Bill Summary for H 372 (2015-2016)

Summary date: 

Sep 17 2015

Bill Information:

View NCGA Bill Details2015-2016 Session
House Bill 372 (Public) Filed Thursday, March 26, 2015
Intro. by Dollar, Lambeth, B. Brown, Jones.

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Bill summary

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.

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