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

Amends Section 4 of SL 2015-245 to provide that the required capitated contracts will not cover: (1) services provided directly by a Children's Developmental Services Agency (CDSA) or by a provider under contract with a CDSA if the service is authorized through the CDSA and is included on the child's Individualized Family Service Plan (was, services provided pursuant to a contract with Children's Developmental Services Agencies only) and (2) services for Medicaid program applicants during the period of time prior to eligibility determination (was, services for Medicaid program applicants during the three-month retroactive eligibility period, with services provided during a prospective 12-month continuous enrollment period covered by the capitated contracts). Amends the categories that do not have to be covered by capitated PHP contracts to also exclude recipients who participate in the North Carolina Health Insurance Premium Payment program. Amends the existing exclusions to remove language that required presumptively eligible recipients who submit a full Medicaid application and are determined eligible for the Medicaid program to be covered by capitated contracts during the prospective 12-month continuous enrollment period after they have been determined eligible. 

Amends SL 2015-245 by adding a new section that authorizes the Department of Health and Human Services (DHHS) to seek approval from the Centers for Medicare and Medicaid Services (CMS) through the 1115 waiver to allow parents to retain Medicaid eligibility while their child is being served temporarily by the foster care program. States the General Assembly's intent to expand Medicaid eligibility to cover this population upon implementation of the 1115 waiver, if CMS approves this coverage in the waiver. 

Amends the powers of the Secretary of the Department of Health and Human Services in GS 108A-54 to clarify that in administering and operating the Medicaid and NC Health Choice programs, the total expenditures must not exceed the authorized budget for the Medicaid program and NC Health Choice program.