MEDICAID TRANSFORMATION AND REORGANIZATION

View NCGA Bill Details2015-2016 Session
House Bill 372 (Public) Filed Thursday, March 26, 2015
AN ACT TO TRANSFORM AND REORGANIZE NORTH CAROLINA'S MEDICAID AND NC HEATH CHOICE PROGRAMS.
Intro. by Dollar, Lambeth, B. Brown, Jones.

Status: Ch. SL 2015-245 (House Action) (Sep 23 2015)

SOG comments (3):

Identical Bill

Identical to S 574 filed on 3/26/15.

Long title change

Senate committee substitute to the 3rd edition changed the long title. Original long title was AN ACT TO MODERNIZE AND STABILIZE NORTH CAROLINA'S MEDICAID PROGRAM THROUGH PROVIDER-LED CAPITATED HEALTH PLANS.

Change Short and Long Titles

Conference committee report changed short and long titles of 6th edition.  Short title was Medicaid Transformation/HIE/Primary Care/Funds. Long title was AN ACT TO TRANSFORM AND REORGANIZE NORTH CAROLINA'S MEDICAID AND NC HEALTH CHOICE PROGRAMS, TO PROVIDE FUNDS FOR THE OVERSIGHT AND ADMINISTRATION OF THE STATEWIDE HEALTH INFORMATION EXCHANGE NETWORK, TO INCREASE MEDICAID RATES TO PRIMARY CARE PHYSICIANS, AND TO DISCONTINUE MEDICAID PRIMARY CARE CASE MANAGEMENT.

Bill History:

H 372/S.L. 2015-245

Bill Summaries:

  • Summary date: Sep 28 2015 - More information

    AN ACT TO TRANSFORM AND REORGANIZE NORTH CAROLINA'S MEDICAID AND NC HEATH CHOICE PROGRAMS. Enacted September 23, 2015. Effective September 23, 2015, except as otherwise provided. 


  • Summary date: Sep 17 2015 - More information

    The conference report deletes the provisions of the 6th edition and replaces it with the following. 

    Sections 1 and 2 state the General Assembly's intent to provide budget predictability and ensure quality care in the state's Medicaid and NC Health Choice programs and define a role for the General Assembly in oversight and budgetary appropriation. 

    Section 3 lays out a timeline for Medicaid transformation requiring the state Department of Health and Human Services (DHHS), through the new Division of Health Benefits (the Division), to submit all necessary waivers and state plan amendments to the federal Centers for Medicare & Medicaid Services by June 1, 2016, and calling for capitated prepaid health plan (PHP) contracts and recipient enrollment to begin no later than eighteen months after federal approval. 

    Section 4 sets forth the authority of DHHS to manage the Medicaid and NC Health Choice programs, so long as expenditures, net of receipts, do not exceed the authorized budget for each program. The General Assembly retains authority to determine eligibility categories and income thresholds. DHHS, the Division, and the Department of Insurance jointly must review the applicability of GS Chapter 50, Insurance, to the PHPs provided for by the act, and report to the Joint Legislative Oversight Committee on Medicaid and NC Health Choice (Oversight Committee) by March 1, 2016. Defines PHPs. Requires the Division to enter into capitated contracts with PHPs and sets out requirements for the number and nature of those contracts.  Includes provisions on the services and populations covered by PHPs. Required Requires LME/MCOs to continue to manage the behavioral health services currently covered for enrolled recipients for four years after the date capitated PHP contracts begin.

    Section 5 describes the responsibility of the Division to secure necessary federal waivers and amendments, divide the state into administrative regions, enter into and enforce PHP contracts, assign recipients to PHPs, and perform other administrative functions. The Division must submit a comprehensive status report to the Oversight Committee by March 1, 2016, and a report on recipients eligible for both Medicaid and Medicare (dual eligibles) by January 31, 2017. The Division must appoint an advisory commission to assist with the latter.

    Section 6 requires the Department of Insurance to develop solvency requirements to use in licensing PHPs and report to the Oversight Committee by March 1, 2016.

    Section 7 calls for DHHS to continue to utilize the enhanced primary care case management program implemented by North Carolina Community Care Networks, Inc., through the period of transition to a primary care medical home model of capitated PHP contracts. DHHS must renegotiate its contract with Community Care to reduce per-member per-month payments by 15% and terminate the contract when PHP contracts begin. 

    Section 8 requires DHHS to submit to the Oversight Committee by May 1, 2016, a program design and budget proposal for a Medicaid and NC Health Choice Transformation Innovations Center modeled on the Oregon Health Authority's Transformation Center. 

    Section 9 states the General Assembly's intent to preserve as much as possible existing levels of federal funding generated from Medicaid-specific funding streams and requires the Division to work with the Centers for Medicare & Medicaid Services and inform the Oversight Committee of modifications necessary to achieve that goal. 

    Section 10 creates the Division in DHHS for the purposes of implementing the Medicaid transformation as provided for in this act, with authority to administer and operate all functions, powers, duties, obligations, and services related to the transformed Medicaid and NC Health Choice programs. Provides that the Division of Medical Assistance (DMA)will continue to operate these programs until it is eliminated, at which time all authority and duties will pass to the Division.  

    Section 11 provides for the elimination of the DMA 12 months after capitated PHP contracts have begun or at an earlier time if decided by the Secretary. Requires the Secretary to issue a notice to the Office of State Budget and Management and the Oversight Committee three months before it is anticipated that the DMA will no longer be needed for future operations as well as an additional notice upon the effective date of the elimination.

    Section 12 enacts new GS Chapter 143B, Article 3, Part 36, Division of Health Benefits, providing for the creation of the Division in DHHS.

    Effective January 1, 2021, enacts new GS 143B-216.85, which establishes that the Director of the Division will be appointed by the Governor for a four-year term, subject to confirmation by the General Assembly. Provides that the initial term of the Director begins with General Assembly confirmation and expires on June 30, 2025. Sets out the process and procedures for nominating, appointing, and obtaining General Assembly approval of the Director.  Additionally, sets out the process for filling vacancies of the Director’s office, requiring the Governor to submit the name of a successor no later than 60 days after the vacancy occurs.  Allows the appointment of an acting Director if the vacancy occurs when the General Assembly is not in session. Sets out limitations of the acting Director.  Provides that the Director can only be removed by the Governor and then only for reasons specified in GS 143B-13(b), (c), and (d).

    Section 13 enacts new GS 108A-54(e), providing nine powers and duties of the Secretary of DHHS (Secretary) concerning the Division, including overall administration and operation of the Medicaid and NC Health Choice programs, the power to contract for the administration of the Medicaid and NC Health Choice programs, and publishing on the DHHS website on a monthly basis information concerning the enrollment and spending of the Medicaid and NC Health Choice programs. Provides that the power to determine eligibility categories and income thresholds for the Medicaid and NC Health Choice programs lies with the General Assembly. Reserves power in DHHS to adopt temporary and permanent rules concerning eligibility requirements and determinations, as far as no conflict with parameters set by the General Assembly exist.  Sets out certain exemptions, limitations, and modifications for the Division, including that employees of the Division are not subject to the NC Human Resources Act, except as provided, and that the Secretary can retain private legal counsel as provided.

    Section 14 enacts new GS 143B-139.6C, prohibiting the Secretary from contracting for goods or services with a vendor that employs or contracts with a person who is a former DHHS employee and uses that person in the administration of a contract with the state. Requires the Secretary to require each vendor submitting a bid or contract to certify that they will not use a former state employee in administering a contract with the state.  Provides that violations of these provision void the contract. Defines administration of a contract and former employee of DHHS. Effective November 1, 2015, applying to contracts entered into on or after that date.

    Section 15 enacts new Article 23B, Joint Legislative Oversight Committee on Medicaid and NC Health Choice, in GS Chapter 120. Establishes the 14-member Joint Legislative Oversight Committee on Medicaid and NC Health Choice, with seven members of the Senate appointed by the President Pro Tempore of the Senate and seven members of the House of Representatives appointed by the Speaker of the House of Representatives. Requires that a minimum of two appointees from the House and two appointees from the Senate be members of the minority party.  Provides criteria regarding term lengths and the filling of vacancies. Declares that the purpose and powers of the Committee are to examine budgeting, financing, administrative, and operational issues related to the Medicaid and Health Choice programs. Requires the Committee to make periodic reports to the General Assembly.  Directs DHHS to transmit a copy of any report that it is required by law to make on matters affecting the Medicaid or Health Choice programs to the co-chairs of the Committee. Provides criteria for the organization of the Committee and specifies additional powers of the Committee.

    Section 16 makes a conforming change, repealing GS 120-208.1(a)(2)b, which designates the powers and duties of the Joint Legislative Oversight Committee on Health and Human Services to examine issues relating to medical assistance.

    Section 17 transfers legislative oversight of the Medicaid and NC Health Choice programs from the Joint Legislative Oversight Committee on Health and Human Services to the Joint Legislative Oversight Committee on Medicaid and NC Health Choice.  Specifies areas of concurrent jurisdiction for both committees.

    Section 18 makes conforming changes to GS 108A-54.1A.

    Section 19 repeals GS 108A-54.2(d), which prohibited DHHS, unless directed to do so by the General Assembly, from changing medical policy affecting the amount, sufficiency, duration, and scope of health care services and who may provide services until the Division of Medical Assistance has prepared a five-year fiscal analysis documenting the increased cost of the proposed change in medical policy and submitted it for departmental review, and which made changes to medical policy that affected the amount, sufficiency, duration, and scope of health care services and who may provide services subject to specified conditions.

    Section 20 amends GS 126-5 to provide that, except as to the provisions of Articles 6 (Equal Employment and Compensation Opportunity; Assisting in Obtaining State Employment) and 7 (The Privacy of State Employee Personnel Records), GS Chapter 126 (NC Human Resources Act) does not apply to (1) employees of the Division and (2) the employees of the Division of Medical Assistance hired on or after October 1, 2015.

    Section 21 provides that funds appropriated to DHHS in House Bill 97 of the 2015 Regular Session for Medicaid transformation must be used to implement the provisions of this act.  Provides for the transfer of these funds. 

    Section 22 provides that if House Bill 97 becomes law, then Section 12H.25 of that act is repealed, concerning certain allocations and uses of specified leftover funds.

    Changes the act's short and long titles.


  • Summary date: Aug 10 2015 - More information

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

    Requires contracts for the delivery of Medicaid health care items and services provide for small providers to have an equal opportunity to participate in the provider networks established by commercial insurers and PLEs, and requires commercial insurers and PLEs to apply economic and quality standards equally regardless of provider size or ownership.


  • Summary date: Aug 10 2015 - More information

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

    Amends new GS 143B-1400 to add the procedure for naming a replacement Secretary of the Department of Medicaid in the event of death, incapacity, resignation, removal by the Governor, or vacancy for any other reason, with the procedures differing depending on whether the General Assembly is in session at the time of the vacancy.

    Amends GS 20-79.5 to create a special license plate for the Secretary of Medicaid.

    Amends GS 126-5 to allow the Governor to designate positions as exempt from the NC Human Resources Act in the Department of Medicaid (DOM).

    Amends GS 143B-2 to make the Executive Organization Act of 1973 applicable to DOM.

    Amends GS 143B-6 to name DOM as a principal department.


  • Summary date: Aug 6 2015 - More information

    Senate committee substitute makes the following changes to the 3rd edition. Unless otherwise indicated, deletes the contents of the previous edition and replaces it with the following.

    Section 1

    Includes the General Assembly’s intent and goals as stated in the previous edition, except no longer includes as a goal of the new Medicaid system improving health outcomes for the State’s Medicaid population. Sets out the principles and parameters that are to govern the organization of the new Medicaid program, including that the new Department of Medicaid (DOM) have full budget and regulatory authority to manage the State’s Medicaid and NC Health Choice program while the General Assembly determines eligibility categories and income thresholds, and that DOM enter into contractual relationships with commercial insurers and provider-led entities for the delivery of all Medicaid health care items and services.

    Sets out the timeline for the Medicaid transformation, including but not limited to: (1) designating DOM as the single agency for the administration of Medicaid and NC Health Choice and DHHS and DOM entering into agreements necessary for DOM to supervise the Department of Health and Human Services’ (DHHS’s) administration of those programs by January 1, 2016; and (2) beginning capitated full-risk contracts 12 months after the Centers for Medicare and Medicaid Services approves all necessary waivers and State Plan amendments.

    Sets out the required components of the initial request for proposals, responsive bids to the initial request for proposals, and the initial required contracts.

    Requires DOM to report monthly beginning February 1, 2016, until January 1, 2019, to the Joint Legislative Oversight Committee on Medicaid (Committee) and the Fiscal Research Division on progress on the Medicaid transformation. Requires the May 1, 2016, report to include proposed changes to the General Statutes that are necessary for the transformation.

    Requires DOM to work with the Centers for Medicare and Medicaid Services to try to preserve existing levels of funding generated from Medicaid-specific funding streams to the extent that the levels of funding may be preserved. States actions that must happen if the funding is not maintained.

    Requires DHHS, Division of Medical Assistance, to cooperate with DOM to ensure a smooth transition of the Medicaid and NC Health Choice programs and specifies functions that the Division of Medical Assistance must perform. Those functions include creating a Medicaid stabilization team and designating essential positions who will be eligible for bonuses for remaining in their positions.

    Enacts new Article 14 in GS Chapter 143B, creating the new Department of Medicaid (DOM). In accordance with the timeline set out in the act, all functions, powers, duties, obligations, and services vested in the Division of Medical Assistance are vested in DOM. Requires the Governor to appoint the new Secretary of the Department of Medicaid (Secretary), subject to approval by the General Assembly. Sets out the Secretary’s powers and duties.

    Provides for the following variations from state law: (1) employees of DOM are not subject to the NC Human Resources Act; (2) the Secretary may retain private legal counsel; (3) DOM employment contracts offered under GS 143B-1405(a)(2) are not subject to review and approval by the Office of State Human Resources; and (4) if the Secretary establishes alternative procedures for the review and approval of contracts, then DOM is exempt from state contract review and approval requirements but may still choose to use the state contract review and approval procedures for particular contracts.

    Prohibits the Secretary from contracting for goods or services with a vendor that employs or contracts with a person who is a former Medicaid or NC Health Choice employee and uses that person in the administration of a contract with DOM. Defines a former Medicaid or NC Health Choice employee as a person who, for any period in the preceding six months, was employed as an employee or contract employee of the Department, who in the six months immediately preceding termination of state employment, participated personally in either the award or management of a Department contract with the vendor or made regulatory or licensing decisions that directly applied to the vendor. Requires each vendor submitting a bid or contract to certify that the vendor will not use a former Medicaid or NC Health Choice employee in administration of a contract with DOM; knowingly submitting a false certification is a Class I felony.

    Establishes the Medicaid Reserve Account (Account) as a nonreverting reserve in the General Fund. The purpose of the Account is to provide for unexpected budgetary shortfalls in the Medicaid and NC Health Choice programs resulting from program expenditures in excess of the amount appropriated for the programs by the General Assembly and that continue to exist after the Health Benefits Authority makes its best efforts to control costs though midyear budget corrections. Sets the minimum and maximum target balances for the Account. Any funds appropriated for the Medicaid or NC Health Choice programs that are unencumbered at the end of the fiscal year are to be credited to the Account. Specifies conditions that must exist before the Secretary may disburse Account funds to manage budgetary shortfalls in the Medicaid and NC Health Choice programs.

    Transfers to DOM, effective January 1, 2016, all rules and policies exempted from rule making related to the Medicaid and NC Health Choice programs. Sets out provisions governing any legal actions involving the Medicaid or Health Choice programs that name the Division of Medical Assistance or DHHS as parties. Requires the Commissioner of Insurance to establish solvency requirements for MCOs and PLEs that contract with the Department.

    Retains new Article 23B, Joint Legislative Oversight Committee on Medicaid, from the previous edition with the following changes. Specifies that initial appointments to the Committee begin on the date of appointment. Makes conforming changes to refer to DOM instead of DHHS. Provides that GS 120-19.1 through GS 120-19.4 apply to the Committee’s proceedings as if it were a joint committee of the General Assembly. Makes additional conforming changes.

    Keeps the repeal of GS 120-208.1(a)(2)b from the previous edition.

    Requires the Revisor of Statutes to recodify existing law related to Medicaid and NC Health Choice into a new GS Chapter 108E, entitled Medicaid and NC Health Choice Health Benefit Programs. Effective January 1, 2016.

    Makes conforming changes to GS 108A-1, GS 108A-54.1A, GS 143B-153, and GS 150B-1. Effective January 1, 2016.

    Repeals GS 108A-54.2(d) which prohibited DHHS, unless directed to do so by the General Assembly, from changing medical policy affecting the amount, sufficiency, duration, and scope of health care services and who may provide services until the Division of Medical Assistance has prepared a five-year fiscal analysis documenting the increased cost of the proposed change in medical policy and submitted it for departmental review, and which made changes to medical policy that affected the amount, sufficiency, duration, and scope of health care services and who may provide services subject to specified conditions. Effective January 1, 2016.

    Enacts new GS 108E-2-1 providing that the General Assembly sets the eligibility categories and income thresholds, and prohibits DOM from altering the categories and thresholds. Authorizes DOM to adopt rules regarding eligibility requirements and determinations, to the extent that they do not conflict with parameters set by the General Assembly. Effective January 1, 2016.

    Enacts new GS 108E-2-2 providing that counties determine eligibility in accordance with GS Chapter 108A. Effective January 1, 2016.

    Amends GS 126-5 to provide that, except as to the provisions of Articles 6 (Equal Employment and Compensation Opportunity; Assisting in Obtaining State Employment) and 7 (The Privacy of State Employee Personnel Records), GS Chapter 126 (NC Human Resources Act) does not apply to employees of DOM. Effective January 1, 2016.

    Appropriates $5 million in  recurring funds for 2015-16 and 2016-17 from the General Fund to DHHS, Division of Medical Assistance, to accomplish the Medicaid transformation. Specifies that these funds are a state match for federal funds. Requires DHHS, upon request of DOM, but no later than January 1, 2016, to transfer the funds to DOM to be used for Medicaid transformation.

    Section 2

    States the General Assembly’s intent concerning the health information exchange.

    Appropriates $8 million in recurring funds for the 2015-16 and 2016-17 fiscal years to DHHS, Division of Central Management and Support, for the 2015-16 fiscal year and for the 2016-17 fiscal year to continue efforts on implementing a statewide health information exchange network. These funds must be transferred to the Department of Information Technology. Requires the Secretary of DHHS and the State Chief Information Officer (State CIO) to enter into a written memorandum of understanding under which the State CIO has sole authority to direct the expenditure of the funds until (1) the NC Health Information Exchange Authority (Authority) is established and a Director is appointed and (2) the NC Health Information Exchange Advisory Board (Advisory Board) is established with members appointed. Set out the things that the State CIO must accomplish with the funds. Provides that once the Authority Director has been hired and the Advisory Board has been established with members appointed, the Authority must use the funds to do five specified things, including funding the Authority’s and Advisory Board’s operational expenses, enter into contracts related to the successor HIE Network, and fund the monthly operational expenses incurred or encumbered by the NC HIE from July 1 through December 31, 2015.

    The above provisions of Section 2 are effective July 1, 2015.

    Enacts new Article 29B, Statewide Health Information Exchange Act, in GS Chapter 90, effective October 1, 2015. Repeals Article 29A, North Carolina Health Information Exchange Act, of GS Chapter 90, effective on the date that the State CIO notifies the Revisor of Statutes that all contracts pertaining to the HIE Network established under Article 29A between the State and the NC HIE, and between the NC HIE and any third parties have been terminated or assigned to the Authority.

    New Article 29B provides as follows. States the purpose of the Article and sets out and defines terms that are used in the Article. Requires hospitals that have an electronic health record system, Medicaid providers, and providers that receive state funds for the provision of health services to, as a condition of receiving state funds (including Medicaid funds) to connect to the HIE Network (Network) and submit individual patient demographic information and clinical data on services paid for with state funds. Requires the Authority to give the Health Benefits Authority access to data and information disclosed through the Network. Requires the Authority to provide the General Assembly’s professional staff with requested data and information from the Network after specified information has been redacted. Establishes the state’s ownership of data disclosed through the Network.

    Establishes the NC Health Information Exchange Authority within the Department of Information Technology to oversee and administer the Network. Requires the State CIO to employ an Authority Director and allows the State CIO to delegate all powers and duties associated with the Authority operations, staff, and performance to the Director. Sets out the Authority’s 16 powers and duties, including entering into contracts pertaining to the oversight and administration of the Network, enter into written participation agreements (after consultation with the Advisory Board) with covered entities that use the Network, develop a strategic plan for achieving statewide participation in the Network by all hospitals and health care providers licensed in this state (after consultation with the Advisory Board), and report on specified information to the Joint Legislative Oversight Committee on the Health Benefits Authority and Information Technology.

    Establishes the nine-member NC Health Information Exchange Advisory Board within the Department of Information Technology to consult with the Authority on the advancement, administration, and operation of the Network and on matters pertaining to health information exchange. Sets our membership requirements and provides for staggered membership terms.

    Requires each covered entity (defined in the act as any entity described in 45 C.F.R. Section 160.103 or any other facility or practitioner licensed by the State to provide health care services) that chooses to participate in the Network to enter into a business associate contract and a written participation agreement with the Authority or qualified organization before disclosing or accessing any protected health information through the Network. Allows covered entities participating in the Network to disclose an individual’s protected health information through the Network to other covered entities for any purpose allowed by HIPPA, unless the individual has opted out, and in order to facility emergency medical treatment to the individual. Provides criminal and civil immunity for any health care provider who relies in good faith on any information provided through the Authority or through a qualified organization in treating a patient.

    Provides that each individual has a continuing right to opt out, or rescind a decision to opt out, which means disallowing the individual’s protected health information maintained by or on behalf of one or more specific covered entities from being disclosed to other covered entities through the Network. Prohibits the disclosure of the protected health information of an individual who has opted out to covered entities through the Network; however, allows the protected information of an individual who has opted out to be disclosed through the Network in order to facilitate emergency medical treatment when specified criteria has been met. Prohibits a covered entity from denying treatment or benefits to an individual because the individual has opted out.

    Includes provisions for the construction and applicability of the Article.

    Sets out penalties that a covered entity is subject to for disclosing protected health information in violation of the Article.

    Amends GS 126-5 to provide that, except as to the provisions of Articles 6 (Equal Employment and Compensation Opportunity; Assisting in Obtaining State Employment) and 7 (The Privacy of State Employee Personnel Records), GS Chapter 126 (NC Human Resources Act) does not apply to employees of the NC Health Information Exchange Authority.

    Section 3

    Discontinues the current Medicaid and Health Choice primary care case management (PCCM) program, effective May 1, 2016. Prohibits DHHS from renewing or extending the contract for PCCM services with North Carolina Community Care Networks, Inc. (NCCCN), beyond April 30, 2016. Sets out further actions DHHS must take in eliminating the PCCM program.

    Amends GS 108A-70.21, effective May 1, 2016, to no longer require DHHS to provide services to children enrolled in the NC Health Choice Program through Community Care of North Carolina and pay Community Care of North Carolina providers the per member, per month fees as allowed under Medicaid.

    Provides that effective May 1, 2016, the rates paid to primary care physicians (defined as those physicians for whom the Affordable Care Act required payment at 100% of the Medicare rate until January 1, 2015, and all OB/GYN physicians) will be 100% of Medicare rates.

    States the General Assembly’s findings about how much money will be saved by the discontinuation of the PCCM program and the NCCCN contract, and makes specified appropriations based on those savings to the Division of Medical Assistance to pay for the increased Medicaid rates required by the act, and to fund the local health departments’ continued services related to the Care Coordination for Children, which was previously funded through the contract with NCCCN.

     Changes the act’s short and long titles.


  • Summary date: Jun 18 2015 - More information

    House committee substitute makes the following changes to the 2nd edition.

    Amends the timeline for the Medicaid transformation, as described in this act, to include pharmacy dispensing fees in the services that are exempt from coverage underfull-risk, capitated health planswithin five years of the date that this act becomes law.

    Adds expertise in health quality outcomes to the areas of knowledge to be represented on the Quality Assurance Advisory Committee convened by the Secretary of the Department of Health and Human Services.


  • Summary date: Jun 11 2015 - More information

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

    Retains Section 1 of this act, which declares the intent of the General Assembly to transform the state's current Medicaid program to one that provides budget predictability for taxpayers and ensures quality care to those who need it, and designates the goals the program transformation is designed to achieve. Removes from those goals ensuring a successful health information exchange and adds improving health outcomes for the state's medicaid population. House committee substitute makes substantive additions to the 1st edition as follows.

    Defines the following terms as used in this act: (1) capitation payment--as defined in 42 CFR 438.2; (2) CMS--The Centers for Medicare and Medicaid Services; (3) Department--the North Carolina Department of Health and Human Services; (4) Provider--as defined in GS 108C-2(10); (5) provider-led entity--a provider, an entity with the primary purpose of owning or operating one or more providers, or a business entity in which providers hold a controlling ownership interest; (6) recipient--an individual who has been determined to be eligible for Medicaid or NC Health Choice; and (7) Secretary--The Secretary of the Department.

    Specifies the structure of the delivery system for transforming the Medicaid program is to consist of provider-led entities (PLEs). Requires those PLEs to implement full-risk capitated health plans to manage and coordinate the care for enough program aid categories to cover at least 90% of Medicaid recipients to be phased in over five years from the date this act becomes law. Prohibits including dual-eligible individuals for whom Medicaid pays only Medicare premiums in program aid category coverage. Requires that PLEs cover Medicaid recipients in all 100 counties in the aggregate and ensure appropriate access to care for Medicaid recipients in all 100 counties while building upon the existing enhanced primary care medical home model. Assigns responsibility to the Department of Health and Human Services (DHHS) to implement a process for assigning Medicaid recipients to PLEs. Provides additional details and designates authority to DHHS and PLEs for structuring the delivery of services and care to recipients.

    Provides a timeline with designated milestones for Medicaid transformation to occur in the state. The timeline includes, but is not limited to, the following. Requires DHHS to develop, with meaningful stakeholder engagement, and submit to the Centers for Medicare and Medicaid Services (CMS) a request for an 1115 Medicaid demonstration waiver to implement the components of this act within 12 months of this act becoming law. Also directs DHHS to issue a request for proposals (RFP) for PLEs to bid on contracts required under this act within 24 months of this act becoming law and receipt of the waiver approvals from CMS. Requires that within five years of the date that this act becomes law, 90% of Medicaid recipients in the state must be enrolled in full-risk, capitated health plans for all services other than those contracted for through the local management entities/managed care organizations (LME/MCOs), dental services, and pharmaceutical products.

    Specifies the mandatory components that DHHS must include in the RFP and in all contracts required under Section 3 of this act (which provides the structure of the delivery system). Prohibits considering a bid that does not, at a minimum, provide coverage for a defined population of at least 30,000 recipients and ensure appropriate access to care for recipients. Specifies individual responsibilities to be met by bidders, and collective responsibilities to be met by all bidders. Also sets criteria and standards to be met by all contracts.

    Declares that the General Assembly delegates full authority to DHHS to take all actions that are necessary to implement the Medicaid transformation as described in this act. Requires DHHS to administer and manage the program within the budget enacted by the General Assembly, provided that the total expenditures, net of agency receipts, for the Medicaid program do not exceed the enacted budget.

    Directs the Secretary of DHHS to convene a quality assurance advisory committee consisting of experts in the following areas: (1) Medicaid, (2) actuarial science, (3) health economics, (4) health benefits, and (5) administration of health law and policy. Requires that at least one individual on the advisory committee be a member of the North Carolina State Health Coordinating Council. Directs the Committee to advise DHHS on developing and submitting requests for all federal waivers and to support the development and approval of the performance goals that will serve as the basis of the pay-for-performance system. Provides that the committee is to terminate five years from the date of the enactment of this act. Directs DHHS to contract for periodic financial audits of each successful bidder based on the terms and conditions of the contract awarded.

    Makes it the responsibility of DHHS to maintain funding mechanisms, working with CMS to preserve existing levels of funds generated from Medicaid-specific funding streams. Requires DHHS to advise the Joint Legislative Oversight Committee created in this act of any necessary modifications to maintain as much revenue as possible within the context of Medicaid transformation.

    Directs DHHS to continue implementation of the existing 1915(b)/(c) waiver.

    Enacts new Article 23B, Joint Legislative Oversight Committee on Medicaid, in GS Chapter 120. Establishes the 14-member Joint Legislative Oversight Committee on Medicaid (Committee), with seven members of the Senate appointed by the President Pro Tempore of the Senate and seven members of the House of Representatives appointed by the Speaker of the House of Representatives. Requires that a minimum of two appointees from the House and two appointees from the Senate be members of the minority part. Provides criteria regarding term lengths and the filling of vacancies. Declares that the purpose and powers of the Committee are to examine budgeting, financing, administrative, and operational issues related to the Medicaid and Health Choice programs and to DHHS. Requires the Committee to make periodic reports to the General Assembly. Directs DHHS to transmit a copy of any report that it is required by law to make on matters affecting the Medicaid or Health Choice programs to the co-chairs of the Committee. Provides criteria for the organization of the Committee and specifies additional powers of the Committee.

    Makes a conforming change, repealing GS 120-208.1(a)(2)b, which designates the powers and duties of the Joint Legislative Oversight Committee on Health and Human Services to examine issues relating to medical assistance.

    Appropriates $2.5 million in nonrecurring funds for the 2015-16 fiscal year and $2.5 million in nonrecurring funds for the 2016-17 fiscal year from the General Fund to DHHS, Division of Medical Assistance, to accomplish the Medicaid transformation required by this act. Provides that the appropriations are a state match for an estimated $2.5 million in federal funds beginning in the 2015-16 fiscal year. Appropriates those federal funds to the Division of Medical Assistance to pay for Medicaid transformation. Becomes effective upon appropriation by the General Assembly of funds to implement this act.

    Except as otherwise indicated, the act is effective when it becomes law.


  • Summary date: Mar 27 2015 - More information

    States the General Assembly's intent to transform the state's current Medicaid program to a program that provides budget predictability while ensuring quality care. Requires the new Medicaid program to ensure: (1) budget predictability through shared risk and accountability; (2) balanced quality, patient satisfaction, and financial measures; (3) efficient and cost‑effective administrative systems and structures; (4) a sustainable delivery system; and (5) a successful health information exchange.


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