States the General Assembly’s intent to integrate all of the Alcohol and Drug Abuse Treatment Centers (ADATCs) under the jurisdiction of the Department of Health and Human Services (DHHS) Secretary, as identified in GS 122C‑181 into the array of publicly funded substance abuse services managed by the Local Management Entity/Managed Care Organizations (LME/MCOs) over a three‑year period, beginning no earlier than July 1, 2016, and ending with full integration by June 30, 2019.

Requires that DHHS, by April 1, 2016, submit a three-year transition business plan for integrating all ADATCs into the array of publicly funded substance abuse services managed by the LME/MCOs  to the Joint Legislative Oversight Committee on Health and Human Services. Specifies the five components that must be in the plan, including: (1) the projected demand by LME/MCOs for substance abuse services provided by the ADATCs during (i) each fiscal year of the transition period and (ii) the first three fiscal years subsequent to full integration of the ADATCs into the array of publicly funded substance abuse services managed by the LME/MCOs, (2) procedures for making operational adjustments at each of the ADATCs during the transition period based upon the demand for services and the availability of funding to provide these services, and (3) a method for establishing and updating the rates paid by LME/MCOs for substance abuse services provided by ADATCs to individuals receiving these services under the management of the LME/MCOs.

States the General Assembly’s intent to gradually terminate all direct state appropriations for ADATCs by the beginning of the 2019‑20 fiscal year and instead reallocate this funding to the DHHS Division of Mental Health, Developmental Disabilities, and Substance Abuse Services (DMH/DD/SAS) for community services in order to allow the LME/MCOs to assume responsibility for managing the full array of publicly funded substance abuse services, including those delivered through the ADATCs. Terminates all direct state appropriations for ADATCs effective July 1, 2019, and reallocates those appropriations to DMH/DD/SAS for allocation to the LME/MCOs. Requires the LME/MCOs to use these reallocated funds to manage and pay for the utilization of substance abuse treatment and services for individuals within their catchment areas.

Requires DMH/DD/SAS to: (1) calculate and notify each LME/MCO by August 1, 2015, of its estimated share of these fund allocations for each fiscal year of the transition period and specifies how the estimated share is determined and (2) as a condition of receiving its share of reallocated ADATC funds, require each LME/MCO to submit by February 1, 2016, a written transition plan describing how the LME/MCO plans to use these reallocated ADATC funds to build capacity for community‑based substance abuse services, reduce gaps in substance abuse services, purchase substance abuse services from the ADATCs, or do any combination thereof. Requires DMH/DD/SAS to review the written transition plans to ensure each LME/MCO proposes using these reallocated ADATC funds to purchase substance abuse services.

Requires each LME/MCO to: (1) submit a written transition plan to DMH/DD/SAS by February 1, 2016, describing how it plans to use reallocated ADATC funds to build capacity for community‑based substance abuse services, reduce gaps in substance abuse services, purchase substance abuse services from the ADATCs, or any combination thereof; (2) submit to DHHS Division of State Operated Healthcare Facilities (DSOHF) annually by February 1 its projected demand for ADATC services for the upcoming fiscal year; (3) enter into a contract, by April 1 of each year, with DSOHF for the ADATC services it intends to utilize during the next fiscal year; specifies terms that must be included in the contract; and (4) implement and enforce the prior authorization process established by DHHS, in consultation with the LME/MCOs, pursuant to this act.

States the General Assembly’s intent that at the end of the transition period, each of the ADATCs be wholly receipt-supported. Requires each ADATC to, during the transition period, annually evaluate and adjust their operations based upon the projected demand for services and the availability of funding to meet the demand for services from direct state appropriations and estimated receipts from Medicare, Medicaid, insurance, self-pay, and the LME/MCOs.

Requires DMH/DD/SAS, during the transition period, to monitor each of the following with respect to integration of the ADATCs into the array of publicly funded substance abuse services managed by the LME/MCOs: (1) expenditures by LME/MCOs and by ADATCs to ensure that North Carolina continues to meet the maintenance of effort requirements of the federal Substance Abuse Prevention and Treatment Block Grant, (2) efforts by each of the LME/MCOs to increase capacity for substance abuse treatment to ensure the development of community‑based services to meet the needs of individuals formerly served by the ADATCs, and (3) utilization by LME/MCOs of substance abuse services provided by the ADATCs.

Requires DHHS, beginning October 1, 2016, and annually thereafter until October 1, 2020, to report to the Joint Legislative Oversight Committee on Health and Human Services and the Joint Legislative Program Evaluation Oversight Committee on: (1) the status of fully integrating the ADATCs into the array of publicly funded substance abuse services managed by the LME/MCOs and (2) a breakdown of how direct state appropriations reallocated from the ADATCs to the LME/MCOs have been used to purchase substance abuse services.

Requires DMH/DD/SAS, in consultation with the LME/MCOs, to develop and submit to the Joint Legislative Oversight Committee on Health and Human Services, by January 15, 2016, a plan to strengthen performance management for the state's publicly funded substance abuse services. Encourages DHHS to consult with other divisions and specified agencies and entities in developing the plan. Specifies issues that must be addressed in the plan.