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#### Senate | July 24, 2014 | Chamber | Session

00:00 aye, senator Blue aye, senator Harrington aye who else we're missing that looks like it 47 have voted in the affirmative zero in the negative amendment four passes house bill 1224 has amended its back before the body further discussion or debate senator Hartsell. Mr president. why do you rise. to send forward an amendment. send forth your amendment. it should be on the dashboard. senator Hartsell moves to amend the bill, senator Hartsell you got the floor. thank you Mr president members of the senate quite honestly it's a very simple amendment it moves the cap from point five or 2.5 to 2.75 no more no less simplify the whole thing yesterday I was hoping to have the opportunity to ask senator Gunn if he had applied [??] razor to the context of this amendment because of its complexity because I don't think I would've said anything much I mean the simplicity of this is simply not apparent to avoid the conflict between the [??] whatever I suggest that we simply raise the cap to 2.75 that's what it does. further discussion senator Rucho. Mr president. you have the floor. I stand to speak on the amendment I appreciate senator Hartsell's efforts we've been talking about ways of trying to help work this unfortunately apparently we've not agreed how to get this best done there is consistency in the plan of setting it 2.5 what and it was carefully crafted so there would be no image or hint of any nature of a tax increase and this does give that image and I would urge that members of the senate vote down what is a tax increase in the sales tax. further discussion or debate. Mr president. senator Stein for what purpose do you rise. to debate the amendment. you have the floor. a couple of points one is senator Rucho just said consistency in the tax pays two and a half well right now we got a handful of two a handful more actually they're mostly two about seventy something about twenty something at two and a quarter one at 2.5 and two at 2.75 we've got two counties at 2.75 folks we're [??] we're already I looked at the ten commandments and nowhere does it say 2.5 percent this did not come from [??] it's a number and not only that it's a number that has no consistency in state law in fact the bill before us has 2.35 written in for two counties for [??] memorial unless they change it so we're never gonna be a 2.5 folks it is a number senator Hartsell is trying to address the point that senator Brown raised with passion yesterday that he thinks that there're two North Carolina's [??] that I absolutely share we do have a divide economic development divide between the urban and [??] areas this is a way so that [??] counties have the same capacity that what current law today the six biggest counties have second thing is that senator Rucho just called this a tax increase well it's a tax increase only if the people choose to raise their own taxes well guess what your bill does [??] is it gives people in the counties an opportunity to go to two and a half when they're two now I guess he has agreed with my point yesterday that your bill has a tax increase. further discussion or debate on amendment five senator Hartsell what purpose do you rise. speak I guess that's my first time on the amendment. you were explaining it that's correct you have the floor. thank you I'm struck by how this conflict which I perceive as being unnecessary it is a number but you know they say that consistency is the [??] of little minds problem is it is consistent it simply says we got a consistent [??] for everybody everything has to be in. 05:00

I'm not sure that when they talk about a tax increase or not a tax increase. If there's a tax increase in the base bill, there's a tax increase in this. I'm just trying to simplify the whole process because quite honestly, everything is voted. And I submit to you that this is a way to at least eliminate some of this conflict on laws that already exist. [SPEAKER CHANGES] Further discussion or debate on amendment 5? Hearing none, the question before the body is the passage of amendment 5. All in favor will vote "aye", opposed "no", 5 seconds will be allowed for the voting and the clerk will record the vote. 21 having voted in favor, 26 in the negative, the amendment fails. House bill 1224 is back before the body. [SPEAKER CHANGES] Mr. President? [SPEAKER CHANGES] Sen. Hartsell, for what purpose do you rise? [SPEAKER CHANGES] I have a motion to send forward to the clerk. [SPEAKER CHANGES] Senator, send forward your motion. The clerk will read Sen. Hartsell's motion. [SPEAKER CHANGES] A motion to divide question on House bill 1224 in accordance with the Senate rule 28, I move that the question of passage on third reading of the House bill 1224 be divided into separate parts that state separate and distinct propositions capable of standing alone as follows: Proposition 1: Part 1 of the bill, local option sales tax options. Proposition 2: The remainder of the bill, parts 2-6. Fletcher Hartsell Jr. [SPEAKER CHANGES] Sen. Hartsell, would you like to explain your motion? [SPEAKER CHANGES] I certainly would Mr. President. It's really very simple. Under rule 28, it separates the tax provisions from the other economic development provisions and calls for a separate vote on those 2 provisions, under the rules. [SPEAKER CHANGES] Mr. President. [SPEAKER CHANGES] Sen. Rucho, for what purpose do you rise? Speak on the motion? [SPEAKER CHANGES] Speak the motion. [SPEAKER CHANGES] You have the floor. [SPEAKER CHANGES] Thank you sir. Members of the Senate, this bill has been worked on, addressed, trying to work very diligently in creating economic growth, job creation, a lot of parts to it are there. If Sen. Gunn was here he would be saying the same thing, we're putting together a comprehensive effort to make North Carolina, and give our secretary and the state the tools to create jobs. This has been crafted together so that all the parts of it are part of the solution for us to achieve that goal, and so under the circumstances I would ask that you vote against this, because of the fact that it will interfere with the ability of this bill to get through on the House side. [SPEAKER CHANGES] Any further discussion or debate on the motion? Sen. Hartsell. [SPEAKER CHANGES] Mr. President, just to explain: It doesn't do anything with regard to the bill. It stays together, it just allows us, some of us who feel that it's appropriate, to look at 2 sections because they are 2 distinct propositions: One having to do with taxation, the other having to do with forms of economic development. I'm just simply saying, if both passes, the bill stays together. If it doesn't pass, or one doesn't pass, it goes back to the committee and you can deal with it. But I just think that people ought to have the opportunity to look at different sections of a bill that can easily be divided. And that's what it does, just gives us an opportunity to vote on the 2 sections. [SPEAKER CHANGES] Mr. President. [SPEAKER CHANGES] Sen. Tillman, for what purpose do you rise? [SPEAKER CHANGES] To speak on the motion. [SPEAKER CHANGES] The Senator has the floor. [SPEAKER CHANGES] Sen. Hartsell, I

And you have to work through those provisions. And you hope in the end that it balances out I think it has overtime has balanced out. This is an issue here I think you got 96 counties in reality that are happy with the provision. You got may be 4 counties that you could argue on. And I am not sure all 4 of those are in disagreement of what the bill does. So you have got a bill here where most of the states is in agreement. So why would separate something now for a few counties in this particular situation. Again most bills will pass. It leans one way or the other in most cases. I think it will set a terrible terrible precedent. Moving forward. What will hand up happening is we will start dividing every single bill on the floor and start voting it piece by piece. And this process might just become a full time legislator because it won’t take that long to go through the process. I think it’s a bad precedent and I would say let’s vote this motion down [Speaker changes] Mr. President [Speaker changes] Senator Tillman, what purpose do you rise? [Speaker changes] To speak a second time [Speaker changes] The senator has the floor [Speaker changes] Senator Brown, we are not setting a precedent. Whether you like this motion or don’t vote know or yes, we are not setting a precedent. We have separated bills. It’s not a precedent to separate a bill. Absolutely not. We have been able to do that. We have done that. And we will continue to have that option and don’t think we will separate every bill we don’t like. But it’s our choice on that. But we have not set a [Speaker changes] Senator Hise, for what purpose do you rise? [Speaker changes] To speak on the motion [Speaker changes] Senator you have the floor [Speaker changes] Thank you Mr. President, It is a precedent for most of us in the chamber. I haven’t ever seen this before and as I read through this rule I find it quite ridiculous to divide on this rule. I could understand if someone had a conflict want to be out of a vote on a particular part but if we divide this question, if we vote no on any part, you are killing the entire bill still and send it back to the committee in the last days as we are going to recess. It does nothing to move forward. To vote on any part of this down takes the risk of the entire bill as to whether any other jaded improvement or where for the companies that we trying to work for put those all at risk. By doing this it is a ridiculous move and we had multiple options on committee and discussions any one can run an amendment to remove any part of the bill that we wish rather than do so we are going through this procedure and I ask you vote against it. [Speaker changes] Ok Senator Clerk is back in the chamber Senator Hartsell, what purpose do you rise? [Speaker changes]To respond [Speaker changes] Well I think you have already spoken twice. But this is new territory I was hoping that you withdraw the motion. You have the floor [Speaker changes] Mr. President Members of the senate. There is a reason for the rule in the rules. It’s an unusual circumstance and I rather acknowledge. But they are two very very distinct propositions in this particular case legislation. It appears to me that its appropriate for us to look at that from that perspective. on those two. [??] if it’s ridiculous you know that’s what we are here for and that’ what these rules are for to address these things in a particular way. Simply saying, it doesn’t affect any body in any way other than it tells let’s ask about how we want to do what we want to do in this particular circumstances on segments of the bill, which probably should have been two bills anyway. [Speaker changes] Further discussion or debate. Hearing none, the question before the body is motion 11 to debate the question on house bill 1224 all those in favor of the said motion would vote aye and all those oppose vote no. You will have 5 seconds for the vote. The clerk will record the vote. 24 having voted in the affirmative and 24 in the negative. The motion fails. Question before the body, house bill 1224

Mr. President. [SPEAKER CHANGES] Senator Apodaca. Before we get to that it's my understanding that Senator Hunt and Senator Jenkins have requested and are granted excused absences for the remainder of the session and I have it on good authority that Senator Berger is back in the Chamber. [SPEAKER CHANGES] Objection. We might need to vote that. [SPEAKER CHANGES] Mr. President. [SPEAKER CHANGES] Senator Apodaca, for what purpose do you rise? [SPEAKER CHANGES] Mr. President, on House Bill 1224, Amendment #1, I voted aye. I'd like to change my vote to no. [SPEAKER CHANGES] Senator Apodaca would you come up to the Clerk's bench? Senator Apodaca? [SPEAKER CHANGES] Mr. President, I apologize. I read the wrong bill. I didn't have my glasses on. It was Senate Bill 763, Amendment 1, from aye to no. [SPEAKER CHANGES] That makes the vote on that amendment 23 in favor, 25 opposed. It still fails. [SPEAKER CHANGES] Mr. President. [SPEAKER CHANGES] Senator Newton, for what purpose do you rise? [SPEAKER CHANGES] Mr. President, as Senator Apodaca indicated, I had voted aye on Amendment 1 and wish to change my vote to no. [SPEAKER CHANGES] That again on Senate Bill 763? [SPEAKER CHANGES] That's correct Mr. President. [SPEAKER CHANGES] Senator Newton from aye to no on 763. [SPEAKER CHANGES] Mr. President. [SPEAKER CHANGES] Senator Blue if you'll give me a second to let me get the count and then. The score now is 22 for and 26 against. [SPEAKER CHANGES] Senator Blue, for what purpose do you rise? [SPEAKER CHANGES] I can cut this process short for you. We aren't going to do anything on that bill. [SPEAKER CHANGES] Senator Bingham, for what purpose do you rise? [SPEAKER CHANGES] Mr. President I wanted to change my vote from aye to no. [SPEAKER CHANGES] Is that on Amendment 1 too on 763? [SPEAKER CHANGES] Yes sir. [SPEAKER CHANGES] Senator Bingham from aye to no. So the vote is 21 in favor, 27 opposed. Members I believe we were on House Bill 1224. Can we bring that one back up? [SPEAKER CHANGES] Senator Tillman, for what purpose do you rise? [SPEAKER CHANGES] Mr. President, on the 1224 House bill, on the motion to divide, I believe that was motion 11, I'd like to change my vote from aye to no. [SPEAKER CHANGES] Senator Tillman from aye to no on motion 11 on House Bill 1224. Makes the count 23 in favor, 25 opposed. Still fails. [long pause] [SPEAKER CHANGES] Let's bring up House Bill 1181. Another tied vote. That's okay. Senator Berger has an excused absence. House Bill 1181. The Clerk will read. [SPEAKER CHANGES] House Bill 1181. North Carolina

Medic Aid Modernization [Speaker changes] Senator Page is recognized to explain the bill [Speaker changes] Thank you Mr. President [Speaker changes] I am going to make some opening remarks and after my remarks are over, if you would recognize Senator Hise for conclusion of remarks, I would appreciate it. [Speaker changes] Yes sir [Speaker changes] Thank you Mr. President. Medic Aid is a system that in need of reform. That if you quit laughing about that. In just the past 4 years, this general assembly had had to fill shortfalls totaling nearly $2 billion. That’s money that could have been invested in other priorities such as Education, Infrastructure and public safety. Every year we have come in here and done our best to contain cost and reduce growth and every year the choices get harder and the debates more heated. And if we ever going to get away from looking for cuts, we have to begin working towards reforms. Because without reform Medic aid budget would continue to soar. In fact the physical research division predicts that over the next 5 years the state’s Medicaid appropriation would grow more than a million dollar. That of course is an unsustainable Path. But this bill charts a new course. The senate plan builds on the foundation laid by the House’s reform plan by harnessing the power of competition between the provider led health plans. And managed care plans. Competition apparently scares a lot of people. But it’s the best way to ensure that the medic aid recipients get the best care possible at the lowest cost to the tax payer. We recognize that the provider led group would need time to get their feet underneath them however. After all they are used to treating patients in a fee for service system. Not managing population in a capitated system. So this bill provides them with a 36 month glad path to bearing full risk. Only by shifting the risk of budget overrun away from the state, will we be able to ensure budget predictability. It’s the only way this general assembly will ever be able to focus its energy and investment towards issues like continuing to improve education system. And Mr. President, if you would recognize Senator Hise for additional remarks [Speaker changes] Senator Hise you have the floor [Speaker changes] Thank you Mr. President and members of the senate. First just o\to go over some details what we have in the plan. I think not only is reform necessary in the plan but we begin by reform in our own house. We being with reform in the department. I don’t have to remind people about the problems we had in the department of Health and human services. Not only over the last year or the 16 months, but over the last decade. Software system glitches, other problems that have gone through, mismanagement, misoperations, costlier suit by the federal government. We got to pull it out and we are going to give a fresh start. That’s why we have proposed the creation of medical benefits section which will oversee Medicaid in the system. We go through this budget over and over again. Looks like a spaghetti play. The budget is so intertwined with everything else in health care in public health. And it’s very difficult to get a hand off on what it costs to run a medic aid department. And that’s we think this clean separation is necessary. Secondly we know that this bill by 2016 will have a vastly different Medic aid system that we currently have. That requires individuals with different skill sets and expertise than we currently have. We need individuals that can manage population and manage care and much fewer individuals who process for the appropriate 724: Speaker1: We have a code for this billing system and we are for service. That’s the nature of the system we are moving to. And we begin that process with the Board. A Board that you find in any major corporation notxxxxxxxxxxxx. We create a Board in place that outs a clear wall of separation between those who are receiving payments from the system and those who are making those decisions as to what it should be. So that individuals do not continue to stack xx board to better their industry or better their particular practice. We take what is currently a legislative process ; every year we come back in here we talk about the money we had put into Medicaid, but how many decisions do we have to make about what the rate should be for in-home care or what the hours of personal care service should be. We as a legislature now hand back to the Board of experts be able to make plan amendments and make the changes to the plan to be consistent with the budget we pass moving forward. The budget that we pass will create regions in the state of North Carolina xx. I suspect you will see somewhere between two and three and xx regions, but that they have that authority, the authority to set population thresholds for how large the region should be or designate them rural or urban. And in each one of those regions we first guarantee that a provider xx will exist in that region if it forms, then we allow others to be it, to be part of that region. By 2018 we expect all plans to be fully capitated in North Carolina which means the legislative and budget risk will be changes in population. We have budget risk if we have more participants in Medicaid or if more age-barred or disabled or others come on we have those budgets at risk, or if it’s more children reduce we will find savings. That would be our responsibility in the budget. Board will take up the responsibility of managing, the ACOs and MCOs will take over the responsibility of managing the cost of those individuals subsequent to the risk. Things we can’t do right now as a state. X both the House and the Senate. People came down here to do a lot of things in education, in economic development. And every time they plan to do them they run into the next Medicaid hole that are having to fill up. X Barring major changes from the Federal Government coming I believe strongly that this is the best system for budget predictability and for whole person care. Two things that the legislature has said is these priorities since we began this project xx and they have been ignored in every other plan. So I ask for your support and will be more than happy to answer any of your questions. Thank you. Speaker changes: Let the records show that the good looking Jackson with hair is back in the chamber, xx Jackson. Speaker changes: Further discussion and debate. Representative Stam for what purpose you arise? Speaker changes: To speak about an amendment. Speaker changes: Send forth your amendment. Clerk will read. Representative Stam moves the bill. Representative Stam will you explain the amendment? Speaker changes: Thank you Mr. President. The issue of having an independent department I actually, I think Senator Hise said there were xx in the DHHS, in the minutes of DHHS. I don’t know the solution for Medicaid xx in your department there may be other ways to get greater oversight every divisional Medicaid assistants rather than upsetting the whole applecart of House care services to our xx in North Carolina. That said I do respect the value on this system. NOTE: I have done my best; the audio would not play a second time for the first part. Thank you. Sure, the independence of the board and there is that I think an oversight that will reside in the drafting of the exclusions to who consult on the board to talk to him about it has to do with the managed-care companies right now. If you are a provider who get payment from division Medicaid assistance you were precluded from being on the board. This is a delusion has a contract can't be on the board, either. Well, there are no managed-care companies that have contracts with gauges, just because those don't exist. That the whole purpose. You're creating this thread says is this if you are managed care employee who gets appointed to the board, you can't come up with a way to write the rules and then let the contract have to go to your employer, then quit and have given a sweetheart deal for your company to says that if your managed-care employee who's on the board, your company is precluded from getting a contract for your time and it also has a revolving door of provision as you all recall the prior supervisor. Management EMA EMA and when you work for managed-care company and I think that we need to ensure that the public severance is so wrong. These boards make the decisions with absolute integrity and with the public 's mind at the forefront rather than having any question of just what influence their judgment so those are the two objectives of this amendment, now appreciate your support Speaker changed: in her heist or Euros, Speaker changed: the commissioners member Senate will not agree with the arguments for cellulite amendment• on the amendment. Speaker changed: Yet for quick organizers of the arguments made that this does strengthen the wall, separation on the board on its moving forward. As well as having individuals move forward. Also in her budget, vision, hopefully, will expand that all members of the department when they leave, but they don't know are writers, but I given that I would ask to support this movement is Speaker changed: for the discussion or debate on amendment one. During center bank. What purpose do you think I'll take this presence through speak only minimal tenderness for I appreciate Senator signs follow full amendment and urge Speaker changed: you to adopt any further discussion or debate on amendment one thousand eleven eighty one hearing on the question for the body is the adoption of amendment one for House Bill eleven eighty one, all those in favor about high. Although the puzzle vote no. You have five seconds for the boat. The clerk will record about amendment one passes forty six favorable zero negative ASP eleven eighty one spec Ford body for the discussion, debate us around the symbol for Iraq to send forth an amendment 's import your minimum clerk rate and a ravenous and moved to amend the bill to make you, Speaker changed: Mister President, and I hope the spirit of camaraderie, I just saw continues with this deal is all that you can't down a bit, but as I indicated to sanitize and pay and be committee meeting that I do agree that Mary Kay needs needs some revamping my concern. I ever is among several of the issues. Is this boring and if we're going to create a new entity to do things a new way, then, is some plot– we see the important of involving those people who are affected by is this a Medicaid recipients have missed benefit all the things have happened. We know that from the North Carolina tracks and fast systems we seen it. I been all over sideways. They know a bunch of stuff happen that we utilize handwaving Luanne of Medicaid recipients and decide what this does is increase important time allows for the governor to appoint to Medicaid recipients to the board adequately changes some of the others and numbers down, and if you respect and I know you say it also changes in terms of building recipient of the voice acting is well the changes. The bottom line. And if your risk that the people that we serve in the state and we are here to serve the Then they ought to have equal opportunity to help to make decisions about a system that is set up to benefit them. In all honesty and sincerity I'm putting forth this amendment, because I respect consumers. I believe they have the best sense of what benefits them, what does not. They can see how the system, really sometimes is played against them, and you and I have seen some things that don't work. Well, they've been the recipients of the harm that's been done to them. I think its important to include them on this board. I ask for your support. [SPEAKER CHANGE] Further discussion or debate on amendment 2. Senator Hise, what purpose do you rise? [SPEAKER CHANGE] Speak on the amendment. [SPEAKER CHANGE] You have the floor. [SPEAKER CHANGE] Thank you, Mr. President. Members of the Senate, I find that this amendment would be troubling to the operations. I think first and foremost it is looking at what we want the board to be. We have created a clear, separation in the board from those who receive from the board. Whether it be providers, doctors, benefits, and even recipients from those who make the decisions about what benefits are available in that. This clearly moves that wall much weaker. To take individuals who are recipients of the program, although I would note for most individuals, once qualifying on the board would no longer qualify for Medicaid, as they would no longer be in the income requirements to meet that. I think it's also important to look at what our Medicaid population is and look at who you're drawing from. Our Medicaid population, first of all is predominantly children number one. Secondly, pregnant women, so you have a short time period of a pregnancy, it's usually three months before and two months after that they would be a recipient. That they would have to qualify in the nomination process to remain on the board. The remainder would be the blind, disabled, who have medical conditions sufficient to the point that they are to spend as it is on their monthly maintenance that they cannot function, cannot work, cannot do these types of things. How you pick from a [??] that is greatly limiting that population by those perimeters finding two individuals to serve in a four year term would be a very difficult process from that. One those considerations and most importantly, for keeping that wall of separation from beneficiaries, from the ones making that decision I would ask that you defeat this amendment. [SPEAKER CHANGE] Further discussion or debate on amendment 2? Senator Robinson, what purpose-- [SPEAKER CHANGE] To speak on the amendment. [SPEAKER CHANGE] Senator has the floor. [SPEAKER CHANGE] I've heard Senator Hise's objections and I expected those. But, I also know that there are disabled, elderly, and blind people who are not necessarily limited in their educational assets or in their ability to think process and how systems are to work. They just happen to have a physical disability that limits their ability to get the kind of income they ought to have to life. What this legislature does, yes I said at the time they are put on the board. Certainly, we know when you make$96,000, you're coming off this, which is a good thing. But, at the time they go on. But, it also gives some additional information to a board. If we want to do things different and better, we need some real information from people it affects. There are elderly people, we can find them, it's not a matter of having them. I'm talking about children, etc. We know that, but blind, elderly, disabled people. Elderly people have contributed a lot to our state and to our country, and ought to be included in these things. Blind people, disabled people, some are veteran's, etc. I don't accept that as a reason not to have these folks involved in it, in this board. I think its important that we include them. You may say, we'll include them. We'll include them at the local level, at the provider, at the regional level, they need to be included in the process. [SPEAKER CHANGE] Mr. President? [SPEAKER CHANGE] Senator Wade, what purpose do you rise? [SPEAKER CHANGE] To ask Senator Hise a question. [SPEAKER CHANGE] Senator Hise, do you yield? [SPEAKER CHANGE] I yield. [SPEAKER CHANGE] Senator, go ahead. [SPEAKER CHANGE] Senator Hise, is it possible that the

Seventeen. Voting member favorable by twenty eight the negative amendment three thousand so hard for what purpose I don't know what does brigade sixteen having voted in the affirmative, twenty nine, and the negative amendment three fails, fails the Raymond J at eleven eighty one, but for the body that Jackson will procure us the Lulu center has four thousand members of our rights are passed. Consider replay and her staff 's work on this piece of legislation is not perfect and we all live. This is not the final prong that in my short-term available preparations and beautiful grove for years and watching our shortfalls and dedicate no having budget predictability and watching DHHS to be the only agency we have the somewhere of early in this state that augmented appears mean nothing to because it's always overrun with you and that is what holds us in her hospice talk about. I think this is a step in the wrong direction else and not doubters of called me and they said that we needed to do this we need to do that but I think those concerns would be notorious. Some of the advisory committees and is this new moves through the process of the General assembly, but I would just like to say I think this is the rock moved to be making that we can get predictability and for those that have looked at the video and we lost the whole body care to me that is just through the world powers. It is the most lift to bring everybody into the room and to discuss with him individual so you don't have to run him thereto in front, which is manifested as many as taxpayers. This costume in many Israel and sounds like a menu from the real number, passwords, or the discussion or debate our cinema four D Russ speak to the center has four extras were placed in the center. I have several major concerns for the hospital, eleven eighty one. The first one is to create an expansion of state government by supporting this bill you to support the largest expansion of state government in recent history. Secondly, it creates a new state agency without clear directions and phone. It creates uncertainty in the delivery of health services for the most battle in the state and undesirable on elderly and disabled, and for those reasons I like to check that the president advocate a part hereof. Statement of the letter has for you would like to thanks in her highest to survey the work in this area. A notable group committed to coming up with the best solutions to resolve Medicaid problems here. North Carolina was sent with him through many meetings with Angels of HHS oversight as well as the appropriations subcommittees. I know that there deeply committed to resolving problems and we've experienced the past which we continue to experience today at the same time, the solutions that are provided by this bill. I cannot agree with an see, I will completely edit HHS. This totality. I look at their responsibility. I look at the inextricable linkages between the Medicaid does not appear charge responsibilities are and what HHS is otherwise responsible for when it comes to approach them as a separate, independent agency. I think it's an issue that deserves far greater study in deliberations. That's a piece that needs to be put into a study bill. We need to put together those that are deeply rooted in the delivery Medicaid services. Those are providers. We need to involve those who perhaps are legislators as well, and individuals might be recipients to think about holistic lady what Medicaid deliveries should look like in North Carolina. We look at a study

Speaker: Reading ?? in it's totality what we may find if that we don't need ?? in the agency or we may find that need something that's semi autonomous i don't know honestly what would need that to conclude but i know however this general assembly tries to jump start efforts and does it extraordinarily quickly without appropriates deliberation thought and includes all the appropriates ?? orders that quite frequently we make mistakes we do things misguided with the very best of intentions if i look at in HHS priers only ?? personal care services we stepped on into a path in which we have to restring ourselves and rethink what we are doing if we gotta appropriate study if we gotta appropriate input we perhaps wouldn't have rule with his general assembly of that path i dot want to see us ?? course where it may not be a appropriate thing to do if we put this into a study group that legislatures involves that providers involves stake holders really know the issue we might decide a semi atomization appropriate we make them what to mix with the board of directors we are talking to day about issue that needs to be flushed out and when we are pointing about ?? very very quickly in the next 60 days before many days whatever that time frame may be it's far too quick it's far far too quick i think that's what we need to do and for that reasons may not comfortable what's in the bill like wise if we look back in the last two years ?? independent consultant bob one thing he was charged with doing was looking at the right path medicare we have ?? as the new medicare director he appreciated ?? systems what we heard was that might be the 10c what do we got a consultant involved and spend eight months traveling the state listening to medicare providers listening doctors listening ?? inputs of those that well stealth in knowledge that came out with a system of countable care organizations as a proposed model that proposes to the countable care organization based on the provider by which i have seen hospitals embraced me others is probable a preferred route for us to take countable care organizations we spent a lot of time trying to see what might be best trying to contain cost with a deadline that would be established for everything to be put in place that's a reasonable time frame for perhaps doing so i know that we look to what that would mean we would end up with the system that would indeed decrease our cost a system that would have the by ?? medicare's across the state and more importantly a systems we would feel perhaps comfortable with if for some reason that the countable care organization model doesn't work we can always deviate we an always move different direction we could always do something that would better outcome or result but if i thin about what we probably need to do at this ?? i don't believe that the bill currently proposed takes us in the right direction establishing an organization or independent department may not in fact be the right thing it may be increasing more ?? mat be creating problems that we don't anticipate we may find a significant legal obstacle in doing so we need to study it we need to figure this thing out because otherwise we could find ourselves traveling along the path intimating to create ?? outcome but instead finding up we have a situation that is gone worse not better more importantly if we really want to get everything in place then needs to be in place we need to focus on the staff ??,

staffing that brings in the accuraries and experts that can do the projections that are necessary to make certain that the program is sustainable, and that we minimize the losses that we have seen in recent years. For those reasons I cannot support this bill. [SPEAKER CHANGES] Further discussion or debate? Sen. Tucker, for what purpose do you rise? [SPEAKER CHANGES] To speak to the bill, Mr. President. [SPEAKER CHANGES] The Senator has the floor. [SPEAKER CHANGES] Thank you sir. I've been here since 2011, we've had 3 secretaries for Health and Human Services. I think a lot of the employees are conditioned with those many changes. We've had 4 Medicaid directors, so the employees are conditioned if they keep their head down long enough, this too shall pass. As far as Sen. Ford's expansion, and I can tell you what's expanded sir, since you've been here since I've been here, is the expansion of the Medicaid overruns. It's expanded since I've been here some $2 billion, and I'll submit to you that we as Republican majority did no better than the Democrat majority at control and cost in Medicaid. We have been here and been here and been here, Sen. McKissick. Sen. McKissick, we have spent, or the DHHS has spent 16 months on the road talking to docs, talking to hospitals, talking about the formation of the ACOs. I personally am in favor of the ACOs, even though they were derived out of Medicare and have very little experience. Whether you call it accountable or managed care, their drive is to reduce cost and to have better outcomes. As far as creating another state agency, it does put a spotlight on Medicaid. We can't duck the issues anymore. I've served on that board since I've been here, in the shadows of Sen. Hise and Sen. Pate and it is a very complex issue that I really don't have my arms around because there's 2 or 3 sources of money, there's multiple federal and state laws. It is very much an uncertainty of who and what get served here. So we've gone back ?? in a state now, and the MCO/ACO approach were bringing forward the holistic approach to communicating about each patient and what their outcome should be. Many don't agree with this bill, there's some things in here I don't like. But I don't think this Sen. McKissick will be done overnight, we will move forward prudently and expeditiously to get something done, but to have a board of professionals that are directed exactly to Medicaid, whether it be a Republican of Democrat administration, if we get a handle on Medicaid, then we can do other things. I don't like being placed in position every budget. Do I pay teachers or state employees, or do I fund the poor and their medical needs? That is not place for any of us to be. We don't want to be there, we've spent the money on Medicaid, the time for change is now. So I will have to support this bill and work with the doctors and the hospitals to improve it as we move forward. Thank you Mr. President. [SPEAKER CHANGES] Further discussion or debate? [SPEAKER CHANGES] Mr. President. [SPEAKER CHANGES] Sen. Van Duyn. What purpose do you rise. [SPEAKER CHANGES] I would like to speak on the bill. [SPEAKER CHANGES] Senator has the floor. [SPEAKER CHANGES] It's at times like this when I wish I could channel the oratory skills of my predecessor. This is something that I feel very very strongly about. I obviously have not had to deliberate with budgets as long as the rest of you have, this is my very first session. But I have been on the board of Health and Human Services at Bunkem county for some time now, and I worked as an affordable care navigator for 6 months. And when someone comes into your office that is broken or chronically ill and you can get them access to health care, it really changes how you think about things. Now I know the intention of the bill is to save money for the taxpayer and to improve the quality of healthcare for North Carolina. But I worry that we are throwing out years of work and we need to protect those parts of our system that are working. Medicaid is a safety net program, and what that means is enrolling is going to go up and down with the rise and fall of our economy. So part of the way we deal with that is by creating a reserve, and I congratulate the Senate for including a reserve for Medicaid in the budget, that's an important step. But we have to realize that we are not, for many North Carolinians we are still in difficult times. Yes, unemployment is improving, but the greatest sector, the fastest growing sector of jobs, is low paying jobs. Three out of ten North Carolinians make wages that are at or below the poverty level. So my point to you is at least some of that uncontrollable cost in Medicaid over the last several years has been because of the economy. Overruns are a result of an aging population and persistent hard times for too many of our, of our fellow citizens. Furthermore, due to the Affordable Care Act and the work of Community Care of North Carolina, we are actually bringing per person cost of Medicaid down. Community Care has painstakingly built an infrastructure, with the help of our physicians, that has saved North Carolina close to a billion dollars over the last four years. And how did they do that? By making us more healthy. By getting us access to regular care. This, to me, just sounds like a program that needs to be replicated, not defunded. My next point is that managed care is not a panacea. Kentucky and New York are reeling right now from the abrupt withdrawal of their MCOs, and Connecticut has traditioned away from managed care, claiming, quote, "Diminishing confidence in the value of what was provided." According to Mark McClellan, who was the head of the Senators for Medicaid and Medicare for George W. Bush; to be successful, we need to make serious investments in provider networks and support systems, so that we reform the way we deliver care. MCOs are not a quick fix. He goes on to say that managed care plans that have tried to keep costs down by eliminating coverage, although they reduce costs in the short-term, lead to higher costs in the long-term because they make people sick. Health care is a huge, complex problem. But what we do hear has ramifications, not just for Medicaid recipients, but for all of us who need to see a doctor or go to a hospital. Why in the world would we want to start from scratch when we have model programs that are saving the state money by helping make North Carolinians healthier? And what is the hurry? It seems to me that this bill is a smoke screen to keep us distracted from another real problem with the budget, one that we have not talked about at all, and that is the$5 million hole that was created, I'm sorry, by tax giveaways to corporations and to the wealthy. Now if you believe a revenue shortfall is a necessary evil on the way to prosperity, that's fine, but say so. Don't blame the shortfall on doctors in hospitals that are working to actually reform health care and that are absorbing the costs of indigent care because we failed to take the Medicaid expansion. Don't blame the shortfall on the blind, disabled, and the elderly. Don't blame the shortfall on award winning programs like Community Care of North Carolina that are actually saving the tax payer money. And by all means, don't blame pregnant women and the children of the working poor, that's just not right. Thank you Mr. President. [SPEAKER CHANGES] Further discussion or debate? [SPEAKER CHANGES] Mr. President. [SPEAKER CHANGES] Senator Rucho, what purpose? [SPEAKER CHANGES] Ask a question to Senator Hise. [SPEAKER CHANGES] Senator Hise do you yield? [SPEAKER CHANGES] Senator Hise, so that I can understand completely, the proposal that you're putting before us is actually going to establish some competition between the MCOs and the ACOs, so

And how we get a handle on it. I don't know. If you're a professor in the school of public health or the school of social work with international credentials you could probably be of some value advising this board or being on this deciding where health care policy is going to go. We preclude them, even though they are associated with an institution with UNC system, an institution with 10s of thousands of employees and 100s of thousands of students. We say, you're precluded because we've got this imaginary conflict that your knowledge doesn't matter. I think that that's one flaw. The other flaw I see in this bill, and I told Mark to congratulate Senator Brown as a lead negotiator on the Senate budget. When I first saw the reserve put in there for Medicaid I thought it was one of the most sensible things that we had done, because Lanier Chancellor, who was Secretary of Health and Human Services, told us three years ago, or four years ago, whenever it was. That when we put the budget that we did on Medicaid, that he could not bring Medicaid in, within that budget. Lanier served with me in the House, good Republican, very truthful, and he said he cannot bring the Medicaid budget in where you set it. Then, we seem shocked and surprised when they exceed the budget the budget that we set. He told you going in it was at least $300 Million dollars more than what we were budgeting and he would do everything in his power. So, predictability is dependent on whether you realistically set the amount that you were expecting to spend. That's why I congratulate Senator Brown and the budget chairs for putting that amount in. I think you think you probably should of been a little more stubborn and keeping it up at the level it was at without reducing it, because it will still come in above that level. But, let me say this in conclusion, we're thinking and may have already set up the board to advise the treasurer on investments. She invests$70 or $80 Billion dollars, I think that's what the retirement fund is now.$70 or $80 Billion dollars and we want experts to be the advisor and help make decisions on how that$70 or $80 Billion dollars is invested. We want experts in business to be part of this board that will govern the Medicaid system. Those three gentlemen I mentioned, as well as the type flight professors and participants at these schools across North Carolina are national experts. You look at their credentials , they serve on the boards of the biggest, most powerful corporations in the United States and helped set policy, and they're unable to help us here in North Carolina with all that expertise. But, when we look at what Lanier was able to do with the money that we gave him, we really ought to be somewhat proud of the efforts that were made by him in that administration. I will tell you that whenever every medical group that I'm aware of, in addition to these gentlemen that I just talked about-- There's a medical group in North Carolina, tells me that their experience and their study shows that TCNC, Community Care of North Carolina, is the kind of direction we ought to go in, it says a lot to me, because they know a lot more about this than I do. When the doctors tell me that they're doing the same thing with their privately insured patients that they would do with Medicaid patients, and more doctors in North Carolina are providing services to Medicaid patients more than most of the other states. Having ACO, accountable care organizations, is a way of insuring that they will still deliver those services at a much higher percentage in North Carolina than most other states to Medicaid patients, than I take note. All of the experts, that I rely on say, this is not the way that we should be going in reforming Medicaid. Nevermind my limited knowledge, nevermind my wisdom on these subjects, I'm more inclined to believe those experts than I am us, who do it on emotion rather than all of the facts that they've considered. I would suggest that the concept of reforming Medicaid is a great ...one that we need to continue to pursue, but we ought to take a moment and listen to the doctors, to the hospitals in North Carolina. All of them have come and told us not to do it the way that we're trying to do it in this bill. And, these experts who have worldwide experience on how to get a handle on this. So I hope you'll vote against this bill. [SPEAKER CHANGES] Senator Van Duyn has an excused absence for the remainder of the session. Senator Brown, for what purpose do you rise? [SPEAKER CHANGES] To speak briefly, on the bill. [SPEAKER CHANGES] The Senator has the floor. [SPEAKER CHANGES] Senator Blue, I'm like you, I'm sure not a pro in this, and it's a complicated issue. And, it's a -- it's a -- probably the toughest issue we deal with every year. A few things I do want to touch on. I know Senator Hise and Senator Pate have been working on this issue for over a year, and I've been a little bit involved in some of the work that they've been doing. And I can tell you that we have sat down with Bill Roper, and Dave Herman, and the gentleman at Cape Fear Valley, and several other major people as we've tried to figure out the direction to take reforming Medicaid in this state. And, actually we've met with those folks on many occasions to try to figure this out because it is so complicated and gotten a lot of input on what a new organization might want to look like. And have tried to incorporate a lot of those thoughts into what this bill looks like today. And again, this bill is probably not a perfect bill--I think we've all kind of admitted that today. This bill's probably got a long way to go before it's finalized, as we continue to talk to administrators and doctors, and providers to continue trying to make it the best bill we can make it before final passage. But there's just several facts, and I think we all know it. And, I'm not going to touch on them long, but in the past ten years Medicaid costs for the state has grown from less than two billion to over--to about three and one half billion--about a 75% increase--ten years. And if you compare it to education, which is the piece which is probably the most important to us in so many ways, that piece of the budget has only grown about 25%. So you can see what the investment in Medicaid has been over the past ten years compared to the other key piece of our budget, which is education, of only 25%. If we look at our plan in North Carolina, we have a great plan. I understand why people want to come to North Carolina, especially for healthcare--we've got some of the best in the world. It's a great place to be. Our Medicaid plan is one of the best in the nation, no question. Our eligibility piece of it is probably the best in the southeast--one of the best in the nation. We cover more things in our Medicaid plan than most do. And that's probably a good thing, if you can banish costs along with it. And, I think that's been the problem we've had. You know, moving forward, we gotta [sic] get some predictability; it's--and Senator Blue I think you're exactly right--I think during the recession in particular, trying to put budgets together, we probably underfunded Medicaid. Because, it was the easiest piece probably to underfund and then you come back--you know--a year later and say why have we got a 300 million dollar shortfall? Well, we didn't plan it right to start with. But it--it's just growing at such a pace, it is absolutely--has absolutely killed our budget. Again, you know, look at JPS. We've cut it to the bone; there's no other cuts there. Education, we haven't been able to do what we want to do. [??] we've made cuts, [??]gov we've made cuts; it's just something we have to get our hands around is the cost of Medicaid. And, I--again, I want to thank Senator Hise and Senator Pate for the time they've put into this. I think you can see when they stand up and speak, just how in-depth they've gotten in trying to understand this issue. I mean, I think Senator Hise can talk about Medicaid in his sleep, because he's dug into it so much, he understands it probably better than anybody in here. But that's what it takes to try to understand it and figure it out. I would just tell you, we'll--we'll continue to work on this bill as it moves forward, we'll continue to talk to administrators and doctors and providers, but reform is needed in this state. And it's a bold step, and something we've gotta [sic] do, and I think today is the first step of that. And we need to move it forward; and again continue to work on it and make it the best we can be. So I ask you to vote for this bill. [SPEAKER CHANGES] Further discussion or debate? Hearing none, the question before...[end of data] Senate, is the passing of House Bill 1181 on its second reading. All those in favor will vote aye. Those against will vote nay. You have five seconds for the vote, the clerk will record the vote. 28 having voted in the affirmative, 17 in the negative. House Bill 1181 passes its second reading and Senator Ford objects. Senator Ford, give me an objection please. Senator Ford give me an objection on the mic, please. The third reading, it will remain on the calendar. [SPEAKER CHANGE] Object the third reading. [SPEAKER CHANGE] Thank you, Senator Ford. Okay, that brings us to Conference Report for adoption, Senate Bill 793. Senator Tillman's recognized. Oh, the clerk will read, sorry. [SPEAKER CHANGE] Senate Bill 793, Charter School Amendments. [SPEAKER CHANGE] Senator Tillman has the floor, explain. [SPEAKER CHANGE] Thank you, Mr. President. This bill has been worked since, well when we first started the charter legislation. This is a cumulation of a lot of things that needed to be caught up with the rules in the processes, and that's basically what we have here. The bill analysis gives you a pretty good idea of what changes have been made and so forth. We've got all the [??] on the Senate side signed off, and I believe the House side has everybody, but one. I'd ask for your support of this conference report. [SPEAKER CHANGE] Further discussion or debate? [SPEAKER CHANGE] Mr. President? [SPEAKER CHANGE] Senator McKissick, what purpose do you rise? [SPEAKER CHANGE] To ask Senator Tillman a question. [SPEAKER CHANGE] Senator Tillman do you yield? [SPEAKER CHANGE] I would, Sir. [SPEAKER CHANGE] Could you refresh my recollections about the basic contents of this bill, if you would, Sir? [SPEAKER CHANGE] Well, the bill covers a lot of ground, but if you want to check your digest it will give you a summation of the changes that have been made and agreed upon by the House. I can go through them, or you can look at them and see if you have a particular question. [SPEAKER CHANGE] If you could just-- Mr. [??], follow up? [SPEAKER CHANGE] Follow up, Sir. [SPEAKER CHANGE] If you could just briefly summarize, it would help, Sir. [SPEAKER CHANGE] All right, we can renew charters for up to 10 years, we now have a fast track legislation that will be included in this bill. We changed some dates on the reporting to give more time for the Charter Advisory Board and State Board of Education to review these applications. We've tightened the application process up and having a review process, and having some time for an appeal, if you don't like the decision. Rather than no appeal and simply getting a letter. We're saying you can add a grade if you want to. If you've got five performances that adequate over the last three years you can even add a grade to the lower end, if you've got middle grades, that was not in the legislation. This and some of the other minor changes. [SPEAKER CHANGE] Thank you. [SPEAKER CHANGE] Further discussion or debate? Hearing none-- [SPEAKER CHANGE] Mr. President? [SPEAKER CHANGE] [??] Lauren, what purpose do you rise? [SPEAKER CHANGE] See if the Senator, gentleman would yield to a question, please. [SPEAKER CHANGE] Do you yield? [SPEAKER CHANGE] Yes, Sir, Senator. [SPEAKER CHANGE] Thank you, Senator Tillman. Just trying to look through this real quick. There was an issue about transparency of salaries, etc. Is that addressed in this bill, because that's important. Our citizens have said to me over and over again, if you're paid by public funds, than that salary ought to be of public record. Anybody ought to be able to recognize that, so I just ask you that question, if you could-- [SPEAKER CHANGE] Good question. I was certainly expecting that one, so yes. If you are employed by the charter school, here before you did not have reveal salaries of anyone, but now as is required by public schools, you have to reveal the name and the salary of your employees. To the charter schools point of view, they're paid different, they already pay on merit and when they have that Suzy, who has only been there five years is making$10,000 more than Jane, who's been there fifteen years it does present a moral problem. We do have look at that, and we may have to look at that when we go merit pay for the public schools. But, yes, right now fully transparent. [SPEAKER CHANGE]j Further discussion or debate? Question before the Senate is the adoption of the conference report for Senate Bill 793. All those in favor of adopting will vote aye, those against vote nay. Five seconds for the vote, clerk will record the vote. 45 have voted in the positive and none in the negative, conference report for Senate Bill 793 is adopted and the House will be so notified.