Bill Summary for H 989 (2019-2020)

Summary date: 

Jul 11 2019

Bill Information:

View NCGA Bill Details2019-2020 Session
House Bill 989 (Public) Filed Thursday, April 25, 2019
AN ACT TO PROVIDE FUNDS FOR THE OPERATION OF THE MEDICAID AND NC HEALTH CHOICE PROGRAMS; TO AUTHORIZE THE USE OF THE MEDICAID TRANSFORMATION FUND FOR MEDICAID TRANSFORMATION NEEDS; TO REPEAL PAST DIRECTIVES TO ELIMINATE GRADUATE MEDICAL EDUCATION TO ALIGN WITH MEDICAID TRANSFORMATION; TO REVISE AND UPDATE HOSPITAL ASSESSMENTS IN A MANNER THAT WILL CONFORM WITH MEDICAID TRANSFORMATION; TO REVISE THE SUPPLEMENTAL PAYMENT PROGRAM FOR ELIGIBLE MEDICAL PROFESSIONAL PROVIDERS AND TO ENACT THE MEDICARE RATE SUPPLEMENTAL AND DIRECTED PAYMENT PROGRAM; TO CREATE THE HOSPITAL UNCOMPENSATED CARE FUND; AND TO CODIFY THE MEDICAID CONTINGENCY RESERVE.
Intro. by Dobson, Lambeth.

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Bill summary

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

Makes organizational changes.

Part I.

Directs that the act's implementation be in conjunction with the procedure for budget continuation under specified state law, with the act's provisions superseding conflicting state law.

Part II.

Appropriates $33,758,136 in recurring funds from the General Fund to the Department of Health and Human Services (DHHS), Division of Health Benefits, for the 2019-20 fiscal year for the Medicaid and NC Health Choice programs rebase.

Appropriates $28,617,655 in recurring funds from the General Fund to the Division of Health Benefits for the 2019-20 fiscal year for transitioning to Medicaid managed care.

Part III.

Directs the State Controller to transfer $193 million for the 2019-20 fiscal year from funds available in the Medicaid Transformation Reserve in the General Fund to the Medicaid Transformation Fund. Authorizes the transfer of funds from the Medicaid Transformation Fund to the Division of Health Benefits for payment of claims related to services billed under the fee-for-service payment model for recipients being, or who have been, transitioned to managed care (known as "claims run out"). Allows for transfer on an as-needed basis; deems transferred funds appropriated.

Authorizes $27,280,947 in nonrecurring funds to be transferred from the Medicaid Transformation Fund to the Division of Health Benefits for the 2019-20 fiscal year to provide the State share for nonrecurring qualifying needs, as defined, directly related to Medicaid transformation required by SL 2015-241, as amended. Allows for transfer on an as-needed basis. Requires the Division of Health Benefits to make transfer requests to the Office of State Management and Budget (OSBM), providing for the amount request and the nonrecurring qualifying need for which the funds are to be used. Requires OSBM to verify the amount and use, and that the amount requested provides a State share that will not result in total requirements that exceed $140 million in nonrecurring funds for the 2019-21 fiscal biennium, prior to any transfer. Mandates that any federal funds received in any fiscal year by the Division of Health Benefits that represent a return of State share already expended on a qualifying need related to the funds received by the Division under the act be deposited into the Medicaid Transformation Fund.

Part V.

The provisions of previous Part I have been moved to Part V with the following changes.

Amends new Article 7A, Hospital Assessment Act, of GS Chapter 108A, effective October 1, 2019. Amends the definition set forth for prepaid health plan (PHP) to make a statutory cross-reference rather than referencing a session law. 

Adjusts 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, 2019, through September 30, 2020, now providing for a base assessment rate of 1.77% (was, 3%) and a supplemental assessment rate of 2.26%.

Eliminates the directive for DHHS to submit any State Plan amendment or other documents necessary to the Center for Medicare and Medicaid Services (CMS) to implement the act.

Adds a new directive for 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, 2020.

Directs DHHS to establish a new fund code, Hospital Assessment Fund, to be used to support a decrease in the supplemental assessment or base assessment rates corresponding with the amount in the Fund.

Applicable for the 2019-20 fiscal year only, provides for the transfer of over-realized receipts from the supplemental and base assessments, based on the amount anticipated in the Governor's proposed base budget for the Division of Health Benefits for the fiscal year, as follows: $45 million transferred to the Hospital Assessment Fund, or if the total amount of over-realized receipts is less than $45 million, then the full amount to the Hospital Assessment Fund; and the remainder, after the $45 million transfer, if appropriate, to the Medicaid Transformation Reserve. Requires OSBM to certify that there will be over-realized receipts for the 2019-20 fiscal year from the supplemental and base assessments, and that the amounts transferred are in compliance with these provisions, prior to transferring any amount. 

Part VI.

The provisions of previous Part III have been moved to Part VI with the following changes.

Modifies the terminology used in the directives concerning the supplemental payment program for eligible medical professional providers to now refer to "supplemental payments for services provided by eligible medical providers," rather than "supplemental payments made to eligible medical providers."

Additionally repeals Section 12H.13(e) of SL 2013-360, which reduced the percentage of allowable costs for hospitals payments from 80% to 70%, and Section 12H.13A of SL 2014-100, which sets the settlement for outpatient Medicaid services performed by UNC Hospitals and Vidant Medical Center at 70% of costs.

Eliminates the provisions of previous Part IV, which directed DHHS to create the Medicare Rate Supplemental and Directed Payment Program; enacted Part 3, Professional Assessment, to Article 7A of GS Chapter 108A; and directed DHHS to submit a State Plan amendment and any necessary documents to CMS to implement the Program and the Professional Assessment. 

Part VII.

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 by OSBM, 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 VIII.

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 (1) make payments to institutions for mental diseases, as defined by federal law and (2) make payments 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 IX.

Changes the effective date of the act to the date the act becomes law, unless otherwise provided (was, July 1, 2019). Makes conforming changes to the act's titles.

© 2019 School of Government The University of North Carolina at Chapel Hill

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