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Benchmarks' Friday Membership Webinar
August 28, 2020 |
NC Cases: 161,076
Cases Hospitalized: 958
NC Deaths: 2,630
Session Plans
Colin Campbell, THE INSIDER, 8/24/20
Senate Republicans outlined their plans for the upcoming Sept. 2 legislative session in a news release Friday. Legislators are set to return for a brief session to handle coronavirus relief funding and other related matters, as well as appointments, but it's unlikely that Congress will have finalized a new COVID-19 funding package. "According to the budget writers, funding proposals to the full legislature will focus on education, unemployment, child care and broadband," Senate Republicans said in their press release.
The list includes increasing the state's maximum unemployment benefit payment. North Carolina has been approved for the new $300-per-week additional unemployment payment from the federal government, but legislators will need to allocate the state's share of the program. Senators are looking to go further. "Budget writers are running numbers now on how much to increase North Carolina's maximum unemployment benefit," the news release said. "North Carolina has one of the healthiest unemployment reserves in the country because of smart budgeting during the boom years. Budget writers must balance the desire for a higher maximum benefit with how long the Unemployment Trust Fund can sustain the higher benefits before going empty."
Senators also say they'll address a spike in demand for child care by eliminating some regulations that "make it more difficult and time-intensive to open a child care facility." And they'll look at changing eligibility rules for private school vouchers so more families will qualify. "With public schools completely closed in many parts of the state, the Opportunity Scholarship is the only pathway to in-person learning for some families," the press release said. COVID-19 related healthcare and rural broadband access issues are also on the agenda, but the press release did not provide additional details on those topics.
Also Friday, legislative leaders announced that they've made "arrangements" with the state's major hospitals to ensure that lawmakers can get COVID-19 tests before they return to Raleigh. The testing is optional, but a news release said that "legislators should self-isolate as they await their test results." Temperature checks and other measures from the short session will remain in place in September, according to the news release.
Funding Availability
Colin Campbell, THE INSIDER, 8/26/20
When lawmakers return to Raleigh next week, they'll have either $552.4 million or $903.9 million in federal coronavirus money available to spend. That's the somewhat confusing guidance from the legislature's Fiscal Research Division, which presented the latest numbers to a House COVID-19 committee on Tuesday. So far, the state has allocated $3.03 billion of the $3.59 billion it received from the federal CARES Act. But $351.5 million of that hasn't actually been spent yet, because the allocations hinged on the federal government giving states more flexibility with the money - something that so far hasn't happened.
So factoring out the contingent allocations would leave legislators with $552.4 million. But if they decide to reallocate the contingent funding - much of which was supposed to go to the cash-strapped N.C. Department of Transportation - then $903.9 million can be spent next week. That's "the discussion that will go back and forth between full (appropriations) chairs as to trying to decide which of these numbers to work with," said Rep. John Fraley, R-Iredell.
The funding requests before the legislature could easily exceed either amount: On Tuesday alone, K-12 schools, colleges and universities requested a total of $350 million. Legislators had hoped that Congress would have finalized a second coronavirus relief package in time for the September session, but that's now unlikely, and the delays could require legislators to return again later in the fall if more money arrives from Washington.
Governor's Budget Proposal
DAWN BAUMGARTNER VAUGHAN, THE NEWS & OBSERVER, 8/26/20
North Carolina Gov. Roy Cooper laid out his budget proposal and called for two bond measures a week before the state legislature returns to Raleigh for a brief session. He asked for bonuses for teachers, principals, school support staff and community college employees. His proposal also would cut money for opportunity scholarships, which are vouchers for private education.
Here are the details of the governor's proposal:
$175 million for public health, including $25 million for testing and tracing; $50 million to target rural and historically marginalized populations; and $40 million for early childhood services.
$49 million to develop a state stockpile of personal protective equipment
$132 million for K-12 public schools
$50 million for high-speed internet access
$27.5 million for a small business rent, mortgage and utility support program
$18 million to support historically underutilized businesses
$2,000 bonus for teachers and principals
$1,000 bonus for school support staff
$1,500 bonus to community college and university employees
Cooper also proposed a $4.3 billion bond for schools, higher education, water and sewer infrastructure and affordable housing that would require a public vote. He proposed a $988 million health care infrastructure bond that would support health facilities, public health labs and development of a vaccine. It would not require a public vote
FEMA Supplement for Unemployment Benefits
North Carolina has been approved for a federal boost in unemployment benefits that would grant people out of work because of COVID-19 an additional $300 a week. FEMA, the Federal Emergency Management Agency, announced the approval Friday afternoon, a day after North Carolina submitted its application. Fourteen other states have already had their applications approved for a share of the fund, which is capped at $44 billion. The NC Division of Employment Security, part of Gov. Roy Cooper's administration, applied for about $321 million. The FEMA announcement did not say how much money North Carolina would receive. It said FEMA would work with Cooper to "implement a system to make this funding available."
The $300 supplemental payment is less than the $600 a week that expired at the end of July after Congress couldn't reach a deal to extend benefits. It's also less than the $400 that President Donald Trump announced he would authorize by redirecting FEMA disaster relief money.
Gov. Roy Cooper said Wednesday that he expects North Carolinians on unemployment will see the $300 federal boost in their checks next week. "We're hoping that's when that's going to happen," Cooper said Wednesday afternoon, during a news conference on his new budget proposal.
That money won't last long. So far, the federal government has approved only enough money to cover three weeks of payments, all of which have already passed. The benefits will be paid retroactively.
State legislators have said that they would vote to allocate funds for the state's share. Pat Ryan, spokesperson for Senate leader Phil Berger, told The News & Observer Friday that the legislature could draw from leftover funds from the federal CARES Act or authorize the governor to dip into the insurance trust fund.
K-12 Education Requests
Colin Campbell, THE INSIDER, 8/26/20
Fearing a possible drop in enrollment if extended virtual instruction prompts families to drop out in favor of private schools or other options, the state's public schools are asking lawmakers to change how enrollment-based funding is calculated. In a presentation Tuesday to a House COVID-19 committee, State Board of Education Chairman Eric Davis said the current allotments should remain through the school year even if a school's enrollment drops. The current allotments aren't based on this year's actual enrollment and instead use either enrollment from 2019-2020 or projected enrollment for this year, whichever is higher. Legislation should also tie principal salaries to the current allotments, so principals won't face an automatic pay cut if enrollment drops, Davis said.
The State Board of Education and the Department of Public Instruction also are asking legislators for $122.4 million, in addition to millions already allocated for COVID-19 impacts to public schools. Here's some of what they said are top priorities:
$44.5 million for additional personal protective equipment. Schools already have thermometers and an allotment of cloth face masks, but want additional disposable masks, hand sanitizer, facial tissues and disposable gloves and gowns for nurses.
$18 million to continue using school buses as mobile internet hotspots and to deliver meals to students
$15 million for more portable internet hotspots for students who don't have an internet connection at home
$17 million for educational services to children with disabilities
$5 million for cybersecurity. "Security of our technology systems has never been more important," Davis said. "As recently as yesterday, one of our districts was subject to an attack."
Ransomware Attack
THE ASSOCIATED PRESS, 8/27/20
A North Carolina school system is closed to its students after officials discovered a ransomware attack. Haywood County Schools is closed for the rest of the week following an announcement on Wednesday, the Asheville Citizen-Times reported Thursday. The system says there will be optional workdays for staff. School staff discovered the attack on Monday and classes were canceled for the next three days. According to the school system, a third-party attacker asked for ransom in exchange for stopping the attack. System officials said the attack is requiring the school system to rebuild its entire network and technology services.
"We are confident that we will have some Internet restored tomorrow," Haywood superintendent Bill Nolte said in a news release on Wednesday. "However, it is unlikely it will be viable at all locations until sometime next week. ... We are using extreme caution because we want to avoid any setbacks when we restart instruction and reopen our technology resources." The district took services offline to contain the incident and contacted the N.C. Department of Public Safety.
Internet Access
Colin Campbell, THE INSIDER, 8/28/20
House and Senate budget writers agreed Thursday to spend another $30 million in federal coronavirus funding on a rural broadband grant program. The program, known as GREAT (Growing Rural Economies with Access to Technology) has received about $24 million in funding from the legislature so far this year. "So far, in 2020 more than $12 million in grant funding has been awarded to expand access to 8,017 households and 254 businesses in 11 counties," the press release from legislative leaders said.
Gov. Roy Cooper's budget seeks to spend even more federal dollars on internet access issues - but not necessarily through the GREAT program. He's calling for a $50 million "emergency grant program" to fund "projects that bring connectivity to communities most lacking in service, enabling them to promote business development, telework, utilize telemedicine, and learn online in response to COVID-19." Part of that funding would go to new internet access programs led by the states HBCUs and UNC-Pembroke, while another portion would create a new "Broadband Subscription Assistance" for households that can't afford their internet bills.
The GREAT program, by contrast, provides grants to internet service providers to cover the cost of building infrastucture in underserved areas. In addition to the grants, legislative budget writers said Thursday that they plan to spend $10 million to buy more portable internet hotspots for K-12 public school students. "This funding reinforces the commitment from both the Senate and the House to connect our students, parents, and teachers to online learning resources no matter what challenges are before us," House budget writer Rep. Jason Saine, R-Lincoln, said in a news release.
Significant Increase Children with COVID-19
Coronavirus infections among children in the United States jumped by more than 20% in August, according to a report from the American Academy of Pediatrics and the Children's Hospital Association.
The report doesn't offer insight into why cases have climbed from about 358,000 on Aug. 6 to about 432,000 on Aug. 20, but the increase comes as many students across the country have returned to classes. "Reinforcement of prevention efforts is essential in congregate settings that serve children, including childcare centers and schools," says the Centers for Disease Control and Prevention.
Shift in federal rules may mean fewer NC children get school lunches
By Travis Fain, WRAL statehouse reporter
RALEIGH, N.C. - State and local school officials worry that a shift in federal rules next week will make it harder to feed children across North Carolina through school breakfast and lunch programs.
The transition from an emergency program with laxer rules back into the traditional program, which has more eligibility checks, means fewer children are eligible. Difficulties in determining that eligibility out in the field may mean systems stop delivering meals or offering pick-ups at schools that offer online classes. "It's a grave issue," State Board of Education Chairman Eric Davis said this week. "This will decrease the number of children that we're able to feed."
After some back and forth in recent weeks with multiple states, the U.S. Department of Agriculture said late Tuesday that it had extended a waiver used to run the more lenient feeding program through Sept. 30. That waiver had been scheduled to expire Monday.
But the extension may not mean much in North Carolina and potentially in other states.
Lynn Harvey, North Carolina's head of School Nutrition Services, said the extension won't apply here because of the way the waiver was worded and the fact that North Carolina schools opened under a blended plan of in-person and virtual instruction.
The waivers, Harvey said, specify that the less restrictive program "may no longer be operated once schools are open for student instruction."
In the weeks after schools closed this spring due to coronavirus, school systems partnered with food banks, the YMCA and other groups to gear up massive feeding programs. They used schools as pick-up points where parents could come for food and sent out some 2,100 school buses to drop meals off, often at bus stops.
Workers haven't worried about whether children qualify for free or reduced-price meals, which is based on federal calculations tied to family income. They haven't even worried about whether a child is enrolled in school, Harvey said. They've simply distributed meals, and the federal government paid for most of it under the USDA waivers.
But the USDA's move to a more traditional system would mean that only students enrolled in public schools and who meet income eligibility requirements qualify for a free lunch or breakfast. Whether a child qualifies is supposed to be confidential, making it more difficult to determine eligibility at drop-off and pick-up sites, Harvey said.
The program has also been feeding students who are home schooled, charter school students who don't normally qualify and, in general, any child who shows up and needs a meal, she said.
"Just having to provide meals by eligibility status becomes a tremendous challenge," she said.
Harvey gave an example: Someone comes to a school with four children in the car. Two are enrolled in a public school, two aren't and aren't supposed to get a meal.
"How do you deal with that scenario?" she asked.
Some systems have already scaled back their programs. Others have been planning to do so next week.
Census Deadline
Colin Campbell, THE INSIDER, 8/25/20
Gov. Roy Cooper is joining seven other governors in calling on the federal government to extend the deadline for the U.S. Census. In a letter sent Monday to U.S. Commerce Secretary Wilbur Ross, Cooper and the other governors argue that the deadline to respond should be moved from Sept. 30 to Oct. 31, which is the original scheduled deadline. According to NPR, the Census director said the earlier deadline is needed to "accelerate the completion of data collection and apportionment counts by our statutory deadline of Dec. 31, 2020, as required by law and directed by the Secretary of Commerce."
"Your recent announcement calls into question how millions of Americans who have yet to fill out their 2020 Census will be counted," Cooper's letter says. "It is surprising to hear how optimistic the Census Bureau is about being able to reach 100% in less than 60 days, given the current daily self-response rate and the fact that, as of the writing of this letter, only 63% of the country has responded to the 2020 Census." Cooper is joined on the letter by the governors of Oregon, Vermont, Colorado, Illinois, Michigan, New York and Washington.
North Carolina's response rate is slightly behind the national average, with 60.1% of households responding to the questionnaire as of Aug. 20. But the response rate varies wildly across the state: Only 30.4% of mountainous Avery County has responded, while suburban Union County has the state's highest response rate at 71.9%. The discrepancy is even wider among towns. Bear Grass, a town of about 75 people in Martin County, leads the state with a 87.5% response rate. The state's worst response rates are found in Fontana Dam (0.9%), Indian Beach (6.1%), Lake Santeetlah (7.1%) and Sugar Mountain (7.7%). Some of those are resort communities with numerous second homes.
Cooper noted in a press release on Monday that the financial stakes of Census participation are high. "A complete and accurate Census count could bring $1,823 per person per year in federal and state funds back to North Carolina communities, helping our most vulnerable populations including the elderly and communities of color," the press release said. "An undercount could also jeopardize North Carolina adding another seat in the US House of Representatives to represent the people of our state's interests."
Rural Hospitals
Liora Engel-Smith, NC HEALTH NEWS, 8/24/20
The cancellation of elective surgeries in early spring left rural hospitals across the state nearly empty and without a major source of revenue. The implications of that financial blow are becoming clearer as health systems release financial disclosure documents from that period. The state and federal government has funneled hundreds and thousands of dollars to hospitals, earmarking specific funds to the state's roughly 50 rural hospitals. That support may have averted an immediate crisis, but rural hospitals are still not out of the woods, said Cody Hand, senior vice president of advocacy and policy at the North Carolina Healthcare Association. "We weren't confident before the pandemic hit that rural hospitals will make it another decade," he said. "And so this [financial hardship] didn't help."
Signs of financial strain are everywhere in North Carolina's rural hospital ecosystem. New data from the state health department shows that 31 rural and small hospitals received a grant of $84,317 apiece from federal funds that were allocated to the state for COVID relief. And 17 requested an early payment from NC Medicaid in June under an initiative that allows the state to essentially use the disbursements as short-term loans against future care. The loans are due in full in two years, but repayment begin in October, according to NCDHHS. Hospitals and skilled care nursing facilities across the state also got cash infusions in the form of Medicare loans, borrowing a collective $2.4 million, also against future care.
Yet rural hospitals continue to struggle, mainly because of their tenuous financial position even before the pandemic. Nowhere is that financial distress clearer than in Eastern North Carolina, a largely rural part of the state with pockets of persistent poverty. The biggest system there, Vidant Health, for instance, finished the nine-month period that ended June 30 $55.3 million in the red, for a negative operating margin of 3.8 percent, despite a round of layoffs in March. In May, Moody's downgraded Vidant's credit rating, citing the uncertainties of coronavirus in its decision.
Rent Relief
DAWN BAUMGARTNER VAUGHAN, THE NEWS & OBSERVER, 8/25/20
Two new federal grant programs starting in the next few weeks will provide millions of dollars to help North Carolinians with housing-related COVID-19 relief. Gov. Roy Cooper announced Tuesday that the two new programs, along with another already open, would provide $175 million in help during the coronavirus pandemic. The three programs are designed to work together to help people avoid evictions because of COVID-19, the governor's office said.
"COVID-19 has strained family finances across North Carolina, and many people are struggling to make ends meet," Cooper said in a news release. "People need a safe, stable place to call home, especially during this pandemic, and we must help keep people in their homes and keep their utilities on while our economy recovers." The N.C. Office of Recovery and Resiliency will distribute about $94 million - for rent and utility payments to avoid evictions - through community agencies. That money includes $28 million in Community Development Block Grant funds for COVID-19 and $66 million of CARES Act money.
Another federal grant program through the N.C. Department of Health and Human Services will provide $53 million for families experiencing homelessness or an immediate risk of it. That will also be distributed through community agencies. "Families in crisis don't have time to spare, and our state agencies are coordinating a plan to make it easier for people to get the support they need," Cooper said in a statement. Applications are not yet open. The programs are set to launch in the next few weeks, according to Cooper's office.
Group Home
Tyler Dukes, WRAL NEWS, 8/25/20
The North Carolina group home company that lost a multi-million-dollar federal grant to house migrant children after it failed to secure proper licensing is suing the state health department in federal court. In its 38-page complaint, filed Aug. 18 against the Department of Health and Human Services, New Horizon Group Home accuses state regulators of "outrageous violations" of the company's rights that ultimately led to the loss of a multi-year federal grant awarded in 2019 by the Administration for Children and Families. Federal officials are now demanding the company pay back about $3 million of that grant money.
The suit also takes aim at reporting by WRAL News, which first revealed in July 2019 that New Horizon received the grant without a residential child care facility license, required by state and federal officials to house migrant children under the terms of the award. Although WRAL isn't named as a defendant in the lawsuit, the complaint accuses the news organization of parroting false statements from DHHS and "false, negligent and shoddy reporting" that undermined the company's reputation and "likely contributed to the ultimate withdrawal of the ACF Grant."
"WRAL has spent more a year covering New Horizon's grant from the federal government and has given New Horizon and its CEO, Barbara Brockington, multiple opportunities to respond to questions. WRAL stands by its reporting," WRAL News Director Rick Gall said in a statement.
In 2018, state regulators abruptly shut down one of New Horizon's multiple mental health facilities over allegations of serious abuse and neglect, saying conditions presented "an imminent danger to the health, safety and welfare" of the boys housed there. Barely a year later, the federal government awarded the company a grant under a cooperative agreement to house migrant children separated from their families or detained crossing the border alone. The grant's total value for the first year was nearly $8 million, half of which was available to the company starting in early 2019. But after North Carolina regulators denied New Horizon's application for a residential childcare license needed to house the children at a planned complex in Laurinburg, federal officials halted the second half of the payout and formally canceled the company's grant in early 2020. In a letter to the company in June, the Administration for Children and Families outlined more than $3 million in unallowable spending the agency is now requiring New Horizon to repay.
DHHS spokeswoman Sarah Lewis Peel said the agency had no comment on the lawsuit. New Horizon's attorney, Brandon Neuman, declined to comment beyond the filing. And the company's chief executive, Barbara Brockington, did not respond to a phone call or an email seeking comment.
Medicaid Suit
WRAL NEWS, 8/27/20
A state judge has dismissed claims filed by several losing bidders that Blue Cross Blue Shield of North Carolina was improperly awarded a massive contract for a chunk of North Carolina's Medicaid program when it shifts to a managed care format next year. Blue Cross was among five providers to divide a $6-billion-a-year contract from the state Department of Health and Human Services to handle Medicaid claims. The state has for years been trying to move from a fee-for-service program, which often ran deficits the state had to pay, to a managed care format, with the providers getting a set amount for each person served. The transition is expected to occur next July.
Aetna Better Health of North Carolina, Optima Family Care of North Carolina and My Health by Health Providers, three providers who weren't selected for the Medicaid contract sued, alleging improprieties in how DHHS reviewed the bids. Most notably, the three alleged that one DHHS employee involved in the process was dating a Blue Cross executive, another employee took a job with Blue Cross after the contract was awarded and a third worked for Blue Cross before joining DHHS. DHHS and Blue Cross argued that the relationships were known when the bids were being reviewed and didn't amount to a conflict of interest. DHHS even noted in its filings in the case that its assistant secretary for Medicaid transformation previously worked for Aetna.
Administrative Law Judge Tenisha Jacobs ruled this week that the contract was properly awarded and dismissed the lawsuit.
"Once again, court rulings affirm the integrity and fairness of the department's managed care procurement process," DHHS said in a statement. "This is the second time that Judge Jacobs has ruled for the department and against entities that were not selected to participate as managed care health plans." The three losing bidders have appealed the case to Superior Court.
"After a year and half of protest with little progress, we are left no viable choice procedurally but to pursue our Medicaid protests against DHHS in Superior Court," an Aetna spokesman said in an email.
Aetna is asking the court to award it the contract or invalidate the entire bidding process and force DHHS to start over. "North Carolinians expect a fair process that awards the contracts to the companies best suited to provide care to its most vulnerable population and this has not happened due to unjustified delay, manipulation and conflicts of interest," the lawsuit says. Two other losing bidders, Optima Health (which has ties to Sentara Healthcare) and My Health by Health Providers, which is tied to major hospital systems, appealed to OAH but aren't party to Aetna's lawsuit.
Asked to comment on the lawsuit, DHHS issued a statement late Wednesday that said "on Aug. 25, 2020, DHHS received notice from the Office of Administrative Hearings that Judge Jacobs is ruling in DHHS's favor and granting its motions for summary judgment. The department is committed to transitioning Medicaid and NC Health Choice to managed care as directed by the NC General Assembly and is set to go live across the state on July 1, 2021."
