Conference report makes the following changes to the 3rd edition.

Makes organizational and technical changes. Amends the act’s long title.

Part XI

Section 11

Removes references to Part 3A, the Hospital Violence Protection Act.  Amends the first prong of the summary report requirement under GS 131E-88(b1) so that the report must contain the process for the development of the security risk assessment, including the types of professionals who participated in the development of the assessment (was, types of professionals involved in the assessment only). Adds new reporting prong so that the hospital must also include any barriers to fully implement the security risk assessment findings, and if applicable, any barriers to the required presence of a law enforcement officer, and the hospital’s planned efforts to overcome these barriers by June 1, 2025. Makes organizational change to the effective date. 

Adds the following new content:

Part XIII

Section 13

Increases the territorial jurisdiction of a UNC or UNC Health Care System campus police officer under GS 116-40.5 so that it also includes property managed or controlled by the officer’s employing institution (currently just property owned or leased). Replaces references to "teaching hospitals affiliated but not part of any UNC constituent institution" to "the UNC Health Care System." Amends UNC Health Care System’s Board of Directors' powers under GS 116-350.15(c)(14) as amended, so that it can also designate, employ, expend funds for, and otherwise engage legal counsel (including private counsel) in any matter it deems necessary to represent the interests of the system and its affiliates, component units, officers, or employees (currently, can just designate counsel and legal staff to represent it at certain commitment hearings held at UNC hospitals and affiliates). Makes technical and conforming changes to GS 116-350.105 (defense of actions of covered persons under system self-insurance plans). Adds new GS 131E-14.3 (lease or sale of hospital facilities to certain political subdivisions) allowing a municipality or hospital authority, or a nonprofit corporation controlled or established by a municipality or hospital  authority, to enter into any transaction or agreement with a political subdivision of the State established under GS 116-350.5, or any of that political subdivision's component units or System affiliates, for the direct or indirect lease, sale, conveyance, assignment, or acquisition of, or acceptance of membership interest in, a hospital facility or any part of a hospital facility, notwithstanding any applicable State law. Clarifies that no party to a transaction or agreement permitted by GS 131E-14.3 is required to comply with GS 131E-8 (sale of hospital facilities to nonprofits), GS 131E-13 (lease or sale of hospital facilities to or from for-profit or nonprofit corporations or other entities by municipalities and hospital authorities), or GS 131E-14 (lease or sale of hospital facilities to certain nonprofit corporations) in conjunction with entering into or effectuating any such transaction or agreement. Effective July 1, 2024.

Part XIV

Section 14

Encourages the Secretary of the Department of Health and Human Services (DHHS) and the local management entity/managed care organizations (LME/MCOs) to enter into any intergovernmental agreements allowable under federal and State law with the Eastern Band of Cherokee Indians to facilitate the use of tribal health facilities by any residents of the State seeking voluntary admission to those facilities or subject to involuntary commitment under State law. Specifies that these agreements may address matters such as transportation of individuals under involuntary commitment and assurances of compliance with State and tribal court orders, and other matters, as necessary. By February 1, 2025, requires DHHS, in consultation with the LME/MCOs, to report to the specified NCGA committee on whether any intergovernmental agreements have occurred and whether any legislative changes are necessary to further facilitate the use of tribal health facilities by state residents.

Part XV

Section 15

Amends Section 9D.9 of SL 2023-134 (2023 Appropriations Act) so that the $900,000 in nonrecurring funds appropriated to the Department of Health and Human Services, Division of Child Development and Early Education, to be allocated to the North Carolina Partnership for Children Inc. (NCPC) to provide the State portion of funding for the Tri-Share Child Care pilot program, does not revert at the end of the 2023-25 fiscal biennium but remains available for costs associated with the pilot program until spent. Designates NCPC as accountable for the programmatic and fiscal integrity of the Tri-Share Child Care program and services. Directs NCPC to implement standardized procedures to ensure the pilot program is operated consistently among all regional facilitator hubs. Sets a nine-month deadline from the date of the act for NCPC and the regional facilitator hubs to design the pilot program, establish the program infrastructure, and recruit participating child care providers and employers. Permits NCPC to contract with a third-party administrator to assist with centralized enrollment, payment processing, and other financial transactions. Requires NCPC to conduct financial and compliance monitoring of the regional facilitator hubs and the third-party administrator, if applicable. Requires program eligibility be based on standardized criteria. Makes technical, clarifying, and conforming changes.

Part XVI

Section 16

Directs the area director of Trillium Health Resources to submit for approval a new alternative board structure to the DHHS Secretary. Allows the Secretary to approve the new alternative board structure and appoint the initial board members without each county in the catchment area adopting a resolution approving the board structure or appointing the board members.

Part XVII

Section 17

Amends GS 90-3 (review panel for the state’s medical board) as follows: (1) now allows the public member to be a person who has previously served on that board, (2) provides for three-year terms ending December 31 of the last year of the term, (3) establishes term limits of two terms, (4) expands the criteria that the review board must consider in making member recommendations to include medical specialty.  

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

Section 4

Amends new GS 122C-115.5, pertaining to alignment of counties with an area authority to also require the DHHS Secretary (Secretary) to direct the dissolution of an area authority upon the Secretary's assumption of full control of all powers of an area authority under GS 122-125.

Amends GS 122C-115 (pertaining to the duties of counties and appropriation and allocation of funds by counties and cities) by reinstating the deleted provision that made this statute control when there is a conflict with GS 153A-77 (Authority of boards of commissioners over commissions, boards, agencies, etc.) or GS 122C-115.1 (County governance and operation of mental health, developmental disabilities, and substance abuse services program).

No longer repeals GS 122C-215 and instead makes the following changes to the statute. Expands upon when the Secretary may assume control of an area authority by providing that when the Secretary determines that an area authority is in imminent danger of failing financially; of failing to provide minimally adequate services to clients in need in a timely manner; or failing to execute on priority infrastructure, services, and supports needed across the State related to mental health, intellectual or other developmental disabilities and substance use disorder, the Secretary may assume control, in part or full, of the area authority and appoint an administrator to exercise the powers assumed by the Secretary. Requires the Secretary to give written notice to the area board and give the area authority an opportunity to be heard before assuming control. Makes conforming changes. Specifies that the assumption of control divests the area authority of its authority as to the powers assumed, which may include service delivery, in addition to the already included adoption of budgets, expenditure of money, and all other financial powers. Makes the existing provisions related to assumption of control applicable to the Secretary's assumption of partial control. Requires that when the Secretary assumes full control that the Secretary direct the dissolution of the area authority. Requires the Department of Health and Human Services (DHHS) to define specified terms as they are used in this statute and sets out requirements for adopting and changing those definitions.

Further amends GS 150B-1 to exempt DHHS from rulemaking with respect to the development of definitions under GS 122C-125.

Amends GS 108D-60 and GS 150B-1(e) by correcting statutory cross-references.

Section 5

Amends GS 122C-112.1 to require the Secretary to direct and oversee the allocation and use of single-stream funding to support the priority infrastructure, services, and supports, including those (was, limited to those) identified in the State Plan.

Makes a technical change to GS 122C-112.1.

Section 10

Amends GS 108A-55.4 as follows. Requires health insurers to respond within 60 days (previously no timeframe as specified) of receiving an inquiry from the Division of Health Benefits regarding a claim for payment for any health care item or service that is submitted no later than three years after the date of the provision of the health care item or service. Adds that all third parties requiring prior authorization of an item or service furnished to an individual eligible to receive medical assistance must accept an authorization provided by DHHS that the item or service for which third-party reimbursement is being sought is a covered service or item for that individual under the North Carolina Medicaid State Plan, or under a relevant waiver of the State Plan, as if that authorization is the prior authorization made by the third party for the item or service. Makes additional clarifying changes. Effective January 1, 2024.

Section 1

Repeals Section 9D.7(a) of SL 2022-74 (setting deadlines and initial terms for BH IDD tailored plans [integrated plans for individuals with behavioral health needs and intellectual/developmental disabilities, hereinafter referred to throughout this summary as Plans or Plan]). Sets new deadline for the Division of Health Benefits (DHB) of the Department of Health and Human Services (DHHS) to implement the Plans by no later than October 1, 2023, with its initial term ending on December 1, 2026, in alignment with the initial term of the standard benefit plan prepaid health plan capitated contracts.  Allows DHHS to extend the initial term of the Plans if it also extends standard benefit plan contracts so that both contracts are extended for the same amount of time. 

Section 2

Amends GS 108A-68.2 (pertaining to the Medicaid beneficiary management lock-in program [MLIP], which targets prescription drug substance abuse by restricting the pharmacy and prescribing physician of Medicaid beneficiaries who qualify for the program) as follows.

Changes the definition of Lock-in program from a requirement that a Medicaid beneficiary (Beneficiary) select a single prescriber and pharmacy to align it with the requirements of the federal Medicaid rule (42 CFR 431.54) that a requirement that restricts the number of prescribers from whom, and the number of pharmacies from which, a Beneficiary may obtain covered substances. Deletes provisions specifying that the statute does not apply to any MLIP for Medicaid or NC Health Choice beneficiaries who are not enrolled in a Prepaid Health Plan (PHP). Changes statutory reference from “prepaid health plan” to “PHP,” and makes conforming changes throughout. Deletes statutory criteria for PHP’s to develop MLIP’s for Beneficiaries and instead directs PHP’s to use the criteria set forth in DHHS’s Outpatient Clinical Coverage Policy. Allows Beneficiaries to choose up to two prescribers/pharmacies when medically necessary. Updates language for when a Beneficiary fails to designate prescribers/pharmacies to account for increase in number from one to two designees.  Adds language allowing a PHP to impose MLIP on Beneficiary for up to two years if it finds that the Beneficiary is using Medicaid services at a frequency or amount that is not medically necessary. Makes conforming change to GS 58-51-37(l) (authorizing lock-in programs under insurance policies for prescription drug coverage) to refer to GS 108A-68.2. Effective on the later of the date the act becomes law or the date that the NC Health Choice program is eliminated, as approved by the Centers for Medicare and Medicaid Services (CMS) in accordance with Section 9D.15(a) of SL 2022-74.

Section 3

Amends GS 108D-35(b) (pertaining to services covered by PHP’s) to require PHP capitated contracts to now cover substance abuse comprehensive outpatient treatment program services, substance abuse intensive outpatient program services, and social settings detoxification services, in addition to list of 15 already covered services. Makes conforming changes. Effective October 1, 2023.

Section 4.

Enacts new provisions pertaining to state, county, and area authority as part of the organization and delivery system of mental health, development disability, and substance abuse services under the Mental Health Act, Developmental Disabilities, and Substance Abuse Act of 1985 (Act), as follows.

Current law provides that within the public system of mental health, developmental disabilities, and substance abuse services, there are area, county, and State facilities. An area authority or county program is the locus of coordination among public services for clients of its catchment area (i.e., the geographic part of the state served by a specific area authority or county program). (GS 122C-101 and GS 122C-3(4)). Enacts GS 122C-115.5, pertaining to alignment of counties with an area authority. Prohibits counties from withdrawing from an area authority or an area authority from being dissolved without prior approval of the DHHS Secretary (Secretary). Allows for counties to realign with another area authority operating a Medicaid waiver upon approval of the Secretary. Allows for area authorities to add additional counties to their catchment area upon adoption of a resolution approved by a majority of the members of the area board and the approval by the Secretary. Requires Secretary to adopt rules to establish a process for county disengagement to ensure that provision of services is not disrupted by the engagement, the timing of the disengagement is accounted for and does not conflict with setting capitation rates, adequate notice is provided, and provisions exist for the distribution of any real property no longer within the catchment area of the area authority.  Requires Secretary to direct the dissolution of an area authority upon the termination of a BH IDD tailored plan contract with an area authority or upon the Secretary's delivery of a notice of noncompliance to an area authority. Lists 12 things that must occur relating to timing, provision of services, notice, reassignment and transfer of services, area cooperation, and funding when an area authority is dissolved at the discretion of the Secretary.

Enacts new GS 122C-115.6 pertaining to the transfer of area authority fund balance upon county realignment. Requires that a portion of the risk reserve and other funds of the area authority from which the county is disengaging to be transferred to the area authority with which the county is realigning. Specifies that the amount of risk reserve and other funds to be transferred must be determined by DHHS in accordance with a formula or formulas developed in accordance with GS 122C-115.6. Provides that the formula developed by DHHS must consider the stability of both the area authority from which the county is disengaging and the area authority with which the county is realigning. Requires the formula to support: (1) the ability for each area authority to carry out its responsibilities under State law; (2) the successful operation of the 1915(b)/(c) Medicaid waivers; (3) the capitated BH IDD tailored plans arrangements authorized by GS 108D-60(b), and (4) the successful operation of BH IDD tailored plans under 108D-60. Emphasizes that the formula must assure that the area authority from which the county is disengaging retains sufficient funds to pay any outstanding liabilities to healthcare providers, staff-related expenses, and other liabilities. Sets forth procedures for DHHS’s development/amendment of the formula, including submission of the draft to specified NCGA Committees, and public comment.  Exempts the development and application of the formula from rulemaking and contested case provisions of the APA.  Requires the DHHS, starting on July 15, 2023, and quarterly thereafter, to report to the specified NCGA Committees and the Fiscal Research Division any funds transferred as a result of disengagements during the previous quarter. 

Amends GS 122C-3 (definitions of the Act), as follows. Deletes the defined term state or local consumer advocate. Incorporates definition of standard benefit plan from GS 108D-1. Makes technical and organizational changes. Repeals GS 122C-112.1(a)(25), setting forth the Secretary’s power to adopt rules for determining minimally adequate services for purposes of GS 122C-124.1 (pertaining to actions by the Secretary when the area authority or county program is not providing minimally adequate services). 

Amends GS 122C-115 (pertaining to the duties of counties and appropriation and allocation of funds by counties and cities), as follows. Deletes language referencing 1915(b)/(c) Medicaid Waivers. Deletes provisions specifying minimum population requirements for catchment areas of area authorities and for the reduction of funds for local management entities (LME’s) that do not comply with the population requirements. Deletes provisions relating to county disengagement with LME or managed care organization and realignment. Makes conforming changes to delete language that is duplicative of new GS 122C-115.5. Deletes reference to county programs in bar on counties reducing funds to area authorities because of the availability of State funds or other fees for the area authority. Deletes statutory references to certain qualifying recipients and dates and changes the date that LME’s/managed care organizations (MCO’s) cease managing Medicaid services for all Medicaid recipients who are enrolled in a standard benefit plan to July 1, 2021. Makes clarifying changes. In provision authorizing LME’s/MCO’s to continue to operate certain behavioral health and developmental disability services for certain individuals, deletes statutory references to certain qualifying recipients and replaces it with catchall Medicaid recipients not enrolled in a BH IDD tailored plan, to indicate authorized recipients. Repeals GS 122C-115.3(h) (requiring the dissolution of area authority upon termination of a BH IDD tailored plan contract with an area authority effective until December 1, 2023) and GS 122C-124.1 (pertaining to actions by the Secretary when area authority or county program is not providing minimally adequate services).

Amends GS 122C-124.2 (pertaining to actions by the Secretary to ensure effective management of behavioral health services under the 1915(b)/(c) Medicaid Waiver) as follows. Makes conforming changes to incorporate new GS 122C-125.3 and deletes references to statutes repealed under the act. Deletes provisions pertaining to what the Secretary must do if they are not going to provide a local LME/MCO with a certificate of compliance or if they determine  it is not in compliance with certain contract requirements and instead requires the Secretary to direct the dissolution of the LME/MCO in accordance with “GS 122C-155.5(d)” (Appears to intend to refer to new GS 122C-115.5.)  Deletes further provisions relating the dissolution of a noncompliant LCO/MCO. Amends the term contract to include a contract for the operation of a BH IDD tailored plan.

Repeals GS 122C-125 (pertaining to area authority financial failure, state assumption of financial control), and GS 122C-125.2 (pertaining to LME/MCO solvency ranges).

Enacts new GS 122C-125.3, pertaining to LME/MCO solvency and corrective action plans, as follows. Requires DHHS to establish in its contracts with LME/MCOs, solvency standards based on industry-standard financial accounting measures, such as the current ratio of assets to liabilities, defensive interval ratio of current assets to average monthly expenditure, capital reserves, and profit and loss. Requires the contracts to contain the development of a corrective action plan when an LME/MCO does not meet the solvency standards specified in the contract. Requires DHHS to publish a dashboard on its website containing certain information for the LME’s/MCO’s each quarter. Sets forth notification provisions to the specified NCGA Committees when the dashboard is updated. 

Amends GS 108D-60(b) allowing DHHS to contract with entities providing BH IDD tailored plans for certain individuals who are excluded from PHP coverage, to replace the reference to PHP coverage with language authorizing that coverage for individuals who are not enrolled in a BH IDD tailored plan.  Adds new subsection authorizing four temporary delivery systems when an area authority is undergoing dissolution.

Makes conforming amendments to the APA as follows: (1) exempts DHHS from rulemaking with respect to the development and application of any formula under GS 122C-155.6 (appears to intend to refer to new GS 122C-115.6); (2) exempts DHHS’s actions taken under GS 122C-124.2 and GS 122C-115.5(d) and GS 122C-155.6 (appears to intend to refer to new GS 122C-115.6) from the contested case provisions.

Repeals Section 3.5A of SL 2021-62 (pertaining to transfer of area authority fund balances/county disengagement) and Section 9D.13(b) of SL 2022-74(b) (pertaining to certain changes related to the launch of BH IDD tailored plans). 

Section 5

Amends GS 122C-102(b) (pertaining to the contents of the State Plan for mental health, developmental disabilities and substance abuse services) to require the plan to also contain, in addition to the 12 other requirements, identification of priority infrastructure, services, and supports that are needed across the State related to mental health, intellectual or other developmental disabilities, and substance use disorder.

Amends GS 122C-112.1(a)(pertaining to powers and duties of the Secretary) to require the Secretary to direct and oversee the allocation and use of single-stream funding to support the priority infrastructure, services, and supports identified in the State Plan). Amends GS 122C-112.1(b)(4) (list of things Secretary may do) to cross reference the new infrastructure requirement for the State Plan, described above. Makes technical changes. Enacts new subdivision GS122C-112.1(b)(4a) to authorize the Secretary to spend certain State funds for the priority infrastructure areas discussed above.

Section 6

Amends GS 122C-112.1(a)(6) to delete reference to county programs. Now requires Secretary to establish comprehensive, cohesive oversight and monitoring procedures and processes to ensure continuous compliance with third-party contractors of area authorities, in addition to other parties listed. Also now only requires Secretary to only include a monitoring mechanism for the progress of area authorities, not area authorities and county programs.  Deletes reference to required technical assistance.

Amends GS 122C-142(a) (pertaining to contracts for services by area authorities) as follows. Specifies that area authorities must assure that contracted services meet both State and federal laws and rules (currently, just references State laws and rules). Makes conforming changes to similarly refer to compliance with State and federal rules. If an area authority's oversight of a contract for services results in noncompliance, authorizes the Secretary to direct the area authority to cancel the contract for services.

Amends GS 122C-115.4(c) (pertaining to functions of LME’s) to specify that LME’s are also subject to contractual requirements established by the Secretary in addition to other limitations on its ability to subcontract its functions to another entity.  Requires LME’s to cancel a contract when directed to do so by the Secretary under GS 122C-142(a), as amended by the act.

Repeals GS 122C-115.4(f)(3) requiring the Commission to adopt rules on the notice and procedural requirements for removing one or more LME functions under GS 122C-115.4(d). Repeals GS 122C-115.4(d) and (e) pertaining to removal of LME’s.

Section 7

Amends GS 126-5 (listing employees subject to State Human Resources Act) to exempt employees of area mental health, developmental disability, and substance abuse authorities except as otherwise provided by law and all employees of area authorities from the State Human Resources Act. Applies to employees of area mental health, developmental disabilities, and substance abuse authorities, defined as area authorities under GS 122C-3, hired after the date the act becomes law.

Section 8

Amends GS 150B-1(e)(25) to expand DHHS’s exemption from the APA’s contested case provisions to also include disputes arising from a prepaid inpatient health plan, as defined in 42 CFR  438.2 and disputes arising from a primary care case management entity, as defined in 42 CFR 438.2.

Section 9

Retroactive to June 26, 2020, amends GS 108A-54.3A (pertaining to eligibility categories and income thresholds for Medicaid) to require that the applicable federal poverty guidelines for the eligibility categories will be updated annually on April 1 immediately following publication of those guidelines. Directs the Revisor of Statutes to implement technical correction to statutory citation.