesser rate cuts, and thought the public pressure helped reverse the state's decision. 

'I'm just disappointed we had to go this far," he said. 

The state must repay about $300 million to the federal government for overbilling Medicaid.

Starting last November, public hospital Medicaid payments were improperly  billed to the federal government rather than to a state account, according to the state Department of Health and Human Services, Lynn Bonner reports.

The state has agreed to repay $200 million by the end of the month, and the rest by the end of the year.

"This mistake should not have been made," DHHS secretary Lanier Cansler said in a statement. "Originating almost eight months ago, it should have been identified and reported earlier. I have discussed the matter with the Governor, and I am aggressively working to strengthen the internal controls and will take whatever other remedial actions may be necessary."

While Gov. Beverly Perdue supports efforts to overhaul the national health care system, she is worried that state governments will get stuck with the bill.

"We are all hungry for a solution, but the absolute deal breaker for me as governor is a federal plan that shifts costs to the states," Perdue said in a statement Tuesday.

Perdue, a Democrat, echoed the sentiments of many of her fellow governors who attended the summer meeting of the National Governors Association in Biloxi, Miss. over the weekend, reports Rob Christensen.

The governors expressed concern that President Barack Obama's plan would not do enough to hold down health spending would also shift more of the costs of Medicaid, the health insurance program for the poor, to the states.

Perdue skipped the meeting to stay in Raleigh in case she was needed for the budget negotiations, according to her staff.

The governor said the concerns of the states must be heard as Congress puts together a new health care plan.

"I urge our federal leaders to find a national solution that will provide access to affordable care for everyone without putting the financial burden on states," Perdue said. "Put simply, a national health care system must provide the right care, at the right time, at the right place – and at a price that people, and states, can afford."

North Carolina voters have a certain amount of skepticism about proposed changes in the nation’s health care system, according a new poll.

The survey suggests opposition to any plan that results in higher taxes for universal health care and skepticism about government-run programs.

That is according to a poll conducted for The Civitas Institute, a conservative-leaning advocacy group in Raleigh.

According to the poll, 61 percent of voters selected keeping cost affordable as their highest priority in any health care reform; 18 percent selected maintaining a high quality system while only 16 percent said universal coverage for all, Rob Christensen reports.

"While political leaders cite all kinds of reasons federal action is needed, at the end of the day North Carolina voters are most interested in keeping health care costs affordable," said Francis De Luca, Civitas Institute executive director. "Politicians would be wise to listen to what the voters are saying."

Only 36 percent said they would be willing to pay higher taxes to provide insurance for everyone, while 56 percent said they would not, according to the poll.

When asked, given their knowledge of Medicaid and other government programs,  whether they would you would entrust their health or their family’s health to a government-run health insurance plan, 29 percent said "yes," 56 percent said "no" and 9 percent said "not sure."

The poll of 600 registered voters was conducted July 14 to 17 by Tel Opinion Research of Alexandria, Virginia. The survey had a margin of error of plus or minus 4 percentage points.

Today marks not only the start of the new budget year but a variety of new state laws go into effect. Here's a sampling courtesy of the Associated Press:

-- State government takes over completely the Medicaid cost-sharing payments that counties paid for decades.

-- The state gasoline tax that was supposed to drop by 2 cents a gallon on Tuesday will remain the same.

-- A $675 million-plus bailout of the health insurance plan for teachers and state employees takes effect.

-- The state also expands property tax breaks for completely disabled veterans, the elderly and people with "working waterfront" property such as fisheries.

-- Active duty members of the military, including those who are home on leave, can hunt and fish without a license.

North Carolina is one of six states that do not have a "preferred drug list."

By setting limits on what drugs can be prescribed for Medicaid recipients, the measure would cost drug companies millions, but it would also save the state $28 million a year.

For years, attempts to create such a list have failed at the legislature, but the severity of next year's $4.5 billion budget shortfall may finally push for the change.

When the House Appropriations Committee unveiled its budget Tuesday, it included such a plan.

Adam Searing, director of the Health Access Coalition, says that he's lost many battles before when pressing legislators for the drug list.

"The pharmaceutical industry is enormously politically powerful in North Carolina," he said. (N&O)

Where is North Carolina's federal stimulus money going?

A bimonthly report from the U.S. Government Accountability Office has a breakdown of where some of the stimulus money has gone so far:

* MEDICARE/MEDICAID: As of April 1, the state had drawn down $414.6 million extra for Medicare and Medicaid programs to offset the budget deficit.

* ROADS AND BRIDGES: As of April 16, the N.C. Department of Transportation had obligated about $165 million for 53 projects in economically distressed areas.

* EDUCATION: As of April 2, the state has been allocated about $952 million to fund education, but it has not yet determined how to spend it.

In addition, North Carolina expects to receive $80 million for worker training, $34.5 million for crime control grants and other money for a low-income housing tax credit program.

Overall, the state is expected to receive $6.1 billion.

A proposal requiring the state provide more information to the public about deaths in state psychiatric hospitals breezed through the Senate this afternoon in a unanimous vote.

Senate Bill 799 would require the state to disclose the names and ages of people who die in state institutions, the day and time they died, and a description of the circumstances, Lynn Bonner reports.

The bill would also require the state to release such information about former patients who die within seven days of release from a state hospital, developmental disabilities center, or drug and alcohol treatment center.

If enacted, the measure would require a policy reversal in state Department of Health and Human Services, which has declined to release such information.

Gov. Beverly Perdue and state Attorney General Roy Cooper support the bill.

"Making reports of incidents at state mental hospitals public can help patients get better care and treatment by shining a light on problems," Cooper said in a statement.

A Medicaid investigations unit in Cooper's office is currently investigating several incidents at state mental health and developmental disability facilities.

A bill would help soldiers with brain injuries.

Rep. Grier Martin, a Raleigh Democrat who served in Afghanistan, said he filed the bill to help veterans who fall through the cracks of the military health care system.

Currently, the state's Medicaid system pays for traumatic brain injuries suffered up to the age of 21, which are considered developmental disabilities.

But Martin said that leaves out a lot of veterans.

"For the most part, if you're a soldier and you get (traumatic brain injury) in combat, you're aged out of that," he said.

Though many get care while on active duty through the Department of Defense and later through the Veterans administration, some can't make it to those hospitals.

The bill would direct state government to apply for a waiver from Medicaid to help people 22 and older with brain injuries.

A hospital administrator who once worked in Asheville will be the state's next Medicaid director.

Dr. Craigan L. Gray will become director of the state's Division of Medical Assistance on April 27. He will make $270,000 a year, Lynn Bonner reports.

Gray is vice president of medical affairs and chief medical officer at Bon Secours Our Lady of Bellefonte Hospital in Ashland, Ky., according to the state Department of Health and Human Services. He also holds a law degree and an MBA.

Gray was chairman and managing director of Employee Benefit Trust in Asheville from 1995-2002, and was a doctor at Mission Hospital in Asheville. In 1975, he co-founded and was the senior managing physician of Asheville Women's Medical Center.

Tara Larson, the acting Medicaid director, will return to her job as deputy, a department spokesman said.

Medicaid, the federal health insurance program for the poor and disabled, is the biggest expense in the DHHS budget. The division spent more than $9 billion in the last fiscal year on services to 1.6 million people, or one-fifth of the state population, according to DHHS.

"I am excited that Dr. Gray's training and experience in medicine and the law as well as practical skills in business management, both in Kentucky and here in North Carolina, make him an outstanding choice to lead our state's Medicaid program," DHHS secretary Lanier Cansler said in a statement.

"He is exactly the type of dynamic leader that Gov. Perdue and I discussed bringing on board at DHHS to help us manage this complex program that provides much needed and necessary services to our fellow citizens."