EYEGLASSES EXEMPTION FROM MEDICAID CAPITATION.

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View NCGA Bill Details2017-2018 Session
House Bill 156 (Public) Filed Tuesday, February 21, 2017
AN ACT TO REQUIRE MEDICAID PREPAID HEALTH PLANS TO OBTAIN A LICENSE FROM THE DEPARTMENT OF INSURANCE AND TO MAKE OTHER CHANGES PERTAINING TO MEDICAID TRANSFORMATION AND THE DEPARTMENT OF INSURANCE.
Intro. by McNeill, Lambeth, Dobson, Brisson.

Status: Ch. SL 2018-49 (House Action) (Jun 22 2018)

SOG comments (2):

Long Title Change

Senate committee substitute to the 1st edition makes changes to the long title. The original title is as follows:

AN ACT TO EXEMPT THE FABRICATION OF EYEGLASSES FROM CAPITATED PREPAID HEALTH PLAN CONTRACTS UNDER MEDICAID TRANSFORMATION.

Long Title Change

Conference report to the 2nd edition makes changes to the long title. The original title was as follows:

AN ACT TO REQUIRE MEDICAID PREPAID HEALTH PLANS TO OBTAIN A LICENSE FROM THE DEPARTMENT OF INSURANCE AND TO MAKE CHANGES PERTAINING TO THE OPERATION OF FOOD SERVICES AT CERTAIN STATE PROPERTIES AND FACILITIES.

Bill History:

H 156/S.L. 2018-49

Bill Summaries:

  • Summary date: Jun 25 2018 - View Summary

    AN ACT TO REQUIRE MEDICAID PREPAID HEALTH PLANS TO OBTAIN A LICENSE FROM THE DEPARTMENT OF INSURANCE AND TO MAKE OTHER CHANGES PERTAINING TO MEDICAID TRANSFORMATION AND THE DEPARTMENT OF INSURANCE. Enacted June 22, 2018. Effective June 22, 2018, except as otherwise provided.


  • Summary date: Jun 15 2018 - View Summary

    Conference report makes the following changes to the 2nd edition.

    Amends GS 58-93-2, setting out the definitions for the Prepaid Health Plan Licensing Act, by adding and defining commercial plan and provider-led entity. Amends the definition of prepaid health plan or PHP so that it is a commercial plan or provider-led entity holding a licensue under this Article for the purposes of operating a capitated contract for the delivery of services under the NC Medicaid and NC Health Choice Programs.

    Amends GS 58-93-5 to allow any commercial plan or provider-led entity (was, any entity) to apply for a license to operate as a PHP.

    Amends GS 58-93-10 to provide that the issuance of a PHP license is required when the specified conditions are met, except as provided in GS 58-93-5(c) (concerning an entity who is already a licensed health organization in the state).

    Makes a clarifying change in GS 58-93-70.

    Amends GS 58-93-92 by removing from the provisions applicable to PHPs GS 58-2-125 (authority over all insurance companies; no exemptions from license).

    Adds the following provisions. 

    Enacts new GS 58-67-12 allowing the Commissioner of Insurance to contract with consultants and other professionals to complete the regulatory activities required under the Health Maintenance Organization Act.

    Amends GS 58-67-95 to allow a prepaid health plan licensed to do business in the state to organize and operate a health maintenance organization. Requires demonstration of compliance with the Article.

    Enacts new GS 108A-68.2 allowing a prepaid health plan to develop a lock-in program (requiring the individual to select a single prescriber and a single pharmacy for obtaining covered substances) for Medicaid or NC Health Choice beneficiaries who (1) have filled six or more prescriptions for covered substances in two consecutive months, (2) have received prescriptions for covered substances from three or more providers in two consecutive months, and (3) are recommended for the program by a provider. Defines covered substances to mean any controlled substance identified as an opioid or benzodiazepine, excluding benzodiazepine sedative-hypnotics, contained in Article 5 of GS Chapter 90, unless one of the following conditions are met: (1) the Department of Health and Human Services (DHHS) specifically identifies the opioid or benzodiazepine as a substance excluded from coverage by the Medicaid Beneficiary Management Lock-In Program, then the opioid or benzodiazepine is not a covered substance; (2) if DHHS specifically identifies a controlled substance contained in Article 5 of GS Chapter 90 other than an opioid or benzodiazepine as a controlled substance  covered by the Medicaid Beneficiary Management Lock-In Program, then the controlled substance is a covered substance. 

    Enacts GS 58-51-37.1 to allow an insurer to develop a lock-in program as part of a health benefit plan for insureds who (1) have filled six or more prescriptions for covered substances in two consecutive months, (2) have received prescriptions for covered substances from three or more providers in two consecutive months, and (3) are recommended for the program by a provider. Makes conforming changes to GS 58-51-37.

    These new provisions above are effective when the act becomes law.

    Amends SL 2015-245, as amended, Section 3, by requiring that capitated contracts begin 18 months after the date that CMS approves the 115 demonstration waiver request and allows DHHS to phase recipient enrollment on a regional basis, if it is complete no later than five months after the date that the contracts are required to begin. Amends Section 4 to exclude from PHP coverage recipients who are enrolled in both Medicare and Medicaid for whom Medicaid coverage is limited to the coverage of Medicare premiums and cost sharing. Adds that the following recipients must not be covered by PHPs for a time period determined by DHHS, not to exceed five years after the date that the capitated PHP contract begins: recipients who (1) reside in a nursing facility and have or are likely to do so for 90 days or longer and are not being served through the Community Alternatives Program for Disabled Adults (CAP/DA) and (2) are enrolled in both Medicare and Medicaid and for whom Medicaid coverage is not limited to the coverage of Medicare premiums and cost sharing. Amends Section 4 to provide that a recipient of any of the categories excluded form PHP coverage who is eligible to receive a service that is not available in the fee-for-service program but is offered by a PHP to enroll in a PHP. Amends Section 5 by amending the DHHS responsibility for setting capitation rates to add that the capitated PHP contracts must not require any withhold arrangements during the first 18 months of demonstration. Sets limits on any withhold arrangements after that time. Amends the required contract terms for contracts with capitated PHP contracts to set a minimum medical loss ratio and to require terms that  ensure PHPs will be subject to certain specified requirements of GS Chapter 58. Ads that PHPs must implement an Advanced Medical Home care management program but are not required to contract with any particular entity. Makes conforming changes.

    States the General Assembly's intent to enact legislation, no later than March 15, 2019, that will ensure that the premium tax levied under GS 105-228.5 applies to capitation payments received by Prepaid Health Plans. Provides that until March 15, 2019, or such earlier date as the legislation is enacted, DHHS must plan for the implementation of Medicaid transformation with the assumption that the legislation will be enacted. If the General Assembly has not ratified the legislation by March 15, 2019, then DHHS must plan for the implementation of Medicaid transformation with the assumption that the legislation will not be enacted, and must correct all actions taken in reliance on the previous assumption. Requires DHHS by October 1, 2018, to submit a report to the Joint Legislative Oversight Committee on Medicaid and NC Health Choice containing proposed legislative changes necessary to accomplish the intent above. Provides that GS 143C-5-2, order of appropriations bills, does not apply to legislation that is introduced in the 2019 General Assembly that contains the legislative changes necessary to accomplish this intent.

    States the General Assembly's intent to enact legislation during the 2019 Regular Session that will replace the Hospital Provider Assessment Act with a similar hospital provider assessment that will preserve existing levels of funding generated by the current assessment and will result in similar overall payment levels to hospitals. Requires DHHS by October 1, 2018, to submit a report to the Joint Legislative Oversight Committee on Medicaid and NC Health Choice containing proposed legislative changes necessary to accomplish this intent. GS 143C-5-2, order of appropriations bills, does not apply to legislation that is introduced in the 2019 General Assembly that contains the legislative changes necessary to accomplish this intent.

    Sets out the time frame within which DHHS must issue the requests for proposals required by Section 5 of SL 2015-245.

    Makes conforming changes the act's titles.


  • Summary date: Jun 22 2017 - View Summary

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

    Deletes all provisions of the 1st edition and replaces it with the following.

    Amends the long title.

    Enacts new GS Chapter 58, Article 93 (Prepaid Health Plan Licensing Act) as follows.

    New GS 58-93-1 names the article.

    New GS 58-93-2 Defines eight terms. Defines enrollee as a beneficiary enrolled to receive Medicaid or NC Health Choice services through a Prepaid Health Plan.

    New GS 58-93-3 directs the Commissioner of Insurance (Commissioner) to work with the Department of Health and Human Services (DHHS) to maximize federal reimbursement of DHHS's expenses in administering this Article to the extent allowed under federal law.

    New GS 58-93-4 authorizes the Commissioner to contract with professionals to expedite and complete the application process, examinations, and other regulatory activities required under this Article, with costs to be reimbursed by the applicant or licensee. Exempts contracts under this statute from GS 114-2.3 and GS 147-17, which relate to hiring private counsel, and GS Chapter 143, Articles 3 (Purchases and Contracts), 3C (Contracts to obtain consultant services), and 8 (Public contracts), and accompanying rules and procedures regarding procurement, contracting, and contract review.

    New GS 58-93-5 authorizes any entity to apply to the Commissioner for a license to operate a prepaid health plan (PHP, as defined). Requires license applications to be verified by an officer or authorized representative of the applicant, to be in a form prescribed by the Commissioner, and to include thirteen listed articles of information, including a copy of the applicant's organizational documents, if any. Provides that already-licensed health organizations in the State under GS Chapter 58 are recognized as PHPs under this Article, and shall be issued a PHP license upon the licensed health organization's demonstration to the Commissioner of compliance with this Article. Licensed health organizations are not required to file PHP applications, pay an application fee, or provide notice required under this statute as a condition of receipt of a PHP license. Licensed health organizations are subject to the remaining requirements of this Article unless otherwise exempted. Requires PHPs to file notice describing any significant modification of the operation set out in the articles of information required with an application for approval by the Commissioner prior to the modification. The Commissioner's failure to disapprove a modification within 90 days of the filing deems the modification to be approved. Requires PHPs to file all subsequent changes in the information or forms required by the Article with the Commissioner. Directs the Commissioner to regularly provide DHHS with information and documentation related to licensing and regulation of PHPs.

    New GS 58-93-10 authorizes the Commissioner to make any examination the Commissioner deems expedient prior to issuing or continuing any PHP license. Directs the Commissioner to issue a license upon the payment of the application fee under GS 58-93-14, and upon being satisfied on all of five listed points, including that the applicant has complied with the application requirements of GS 58-93-5. Provides that a license shall be denied only after compliance with GS 58-93-75.

    New GS 58-93-14 directs the Commissioner to establish two fees: an application fee of up to $2,000 for entities filing an application to be licensed as a PHP under this Article, and an annual PHP license continuation fee of up to $5,000. Provides that PHP licenses continue in full force and effect subject to timely payment of the annual license continuation fee and subject to any other provisions of this Chapter applicable to PHPs.

    New GS 58-93-15 requires all deposits under this statute to be administered under Article 5 of this Chapter. Directs the Commissioner to require a minimum deposit of $500,000 or higher for the protection of enrollees. For licensed health organizations, this deposit is in addition to any other deposit required by the Commissioner. Deposits under this statute are not subject to GS 58-62-95 (Use of deposits made by impaired insurer).

    New GS 58-93-20 prohibits PHPs from entering exclusive management or custodial agreements unless the agreement is first filed with the Commissioner and approved under this statute within either 45 days of filing or a reasonable extended period as specified by notice from the Commissioner given within 45 days of the filing. Directs the Commissioner to disapprove an agreement if the Commissioner determines that the agreement does any of five listed things, including subjecting the PHP to excessive charges.

    New GS 58-93-25 provides that directors, officers, trustees, managers, and partners of PHPs who receive, collect, disburse, or invest funds in connection with the PHP's activities have a fiduciary relationship to the enrollees and the State with regard to those funds.

    New GS 58-93-30 subjects every PHP under this Article to GS 58-2-165 (regarding required regular statements to the Commissioner).

    New GS 58-93-35 requires the funds of a PHP to be invested or maintained only in securities, other investments, or other assets permitted by State law for the investment of assets constituting the legal reserves of life insurance companies or other such securities or investments as the Commissioner may permit. Creates two exceptions, including one for investing to purchase, lease, construct, renovate, operate, or maintain a hospital, medical facility, ancillary equipment to such, or any property reasonably required for the transaction of a PHP's business. Directs the Commissioner to disallow investment if the Commissioner determines that the investment would substantially and adversely affect the financial soundness of the PHP and endanger its ability to meet its obligations.

    New GS 58-93-40 authorizes the Commissioner to examine the affairs of any PHP as the Commissioner determines is necessary to protect the interest of the enrollees or the State, and at least once every five years. Requires examinations to be conducted under GS 58-2-131 through GS 58-2-134 (regarding scope, authority, and procedure of examinations).

    New GS 58-93-45 authorizes the Commissioner to order a PHP whose financial condition indicates that its continued operation might be hazardous to enrollees, creditors, the general public, or the State to take action as may reasonably be necessary to rectify the existing condition, including specified steps such as reducing the total amount of present and potential liability for health care services by reinsurance, or four other specified actions. Authorizes the Commissioner to consider any of the standards under GS 58-30-60(b) (for determining whether the continued operation of a licensed insurer is hazardous) in determining whether the PHP's continued operation is hazardous. Remedies under this statute are in addition to the remedies and measures available to the Commissioner under Article 30 of this Chapter (Insurers Supervision, Rehabilitation, and Liquidation). Directs the Commissioner to notify the Secretary of DHHS prior to taking any action against a PHP under this statute.

    New GS 58-93-50 directs the Commissioner to require deposits under GS 58-93-15. Requires PHPs to maintain minimum capital and surplus of the greater of $1 million or the amount required under the risk-based capital provisions of Article 12 of this Chapter. Requires PHPs to at all times maintain an adequate plan for protection against insolvency acceptable to the Commissioner. Authorizes the Commissioner to consider a preapproved reinsurance agreement covering excess loss, stop loss, or catastrophes, or any other arrangements offering protection against insolvency required by the Commissioner, in determining the adequacy of such a plan.

    New GS 58-93-55 directs the Commissioner to require each PHP to have a plan for handling insolvency that allows for health care services to be provided to enrollees until the PHP's non-voluntary enrollees are enrolled in another PHP. Authorizes the Commissioner to further require the plan to have any of five listed things, including insolvency reserves.

    New GS 58-93-60 requires PHPs, when determining liability, to include an amount estimated in the aggregate to provide for unearned capitation payments, the payment of all claims for health care expenditures that have been incurred that are unpaid and for which the PHP may be liable, and the expense of adjustment or settlement of these claims. Requires liabilities to be computed under the Commissioner's adopted rules, as specified.

    New GS 58-93-65 authorizes the Commissioner to suspend or revoke a PHP license if the Commissioner finds that the PHP meets any of five listed requirements, including that the PHP is operating in a manner that would be hazardous to its enrollees or to the state. Requires licenses to be suspended or revoked only after compliance with GS 58-93-75. Prohibits PHPs whose licenses are suspended from enrolling additional enrollees, except newborn children or other newly acquired dependents of existing enrollees, or engaging in advertising or solicitation, for the duration of the suspension. Directs a PHP with a revoked license to immediately wind up its affairs and conduct no further business except as essential to the orderly conclusion of the PHP's affairs. Prohibits the PHP from engaging in advertising or solicitation. Authorizes the Commissioner to permit further operation of the PHP as would be in the best interest of the enrollees and the State. Directs the Commissioner to consult with the Secretary of DHHS prior to taking any action against a PHP under this statute.

    New GS 58-93-70 deems the rehabilitation or liquidation of a PHP to be the rehabilitation or liquidation of an insurance company, to be conducted under the supervision of the Commissioner under Article 30 of this Chapter. Authorizes the Commissioner to apply for an order directing the Commissioner to rehabilitate or liquidate a PHP on one or more grounds under Article 30, or when the Commissioner is of the opinion that the PHP's continued operation would be hazardous either to the enrollees or to the State. Gives priority to DHHS's claims over all other claims in GS 58-30-220 (Priority of distribution), except for claims in GS 58-30-220(1) (the receiver's expenses for the administration and conservation of assets of the insurer).

    New GS 58-93-75 directs the Commissioner to give written notice to a PHP when the Commissioner has cause to believe that grounds for the denial of an application for a license, or for suspension or revocation of a license, exist. Provides requirements for the contents of the notice, including the date for a hearing. Directs the Commissioner, after the hearing or failure of a PHP to appear at the hearing, to take action as is deemed advisable and issue written findings, to be mailed to the PHP. Directs the Commissioner to provide DHHS with an explanation and a copy of the findings. Subjects the Commissioner's action to judicial review in the Superior Court in Wake County. Applies GS Chapter 150B (Administrative Procedure Act) to proceedings under this statute, to the extent they do not conflict with this statute.

    New GS 58-93-80 authorizes the Commissioner, in addition to or in lieu of suspending or revoking a license under GS 58-93-65, to proceed under GS 58-2-70 (Civil penalties or restitution for violation, administrative procedure), provided that the PHP has reasonable time to remedy the defect in its operations that gave rise to the procedure under that statute. Makes violation of this Article or any other provision of this Chapter that expressly applies to PHPs a Class 1 misdemeanor. Authorizes the Commissioner to give notice of a violation to any PHP that the Commissioner for any reason has cause to believe is violating or will violate any provision of this Chapter that expressly applies to PHPs, and arrange a conference with the alleged violators for the purpose of attempting to ascertain the facts, and to arrive at a means to correct or prevent the violation. Notice under this statute must also be provided to the Secretary of DHHS, who may be present at any proceedings under this statute. Proceedings under this statute are not governed by any formal procedural requirements, and may be conducted as the Commissioner deems appropriate. Authorizes the Commissioner to issue an order directing a PHP to cease and desist from a violation. Authorizes the respondent to such an order to request a hearing on the question of whether violations have occurred, which shall be conducted under GS Chapter 150B, Article 3A (Other administrative hearings), and subject to judicial review under GS Chapter 150B, Article 4. Authorizes the Commissioner to institute a proceeding to obtain injunctive relief from a violation, either instead of a cease and desist order or after refusal to comply with such an order. Directs the Commissioner to consult with the Secretary of DHHS prior to any action against a PHP under this statute.

    New GS 58-93-85 provides that all applications, filings, and reports under this Article are public documents unless otherwise determined by the Commissioner to be proprietary information. Information shared between DHHS and the Department of Insurance under this Article is confidential and not open to public inspection, unless the information is considered a public record or otherwise subject to disclosure. Such information that is not open to public inspection shall not be disclosed unless otherwise agreed to by both the Commissioner and the Secretary of DHHS.

    New GS 58-93-90 exempts PHPs that are not licensed health organizations and PHPs that are licensed health organizations in regards to activities that relate solely to the PHP's Medicaid or NC Health Choice Operations from this Chapter. Does not limit the Commissioner's authority over a PHP that is a licensed health organization in relation to activities that do not relate solely to the PHP's Medicaid or NC Health Choice Operations.

    New GS 58-93-91 authorizes the Commissioner to adopt rules to carry out this Article.

    New GS 58-93-92 lists 45 statutes that are applicable to PHPs in the manner in which they are applicable to insurers, including GS 58-2-125 (Authority over all insurance companies; no exemptions from license).

    Provides a severability clause for new GS Chapter 58, Article 93.

    Amends GS 58-62-21 (Coverage and limitations). Provides that GS Chapter 58, Article 62 (Life and Health Insurance Guaranty Association), does not provide coverage for health care benefits under the State's Medicaid program or NC Health Choice program.

    Amends GS 58-30-220 (Priority of distribution). Adds claims of providers, for prepaid health plans under GS Chapter 58, Article 93, who are obligated by statute, agreement, or court order to hold enrollees harmless, except for copayments and deductibles, from liability for health care services provided and covered by a PHP, to the order of distribution of claims. The new type of claim is listed as subsection (2b), making it fourth in priority out of seven types of claims.

    Enacts new GS 111-47.4. Provides that DHHS may operate or contract for the operation of food or vending services at State property or facilities allocated to the Department of Administration or the Department of Insurance, with net proceeds of revenue generated by those services to be credited to the Division of Services for the Blind within DHHS for the purposes in GS 111-43 (Installation of coin-operated vending machines). Does not remove any exemption granted under GS 111-42(c) (defining State property or State building).

    Amends GS 66-58 (Sale of merchandise or services by governmental units). Replaces the provision exempting the operation of lunch counters by DHHS as blind enterprises from the prohibition on the governmental sale of goods in competition with State citizens in subsection (a), with a provision exempting the operation of food and vending services under GS Chapter 111, Article 3 (Operation of Vending Facilities on State Property).

    Amends GS 146-29.1 (Lease or sale of real property for less than fair market value) to exempt leases entered into by DHHS for the operation of food and vending services under GS Chapter 111, Article 3, from that statute.

    The act is effective when it becomes law, and the amendments to GS 111-47.4, GS 66-58, and GS 146-29.1 expire five years from that date.


  • Summary date: Feb 21 2017 - View Summary

    As title indicates.