MEDICAID FUNDING ACT (NEW).

View NCGA Bill Details2019-2020 Session
Senate Bill 808 (Public) Filed Tuesday, May 19, 2020
AN ACT APPROPRIATING FUNDS FOR THE DOROTHEA DIX CAMPUS RELOCATION PROJECT AND FOR NORTH CAROLINA FAMILIES ACCESSING SERVICES THROUGH TECHNOLOGY (NC FAST); APPROPRIATING CORONAVIRUS RELIEF FUNDS FOR BEHAVIORAL HEALTH AND CRISIS SERVICES, EARLY CHILDHOOD INITIATIVES, AND COVID-19 TESTING, CONTACT TRACING, AND TRENDS TRACKING AND ANALYSIS; APPROPRIATING FUNDS FOR THE OPERATION OF THE NORTH CAROLINA MEDICAID PROGRAM AND THE IMPLEMENTATION OF MEDICAID TRANSFORMATION; AND MAKING MEDICAID TRANSFORMATION-RELATED CHANGES.
Intro. by Brown, Harrington, B. Jackson.

Status: Re-ref to Appropriations/Base Budget. If fav, re-ref to Rules and Operations of the Senate (Senate action) (May 20 2020)

SOG comments (2):

Long Title Change

The Senate committee substitute to the 1st edition amends the act's long title. The previous title was: AN ACT TO APPROPRIATE FUNDS FOR THE IMPLEMENTATION OF MEDICAID TRANSFORMATION AND TO MAKE OTHER NECESSARY MEDICAID TRANSFORMATION-RELATED CHANGES.

Long title change

House committee substitute to the 4th edition changed the long title. Previous long title was AN ACT APPROPRIATING FUNDS FOR THE DOROTHEA DIX CAMPUS RELOCATION PROJECT AND FOR THE CHILD WELFARE CASE MANAGEMENT COMPONENT OF NORTH CAROLINA FAMILIES ACCESSING SERVICES THROUGH TECHNOLOGY (NC FAST); APPROPRIATING CORONAVIRUS RELIEF FUNDS FOR BEHAVIORAL HEALTH AND CRISIS SERVICES; APPROPRIATING FUNDS FOR THE OPERATION OF THE NORTH CAROLINA MEDICAID PROGRAM AND THE IMPLEMENTATION OF MEDICAID TRANSFORMATION; AND MAKING MEDICAID TRANSFORMATION-RELATED CHANGES.

S 808/S.L. 2020-88

Bill Summaries:

  • Summary date: Jul 2 2020 - More information

    AN ACT APPROPRIATING FUNDS FOR THE DOROTHEA DIX CAMPUS RELOCATION PROJECT AND FOR NORTH CAROLINA FAMILIES ACCESSING SERVICES THROUGH TECHNOLOGY (NC FAST); APPROPRIATING CORONAVIRUS RELIEF FUNDS FOR BEHAVIORAL HEALTH AND CRISIS SERVICES, EARLY CHILDHOOD INITIATIVES, AND COVID-19 TESTING, CONTACT TRACING, AND TRENDS TRACKING AND ANALYSIS; APPROPRIATING FUNDS FOR THE OPERATION OF THE NORTH CAROLINA MEDICAID PROGRAM AND THE IMPLEMENTATION OF MEDICAID TRANSFORMATION; AND MAKING MEDICAID TRANSFORMATION-RELATED CHANGES. SL 2020-88. Enacted July 2, 2020. Effective July 2, 2020, except as otherwise provided.


  • Summary date: Jun 25 2020 - More information

    House amendment makes the following changes to the 5th edition.

    Part III

    Section 3B

    Adds the requirement that the State Controller transfer $100 million in nonrecurring funds for 2020-21 from the Coronavirus Relief Reserve to the Coronavirus Relief Fund. Further amends Section 3.3(35) of SL 2020-4 by increasing the amount that is to be used by the Department of Health and Human Services for initiatives for COVID-19 testing, contact tracing, and trends tracking and analysis from $100 million to $125 million.


  • Summary date: Jun 24 2020 - More information

    House committee substitute makes the following changes to the 4th edition.

    Part II

    Adds the following.

    Directs the State Controller to transfer $26.4 million in nonrecurring funds for the 2020-21 fiscal year from the Medicaid Transformation Reserve to the Department of Health and Human Services (DHHS), Division of Central Management and Support, for operations and maintenance expenses for the NC Families Accessing Services Through Technology (NC FAST) system and investment in infrastructure modernization, document management, and other critical NC FAST projects.

    Adds a new directive requiring the Division of Central Management to report any change in federal funding or federal match rates within 30 days after the change to the specified NCGA committees and division.

    Makes a technical change.

    Maintains the Part's effective date of July 1, 2020.

    Part III

    Makes organizational and clarifying changes.

    Adds the following.

    Directs the State Controller to transfer $20 million in nonrecurring funds for the 2020-21 fiscal year from the Coronavirus Relief Reserve to the Coronavirus Relief Fund (both established in SL 2020-4). Appropriates the transferred funds to the Office of State Budget and Management (OSBM) for 2020-21 to be allocated to DHHS, Division of Child Development and Early Education, for early childhood initiatives to assist in mitigating the financial impact due to the COVID-19 pandemic. 

    Amends Section 3.3 of SL 2020-4, increasing the allocation OSBM must make to DHHS from $25 million to $100 million to expand public and private initiatives for COVID-19 testing, contact tracing, and trends tracking and analysis. Adds to the nonexclusive list of uses (1) periodic COVID-19 testing for surveillance and occupational safety, particularly but not exclusively with respect to long-term staff working in congregate living settings and historically underserved or at-risk populations and (2) hiring temporary staff to augment contact tracing functions performed by local health departments, particularly those serving historically underserved or at-risk populations.

    Part VI

    Eliminates the previous provisions of Part VI which required county departments of social services to take specified actions regarding redetermination of Medicaid eligibility within 60 days of the nationwide declaration of a public health emergency. Replaces the provisions with the following.

    Directs county departments to: (1) resume Medicaid eligibility determinations for beneficiaries whose annual or periodic renewal of eligibility is due on or after September 1, 2020; (2) resume requesting post-eligibility verification information for applications received on or after September 1, 2020; (3) make a good faith effort to redetermine Medicaid eligibility for beneficiaries who were due for an annual or periodic renewal of eligibility prior to September 1, 2020, but for whom recertification did not occur; and (4) make a good faith effort to request post-eligibility verification information for applications received prior to September 1, 2020, for which post-eligibility verifications have not been requested. 

    Prohibits county departments from terminating benefits for a Medicaid beneficiary if doing so would result in the State being ineligible for the increased Medicaid funding under specified federal law, but requires such cases to be identified in the NC FAST system by July 31, 2020. Requires notices of termination for such identified cases within 90 days after the expiration of the nationwide declared public health emergency.

    Provides that county authority to comply with a court order or settlement agreement are not affected.

    Adds that the provisions apply to any federally recognized Native American tribe that has assumed responsibility for the Medicaid program.

    Part VII

    Eliminates the proposed directive requiring the Division of Health Benefits to make specified monthly payments to prepaid health plans if the required Medicaid capitated payments do not begin by July 1, 2021. 

    Now directs DHHS to amend the statewide and regional standard benefit plan prepaid health plan capitated contracts awarded as of June 1, 2020, so that the contract covers four-year terms rather than three-year terms, with the option to extend the contract for up to one successive contract year or a shorter period as required by DHHS. Provides that if any prepaid health plan declines this contract amendment in writing, then the contract amendment cannot be required and the contract terms remain in effect as of June 1, 2020, until and unless amended by a future agreement.

    Changes the act's long title.


  • Summary date: Jun 22 2020 - More information

    House committee substitute makes the following changes to the 3rd edition.

    Part VII. Medicaid Transformation Necessities

    Section 15.1

    Modifies the definition given for the term State's annual Medicaid payment as used in proposed Article 7A, Hospital Assessment Act, GS Chapter 108A. Now sets the base annual amount at $110 million, rather than $120 million, for the taxable year October 1, 2020, through September 30, 2021.

    Reduces the base assessment and supplemental assessment rates set under new GS 108A-141 for the taxable year October 1, 2020, through September 30, 2021, now setting the base assessment rate at 1.94% (was 2.04%) and the supplemental assessment rate at 2.14% (was 2.32%).


  • Summary date: Jun 16 2020 - More information

    Senate amendment makes the following changes to the 2nd edition.

    Increases by $50 million the amount of funding transferred from the Medicaid Transformation Reserve to the Medicaid Transformation Fund in the General Fund; funding increased from $19,420,000 to $69,420,000. Makes conforming increase to the coordinating provision authorizing a transfer of up to $69,420,000 to the Division of Health Benefits for qualifying needs related to Medicaid Transformation.

    Increases the cap on total requirements for a State share from $63,120,000 to $270,000,000.

    Makes a technical change.


  • Summary date: Jun 10 2020 - More information

    Senate committee substitute makes the following changes to the 1st edition.

    Makes organizational changes to existing content. Modifies existing content and adds new content as follows.

    Part I

    Transfer $15 million in nonrecurring funds from the General Fund to the State Capital and Infrastructure Fund, and appropriates the transferred funds to the Office of State Budget and Management (OSBM) for 2020-21 to be allocated for the Dorothea Dix campus relocation project with the Department of Health and Human Services (DHHS). Directs the Department of Administration to collaborate with DHHS to select land in Wake County suitable for the relocation project, with the appropriated funds to be used for planning expenses. Effective July 1, 2020.

    Part II

    Appropriates $6,154,480 in nonrecurring funds from the General Fund to DHHS, Division of Central Management and Support for 2020-21 for updates and changes to the child welfare case management component of the NC Families Accessing Services through Technology (NC FAST) system, as specified. Effective July 1, 2020.

    Part III

    Directs the State Controller to transfer $50 million from the Coronavirus Relief Reserve to the Coronavirus Relief Fund (both established in SL 2020-4), and appropriates the transferred funds on a nonrecurring basis to OSBM for 2020-21 to allocated to DHHS, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services (DMH/DD/SAS) for distribution LME/MCOs to fund behavioral health and crisis services in response to the COVID-19 pandemic at the discretion of DMH/DD/SAS. Makes the general provisions set out in Part I of SL 2020-4 applicable to the appropriated funds and requires OSBM to include the funds transferred and appropriated in the report required under Section 1.7 of SL 2020-4. Effective July 1, 2020.

    Part IV

    Explicitly prohibits DHHS, Division of Health Benefits (DHB) from transferring any amount of the certified Medicaid budget surplus calculated for 2019-20 to DMH/DD/SAS for allocation to LME/MCOs to offset any reduction in single-stream funding. Effective June 30, 2020.

    Part V

    Requires described funds received by DHB during 2019-20 due to the acceleration of the federal 2019-20 MRI/GAP Plan to remain available and used for the Medicaid Program for the 2020-21 fiscal year. Effective June 30, 2020.

    Appropriates from the General Fund to DHB $1.4 million in nonrecurring funds for 2020-21 for the implementation of an electronic visit verification (EVV) system for personal care services and home health services under the Medicaid program. 

    Provides for the following funding for Medicaid and NC Health Choice programs rebase.

    Requires $30 million in nonrecurring funds of the funds appropriated to DHB for 2019-20 and the funds appropriated in Part V of the act to remain available to be used for the Medicaid and NC Health Choice programs rebase in the 2020-21 fiscal year. Effective June 30, 2020.

    Directs the State Controller to transfer $84 million from the funds available in the Medicaid Transformation Reserve to DHB for 2020-21 to be used for Medicaid and NC Health Choice programs rebase. Deems these funds appropriated for the stated purpose.

    Directs $136 million in nonrecurring funds to be transferred from the Medicaid Contingency Reserve to DHB for 2020-21 to be used for the Medicaid and NC Health Choice programs rebase. Deems funds appropriated for the stated purpsoe.

    Appropriates $213 million from the General Fund to DHB for 2020-21 to be used for the Medicaid and NC Health Choice programs rebase.

    Effective July 1, 2020, except as otherwise provided.

    Part VI

    Directs every county department of social services and any federally recognized tribe that has assumed responsibility for the Medicaid program to take the following actions within 60 days after expiration of the declared nationwide public health emergency as a result of COVID-19: (1) redetermine Medicaid eligibility for all beneficiaries whose eligibility was continued by federal law but were due for renewal of eligibility, experienced a change in circumstance affecting eligibility, or post-eligibility verification information affected eligibility; and (2) provide notice to beneficiaries determined ineligible as a result of such redetermination.

    Part VII

    Contains the substantive content of the 1st edition, with the following modifications and additions.

    Section 7

    Amends Section 3 of SL 2015-245, as amended, to require capitated contracts to begin no later than July 1, 2021, rather than January 1, 2021.

    Provides that if the capitated payments do not begin on July 1, 2021, DHB must make the following monthly payments to prepaid health plans (PHPs) for each full month after June 30, 2021, that the payments have not been paid. Requires $4 million to each PHP that has been awarded a statewide benefit plan PHP capitated contract as of June 1, 2020, and a prorated amount of $4 million to each PHP that has been awarded a regional standard benefit plan PHP capitated contract as of June 1, 2020, based upon the number of regions contracted to serve. Excludes months in which capitation payment failure after July 1, 2021, is caused by the PHP.

    Eliminates the previous appropriations provisions regarding funding for the Medicaid and NC Health Choice programs rebase and contracts, personnel, and projects relating to transitioning to Medicaid managed care.

    Section 8

    Modifies the required transfers of unspecified amounts for Medicaid transformation. Now requires the State Controller to transfer $19.42 million from funds in the Medicaid Transformation Reserve to the Medicaid Transformation Fund (Transformation Fund), and allows the sum to be transferred to DHB on a nonrecurring basis for 2020-21, as qualifying needs arise, for the sole purpose of providing the State share for qualifying needs directly related to Medicaid transformation. Adds provider experience as a qualifying need, and no longer includes other nonrecurring needs identified by DHB as a qualifying need. Now requires OSBM to verify that the amount DHB requests provides a State share that does not result in a total requirement exceeding $63,120,000 for 2020-21 (was, $140 million). 

    Adds that the Section is effective July 1, 2020.

    Section 11

    Sets the rate floor for durable medical equipment under managed care at 100% of the Medicaid fee-for-service for durable medical equipment for the first three years of the initial standard benefit plan prepaid health plan capitated contracts required under Article 4 of GS Chapter 108D.

    Section 12

    Makes clarifying changes regarding services that DHHS may contract with IMCE/IHCPs to provide Medicaid and NC Health Choice beneficiaries.

    Section 13

    Changes the effective date of the previously described changes to the supplemental payment program for eligible medical providers from January 1, 2021, to July 1, 2021.

    Changes the effective date of the proposed repeal of Section 12H.13(e) of SL 2013-360, which reduced the percentage of allowable costs for hospital payments from 80% to 70%, and Sections 12H.13(b) and 12H.13A of SL 2014-100, which set the settlement for outpatient Medicaid services performed by UNC Hospitals and Vidant Medical Center at 70% of costs, from January 1, 2021, to July 1, 2021.

    Section 15.1

    Changes the effective date of the proposed repeal of Article 7 of GS Chapter 108A, Hospital Provider Assessment Act, from January 1, 2021, to July 1, 2021. 

    Makes the following modifications to the specified assessments and payments required under Article 7 of GS Chapter 108A due prior to the Article's repeal. For the annual period beginning October 1, 2020, requires calculation of the equity payment amount and the UPL payment amount required by GS 108A-124 to exclude services rendered after June 30, 2021, rather than December 31, 2020. 

    Changes the effective date of proposed new Article 7A, Hospital Assessment Act, in GS Chapter 108A, from January 1, 2021, to July 1, 2021.

    Changes the definition given for the State's annual Medicaid payment, now calculated at a base of $120 million for the taxable year October 1, 2020, through September 30, 2021, rather than $110 million.

    Regarding required transfers from hospitals exempt from both the base and supplemental assessments that (1) make an intergovernmental transfer to the DHHS to be used to draw down matching federal funds and (2) has acquired, merged, leased, or managed another hospital on or after March 25, 2011, modifies the partial year formula set out for calculating the required amount to now require, for the period beginning July 1, 2021, rather than January 1, 2021, and ending September 30, 2021, dividing one-fourth of the amount of the State's annual Medicaid payment (was, three-fourths) by the amount collected under the base assessment.

    Requires total hospital costs to be calculated based on the Hospital Cost Report Information System's 2017, rather than 2016, cost report data available through CMS for the taxable year October 1, 2020, through September 30, 2021.

    Changes the base and supplemental assessment percentage rates to be used pursuant to new GS 108A-142 and GS 108A-141 for the taxable year October 1, 2020, through September 30, 2021, at a base assessment rate of 2.04% (was 1.77%) and a supplemental assessment rate of 2.32% (was 2.26%). Restricts imposition of the base assessment rate and the supplemental assessment rate to the months beginning on or after July 1, 2021, rather than January 1, 2021, with the assessment imposed from the period July 1, 2021 (was January 1, 2021), through September 30, 2021, to be one-quarter, rather than three-fourths, of the assessment amount that would have been imposed for the full taxable year.

    Postpones the sunset of the authority granted to the the State Controller to transfer funds from the Medicaid Contingency Reserve to DHB upon request and as needed to cover any shortfall of receipts from the supplemental or base assessments under new GS 108A-141 and GS 108A-142, from June 30, 2021, to June 30, 2022.

    Section 18

    States the NCGA's intent to enact legislation before the start of the 2021-22 fiscal year, rather than to amend Section 2.3(b) of SL 2019-242, to reflect changes to the handling of nontax revenue in the NC Medicaid program in a managed care environment.

    Part VIII

    Contains the general provisions set forth in previous Part I of the act.

    Changes the act's titles.


  • Summary date: May 20 2020 - More information

    Part I

    Reenacts and incorporates by reference the State Budget Act, GS Chapter 143C.

    Deems departmental receipts appropriated for the 2020-21 fiscal year to implement the act.

    Provides for the continued validity of 2019 legislation appropriating funds to State entities covered by the act unless expressly repealed or amended.

    Part II

    Amends Section 3 of SL 2015-245, as amended, to require capitated contracts to begin no later than January 1, 2021 (was, begin eighteen months after the date that CMS approves the 1115 demonstration waiver request submitted as required by the act on June 1, 2016). Makes conforming changes.

    Part III

    Appropriates from the General Fund to the Department of Health and Human Services (DHHS), Division of Health Benefits (DHB), (1) an amount sufficient in recurring funds for 2020-21 to be used for the Medicaid and NC Health Choice programs rebase and (2) an amount sufficient in recurring funds for 2020-21 for contracts, personnel, and projects relating to transitioning to Medicaid managed care.

    Part IV

    Requires the State Controller to transfer a sufficient sum for the nonrecurring Medicaid transformation needs in the 2020-21 fiscal year from funds in the Medicaid Transformation Reserve to the Medicaid Transformation Fund (Transformation Fund).

    Allows funds from the Transformation Fund to be transferred to DHB to pay claims related to services billed under the fee-for-service payment model for recipients being transferred to managed care. Allows funds to be transferred to DHB as the need arises instead of a lump sum. 

    Allows nonrecurring funds for 2020-21 from the Transformation Fund to be transferred to DHB to provide the State share for nonrecurring qualifying needs directly related to Medicaid transformation. Limits qualifying need to information technology, time-limited staffing, and contracts related to the seven specified Medicaid transformation needs. Allows funds to be transferred as the need arises instead of a lump sum.

    Sets out the process under which DHB is to request the transfer of funds. Requires the Office of State Budget and Management to verify that (1) the requested amount is to be used for a nonrecurring qualifying need in the 2020-21 fiscal year and (2) the requested amount provides a State share that will not result in a total requirement exceeding $140 million in nonrecurring funds for 2020-21 fiscal year.

    Requires any federal funds received in any fiscal year by DHB that represents a return of State share already expended on a qualifying need be deposited into the Transformation Fund. 

    Part V

    Repeals Section 12H.12(b) of SL 2014-100 (which replaced the individualized base rates for hospital inpatient services under the Medicaid and NC Health Choice programs with a specified single statewide base rate for hospital inpatient services) and Section 12H.23 of SL 2015-241, as amended (which prohibited Medicaid providers from receiving reimbursement for Graduate Medical Education (GME) in addition to their DRG Unit Value rate).

    Part VI

    Requires DHHS to ensure that the existing DHHS Customer Service hotline is responsive to questions posed by beneficiaries, providers, or the general public related to the rollout of Medicaid Transformation.

    Part VII

    Allows DHHS to contract with an Indian managed care entity (IMCE) or Indian health care provider (IHCP) to assist in providing health care or related services to Medicaid or NC Health Choice beneficiaries who are members of federally recognized tribes or eligible to enroll in an IMCE. Sets out requirements for such contracts, including examples of allowable services. Allows coverage provided by the IMCE or IHCP to be more permissive, but no more restrictive, than Medicaid or NC Health Choice coverage policies adopted or amended by DHHS; however, requires coverage to be in compliance with federal law.

    Amends GS 108D-40 to exclude from required coverage by capitated PHP contracts eligible recipients enrolled in a DHHS contracted Indian managed care entity. Makes conforming changes to GS 122C-115. Authorizes DHHS to seek approval from CMS and submit any necessary State Plan Amendments and waivers, or any amendments thereto, to implement this section.

    Part VIII

    Requires DHHS to revise the supplemental payment program for eligible medical providers. Effective January 1, 2021, the following two changes to the program must be implemented: (1) the program must no longer utilize a limit on the number of eligible medical professional providers that may be reimbursed through the program, and must instead use a limit on the total payments made under the program and (2) payments under the program must consist of supplemental payments that increase reimbursement to the average commercial rate under the State Plan and directed payments that increase reimbursement to the average commercial rate under the managed care system.

    Requires that the limitation on total payments made under the Average Commercial Rate Supplemental and Directed Payment Program for eligible medical professional providers apply to the combined amount of payments made as supplemental payments under the State Plan and payments made as directed payments under the managed care system and must be based on the amount of supplemental payments made during the 2018-2019 fiscal year as specified depending on when services were provided. 

    Requires DHHS to limit the total amount of supplemental and directed payments that may be received by the eligible providers affiliated with East Carolina University Brody School of Medicine and the University of North Carolina at Chapel Hill Health Care System. Provides that average commercial  rate supplemental payments and directed payments must not be made for services provided in Wake County. 

    Prohibits DHHS from making any modifications to the supplement program except as authorized.

    Repeals Section 12H.13(e) of SL 2013-360, which reduced the percentage of allowable costs for hospital payments from 80% to 70%, and Sections 12H.13(b) and 12H.13A of SL 2014-100, which set the settlement for outpatient Medicaid services performed by UNC Hospitals and Vidant Medical Center at 70% of costs. Effective January 1, 2021.

    Part IX

    Enacts GS 143C-4-11, establishing the Medicaid Contingency Reserve to be used for budget shortfalls in Medicaid or NC Health Choice programs. Sets forth three criteria that must be met in order for funds from the Medicaid Contingency Reserve Fund to be allocated or expended, including a legislative appropriation, verification of appropriate use of receipts by the State Controller, and immediate reporting of the shortfall by the Director of Budget to the Fiscal Research Division, as specified. Specifies that gubernatorial authority is not limited by the statute.

    Part X

    Repeals Article 7 of GS Chapter 108A, Hospital Provider Assessment Act, effective January 1, 2021. Provides a savings clause for the rights and liabilities of the State, a hospital subject to the equity or UPL assessment, or any other person arising under a statute repealed or the modified directives, below, regarding assessments and payments due before the effective date of its repeal.

    Makes the following modifications to the specified assessments and payments required under Article 7 of GS Chapter 108A due prior to the Article'a repeal. For the annual period beginning October 1, 2020, requires calculation of the equity payment amount and the UPL payment amount required by GS 108A-124 to exclude services rendered after December 31, 2020. Authorizes the Department Secretary, in order to account for these partial-year payment amounts, to adjust the quarterly equity payments and UPL payments required by GS 108A-124, and also make necessary adjustments to the equity assessment percentage rate, the UPL assessment percentage rate, any quarterly equity assessment, and any UPL assessment required under GS 108A-122 and GS 108A-123.

    Effective January 1, 2021, enacts new Article 7A, Hospital Assessment Act, in GS Chapter 108A, providing as follows. 

    Provides that the assessments apply to all licensed North Carolina hospitals, except exempts from the supplemental assessment and the base assessment critical access hospitals, freestanding psychiatric hospitals, freestanding rehabilitation hospitals, long-term care hospitals, state-owned and state-operated hospitals, and the primary affiliated teaching hospital for each UNC medical school. Exempts public hospitals from the supplemental assessment.

    Requires both the base and supplemental assessments to be a percentage, established by the NCGA, of total hospital costs. Requires the Department's proposed supplemental assessment rate to be based on: (1) the percentage change in aggregate payments to hospitals subject to the supplemental assessment for Medicaid and NC Health Choice enrollees, excluding hospital access payments made under 42 CFR § 438.6 and (2) any changes in the federal medical assistance percentage rate applicable to the Medicaid or NC Health Choice programs for the applicable year. Requires the proposed base assessment rate to be based on: (1) the change in the State's annual Medicaid payment for the applicable year; (2) the percentage change in aggregate payments to hospitals subject to the base assessment for Medicaid and NC Health Choice enrollees, excluding hospital access payments made under 42 CFR § 438.6, as determined by the Department; (3) any changes in the federal medical assistance percentage rate applicable to the Medicaid or NC Health Choice programs for the applicable year; and (4) any changes, as determined by the Department, in reimbursement under the Medicaid State Plan, managed care payments authorized under 42 CFR § 438.6, for which the nonfederal share is not funded by General Fund appropriations, and reimbursement under the NC Health Choice program. Provides that assessments are due quarterly. Allows a hospital to appeal a determination of the assessment amount owed through a reconsideration review. Provides that if the Centers for Medicare and Medicaid Services (CMS) determines that an assessment is impermissible or revokes approval of an assessment, then that assessment must not be imposed and the Department's authority to collect the assessment is repealed.

    Provides that if a hospital exempt from both the base and supplemental assessments under this Part (1) makes an intergovernmental transfer to the Department to be used to draw down matching federal funds and (2) has acquired, merged, leased, or managed another hospital on or after March 25, 2011, then the exempt hospital must transfer an additional amount to the State. Sets out the formulas for calculating that amount, beginning October 1, 2021, and for the period beginning January 1, 2021, and ending September 30, 2021.

    Requires that the proceeds of the assessments imposed under this Part, and all corresponding matching federal funds, must be used to make the State's annual Medicaid payment to the State, to fund payments to hospitals made directly by the Department, to fund a portion of capitation payments to prepaid health plans attributable to hospital care, and to fund the nonfederal share of graduate medical education payments.

    Requires total hospital costs to be calculated based on the Hospital Cost Report Information System's 2016 cost report data available through CMS for the taxable year October 1, 2020, through September 30, 2021.

    Sets the base and supplemental assessment percentage rates to be used pursuant to new GS 108A-142 and GS 108A-141 for the taxable year October 1, 2020, through September 30, 2021, at a base assessment rate of 1.77% and a supplemental assessment rate of 2.26%. Restricts imposition of the base assessment rate and the supplemental assessment rate to the months beginning on or after January 1, 2021, with the assessment imposed from the period January 1, 2021, through September 30, 2021, to be 3/4 of the assessment amount that would have been imposed for the full taxable year.

    Directs the State Controller to transfer funds from the Medicaid Contingency Reserve to the Division of Health Benefits only upon request by the Division as needed to cover any shortfall of receipts from the supplemental or base assessments under new GS 108A-141 and GS 108A-142, and only if two conditions are met: (1) OSBM has certified that there will be a shortfall and (2) OSBM has certified that the amount requested does not exceed the shortfall in receipts certified. Requires the Division of Health Benefits to notify the specified NCGA committee and division of any request and the amount requested. Deems transferred funds appropriated. Sunsets this authority June 30, 2021.

    Part XI

    Makes the following changes to Article 8B of GS Chapter 105, retitling the article Taxes Upon Insurance Companies and Prepaid Health Plans.

    Adds capitation payment and prepaid health plan to the defined terms set out in GS 105-228.3. Makes organizational changes.

    Amends GS 105-228.5, expanding the gross premium tax to subject prepaid health plans to a 1.9% gross premium tax, measured by capitation payments received by the prepaid health plan (PHP) by the Department of Health and Human Services for services provided to enrollees in the State Medicaid program or NC Health Choice program in the preceding calendar year. Makes conforming additions concerning calculating the tax base of PHPs. Provides that capitation payments refunded by a PHP to the State are the only allowable deductions. Adds clarification to the exclusion of Medicaid premiums, providing that the exclusion includes Medicaid or NC Health Choice premiums other than capitation payments, paid by or on behalf of a Medicaid or NC Health Choice beneficiary. Requires the net proceeds of the tax to be credited to the General Fund. Makes further technical and clarifying changes. 

    Amends GS 58-6-25 (concerning the insurance regulatory charge) by amending the definition of insurance company as it is used in the statute to include prepaid health plans that pay the gross premiums tax.

    Amends GS 105-259 to authorize disclosure of tax information by State officers, agents, or employees in order to exchange information concerning a tax imposed upon insurance companies by Article 8B with the Department when needed to fulfill the Department of Revenue's duty.

    Effective 30 days after the date the act becomes law and applies to all capitation payments received by prepaid health plans on or after that date.

    Part XII

    Enacts GS 143C-9-9, establishing the Hospital Uncompensated Care Fund as a nonreverting special fund in DHHS consisting of the federal disproportionate share adjustment receipts arising from certified public expenditures. Authorizes DHHS to use funds from the Fund to make the following payments, provided that the entity receiving payment has been determined to be an eligible entity under Department rules: (1) to institutions for mental diseases, as defined by federal law and (2) to eligible hospitals to reimburse inpatient services uncompensated care costs or outpatient services uncompensated care costs, or both. Requires DHHS to adopt rules for determining eligibility for, and allocations of, Hospital Uncompensated Care Fund payments. 

    Part XIII

    States the NCGA's intent to amend Section 2.3(b) of SL 2019-242 to reflect changes to the handling of nontax revenue in the NC Medicaid program in a managed care environment.

    Part XIV

    Effective when the act becomes law, unless otherwise provided.


  • Summary date: May 19 2020 - More information

    To be summarized.


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