RURAL HEALTH CARE STABILIZATION ACT. (NEW)

View NCGA Bill Details2019-2020 Session
House Bill 704 (Public) Filed Wednesday, April 10, 2019
AN ACT TO ESTABLISH THE RURAL HEALTH CARE STABILIZATION PROGRAM.
Intro. by Lewis, Murphy, Dobson, Wray.

Status: Ref To Com On Finance (House action) (Aug 27 2019)

SOG comments (1):

Long title change

Senate committee substitute to the 2nd edition changed the long title.  Original title was AN ACT TO CLARIFY CERTAIN PROVIDER AND PATIENT RIGHTS REGARDING HEALTH BENEFIT PLAN CONTRACTS FOR THE PROVISION OF DENTAL SERVICES.

Bill History:

H 704

Bill Summaries:

  • Summary date: Aug 22 2019 - More information

    Senate committee substitute deletes the provisions of the 2nd edition and now provides the following.

    Changes the act's titles.

    Designates GS 131A-1 through GS 131A-25 as Article 1 of GS Chapter 135, the Health Care Facility Finances Act. Directs the Revisor of Statutes to make necessary changes to statutory cross-references. Makes conforming changes to GS 113A-12 (environmental document exemption) and GS 142-15.16 (defining State-supported financing arrangement). 

    Enacts new Article 2, Rural Health Care Stabilization Program, to GS Chapter 131A. Sets forth nine defined terms. Establishes the Rural Health Care Stabilization Program (Program) to provide loans for the support of eligible hospitals located in rural areas that are in financial crisis due to operation of oversized and outdated facilities and recent changes to the viability of health care delivery in their communities, with loans to be used to finance construction of new health care facilities or to provide for operational costs during the transition period, or both, including while the construction of new facilities is undertaken. Requires UNC Health Care to administer the Program. Sets out specific UNC Health Care responsibilities, including assessing Plans submitted by loan applicants, evaluating the applicant's ability to repay the loan under the proposed Plan, determining the security interests necessary to enforce repayment, and implementing approved loan agreements. Excludes UNC Health Care from applying for a loan or being a partner in a partnership that applies for a loan under the Program. Specifies that the Local Government Commission (Commission) cannot approve a loan application if the issuance of the loan would result in a material, direct benefit to UNC Health Care at the time the application and Plan are submitted for approval. Grants UNC Health care rulemaking authority necessary for the Program's implementation.

    Establishes the Rural Health Care Stabilization Fund (Fund) as a nonreverting special fund in the Office of State Budget and Management. Directs that the Fund operate as a revolving fund under the custody of the State Treasurer, with funds restricted to use pursuant to the Article. The Fund consists of funds appropriated to or received by the Program and funds received as repayment of the principal of or interest on Fund loans.

    Sets out the loan application process. Deems a public agency, an owner of a health care facility, or a partnership of one or more of those entities eligible to apply for a loan under the Program. Requires applicants to develop and submit a hospital stabilization plan for an eligible hospital to UNC Health Care during the application period, as established by UNC Health Care. Requires UNC Health Care to evaluate each Plan submitted to determine whether the applicant's Plan demonstrates a financially sustainable health care service model for the community in which the eligible hospital is located. Also allows UNC Health Care to assist an applicant with revisions to its Plan. Requires UNC Health Care to notify the applicant and the Commission of its recommendation on whether to approve or disapprove a loan application. Allows UNC Health Care to assign priority in the event of more than one application during the application period. Allows, when a loan application is disapproved, for an applicant to engage a disinterested and qualified third party approved by the Commission to evaluate the applicant's Plan to determine if the applicant demonstrates the required financial sustainability, and permits the applicant to seek Commission approval of the loan based on the third party's written evaluation of the Plan.

    Requires the Commission to approve all loans under the Program prior to UNC Health Care's awarding the loan. Explicitly states that if the Commission enters an order denying the loan, the proceedings under new Article 2 are at an end. Requires UNC Health Care to disclose to the Commission any potential conflict of interest in its review of an application and Plan. Prohibits the Commission from approving an eligible applicant if the issuance of a loan would result in a material, direct financial benefit to UNC Health Care at the time the application and Plan are submitted to the Commission for its approval. Requires the Commission to review UNC Health Care's recommendations, an applicant's Plan and any other relevant information, as well as the third party evaluation, if applicable. Sets forth additional information the Commission can require the applicant and eligible hospital (if different) to provide for consideration. Establishes the following four findings that must be satisfied for the Commission to approve a loan application: (1) that the loan is necessary or expedient; (2) that the amount proposed is adequate and not excessive for the proposed purpose of the loan; (3) that the Plan demonstrates a financially sustainable health care service model for the community in which the eligible hospital is located; and (4) that the applicant's debt management procedures and policies are good, or that reasonable assurances have been given that the debt will be repaid.

    Requires UNC Health Care to execute the terms of the loan agreement upon approval of the loan by the Commission. Authorizes UNC Health Care to require changes to the governance structure of the eligible hospital. Limits the loan interest rate at the interest rate obtained by the State in its most recent general obligation bond offering, and sets the maximum maturity at 20 years. Requires execution of a debt instrument to evidence the obligation. Requires UNC Health Care to annually publish a report on the Fund by November 1 to cover the preceding year. Requires the report to be publicly available as well as a copy submitted to the specified NCGA committee and division. Details required content of the report, including the Fund balance at the beginning and end of the fiscal year, the amount of revenue and its source credited to the Fund during the fiscal year, the total amount of loans awarded from the Fund, and specified information regarding each loan awarded.

    Amends GS 116-37 to require General Fund appropriations for the Program to be deposited in the Fund, with use restricted to the purposes set forth in new Article 2 of GS Chapter 131A. Requires the UNC Health Care System to administer the Program pursuant to new Article 2 in order to further its mission.


  • Summary date: Apr 30 2019 - More information

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

    Deletes proposed GS 58-50-291, which prohibited an insurer providing a health benefit plan for dental services from using more than 25% of its prepaid charges or premiums for marketing and administrative expenses. 

    Amends proposed GS 58-50-292, by removing the provisions prohibiting insurers who provide health benefit plans for dental services from providing a third party access to a dental provider network contract or information pertaining to discounts for services pursuant to that dental provider network contract. Instead, allows an insurer to grant access to its provider network contract (defined as a contract between an insurer and a dental services provider specifying the rights and responsibilities of the insurer and the provider for delivery of and payment for dental services) to a third party if: (1) at the time the contract is entered into and at the time the contract is renewed, the insurer allows any provider who is part of the carrier's provider network to choose not to participate in third party access to the provider network contract; (2) the insurer includes on its website a listing identifying all third parties who have been granted such access; and (3) the third party accessing the provider network contract agrees to comply with all of the provider network contract's terms. Amends the definition of the term third party by adding that it does not include an employer group or other group for which the insurer provides administrative services. Specifies that the statute does not apply to the assignment of or access to a provider network contract to an entity operating under the same brand licensee program as the contracting entity or any of its affiliates.

    Deletes the provisions that removed dental plans from the kinds of insurance not included in the definition of health benefit plan under GS 58-3-200 (miscellaneous insurance and managed care coverage and network provisions) and GS 58-3-190 (coverage required for emergency care).

    Amends GS 58-3-200 to prohibit an insurer who has determined that services, supplies, or other items are covered under its dental plan from subsequently retracting its determination after the services, supplies, or other items have been provided or reducing payments for a service, supply, or other item furnished in reliance on such a determination, unless the determination was based on a material misrepresentation about the insured's health condition. Defines a pretreatment estimate as a voluntary request for a projection of dental benefits or payment that does not require authorization and a pretreatment estimate for dental services is not considered a coverage determination.  

    Changes the act's effective date to January 1, 2020 (was, October 1, 2019).


  • Summary date: Apr 10 2019 - More information

    Identical to S 252, filed 3/13/19.

    Adds to GS 58-50-290, prohibiting agreements between insurers or other entities and dental service providers contracting for the provision of dental services from containing restrictions on the methods of claim payment whereby the only acceptable payment method from the insurer or entity to the provider is a credit card payment.

    Enacts GS 58-50-291, prohibiting an insurer who provides a health benefit plan for dental services from using more than 25% of its prepaid charges or premiums for marketing and administrative expenses. Requires marketing and administrative expenses to be defined by rule by the Commissioner of Insurance for purposes of the statute. Clarifies that the statute does not affect the applicability of the Chapter's provisions.

    Enacts GS 58-50-292, prohibiting insurers who provide health benefit plans for dental services from providing a third party access to a dental provider network contract or information pertaining to discounts for services pursuant to that dental provider network contract. Defines dental provider network contract to mean a contract between an insurer and a dental services provider specifying the rights and responsibilities of the insurer and the provider for the delivery of and payment for dental services. Defines insurer and third party. Establishes that no provider is bound or required to perform services under a dental provider network contract that has been provided to a third party in violation of the statute. Deems an insurer's willful failure to comply with the statute an unfair and deceptive trade practice actionable under GS Chapter 75. Clarifies that the statute does not foreclose other available remedies under law. 

    Removes dental plans from the kinds of insurance not included in the definition of health benefit planunder GS 58-3-200 (miscellaneous insurance and managed care coverage and network provisions) and GS 58-3-190 (coverage required for emergency care).

    Applies to health and benefit contracts issued, renewed, or amended on or after October 1, 2019.


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