RALEIGH, N.C. (AP) -- Valerie Harper of Wilson knows the budget problems facing North Carolina's Medicaid office. But the 50-year-old former day care worker with cerebral palsy can't understand why state regulators would want to reduce the personal care services that bring a woman to her house six times a week to help her stay bathed and fed, and help her into her Sunday best so Harper's sister can drive her to church.
Harper fears she may end up in a nursing home, and that would cost the government up to four times as much.
"The older I get, the worse I get. I can't clean my house on my own or get dressed on my own," said Harper, who added it can take an hour to tie her shoes by herself. "It really is embarrassing for me ... so this helps me keep my confidence up."
But state Medicaid leaders are in a fiscal bind. North Carolina's share of the $10 billion federal-state health care program for poor families, senior citizens and the disabled -- is on track to spend $250 million more than budgeted this year despite the Legislature's demands to cut more than $500 million from the Medicaid agency.
The shortfall will only worsen unless they scrutinize more vigorously the amount of personal care services received by more than 37,000 people like Harper. The state already has spent 4 percent more than the $188 million annual budget for personal care service in just the first six months of the fiscal year, even after regulators cut payment rates to companies that provide the services.
"What we're trying to do is make certain that we pay for the services that are clinically appropriate and necessary and stop paying for services that may be something someone wants but is not something someone needs," state Health and Human Services Secretary Lanier Cansler told lawmakers recently.
The industry association representing the service providers argues the plan from the state Division of Medical Assistance could reduce service hours for many patients by 40 to 50 percent.
Up to 3,000 people could completely lose those services, according to attorneys. Some patients could try to live on their own again, with dangerous results, said Kim Hill, president and owner of Action Health Staffing in Wilson, which provide in-home personal care services for 160 patients.
"You're going to see patients die," Hill said. "What is being proposed is going to do irreparable harm."
Such warnings have set the tone for a legal tussle between the division, which runs the state Medicaid program, and the Association for Home and Hospice Care of North Carolina. An administrative law judge heard several days of testimony over a new state method to determine the number of hours a month that a patient should get from a nurse's aide.
The industry argues the state didn't follow the General Assembly's instructions in the budget law and will hurt patients and lay off workers. The state defends the plan, designed to meet the Legislature's demand to reduce state spending for personal care benefits by $40 million this year and $60 million next year.
A Medicaid patient qualifies for help if they have trouble performing at least two of six "activities of daily living," such as dressing, eating, going to the bathroom and getting out of a chair. With a doctor's OK, a registered nurse fills out a form to assess the patient and determine how much help is needed. The current maximum is 60 hours per month.
State regulators recently asked personal care service providers to turn in those forms. An analysis of 5,800 recipients showed patients requiring limited assistance were still receiving 50 to 55 hours a month.
"We have learned of many instances where recipients are quite simply not qualified to receive the services they are currently receiving," Cansler wrote Jan. 19 to General Assembly members.
The state now wants a third party, rather than the service provider, to decide how many hours are required. People denied services or facing a reduction can keep their current level of services while they appeal, Cansler said.
"The number of hours that any recipient is given now depends entirely on who their provider is, and it ought not to be that way," special deputy attorney general Belinda Smith told Administrative Law Judge Don Overby, who could rule this week whether the plan can go forward.
Industry officials argue half the providers are still losing money on the average patient, which costs the state $750 per month. And the amount is still inexpensive compared to more than $3,000 a month for a nursing home patient or $1,800 for an adult care home resident.
Adult care homes, whose residents include people with chronic health problems, Alzheimer's disease or mental illness, also provide personal care services for Medicaid patients at a loss of more than $10 per day in 2008, according to the North Carolina Association of Long Term Care Facilities.
"It really is making it difficult to give that quality care that our patients deserve," said Hugh Campbell of Wilmington, who runs two assisted living centers.
Cansler has said he understands that this year's Medicaid cuts could result in some service providers going out of business. But he said the state has few options to control Medicaid costs beyond rooting out waste in the system. Lawmakers acknowledge Cansler has a tough job.
"I don't think there's any intention to cutting services off for people who really need them," said Sen. Bill Purcell, D-Scotland, co-chairman of the Senate budget health subcommittee.
