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

Amends the act's short and long titles.

Amends Section 3 of SL 2015-245 to require DHHS (Department of Health and Human Services), instead of its Division of Health Benefits, to meet several Medicaid transformation reporting and development requirements. This replacement was made necessary due to the changes made to Section 4 of the same session law, which now provides that DHHS alone (previously, DHHS through the Division of Health Benefits) is responsible for the planning and implementation of the Medicaid transformation pursuant to SL 2015-245. Further amends Section 4 of SL 2015-245 concerning services not covered by capitated prepaid health plans (PHPs) contracts, adding four new services not covered, including services provided through the Program of All-Inclusive Care for the Elderly program and services provided pursuant to a contract with Children's Developmental Services Agencies. Makes clarifying and organizational changes. Also amends the provisions concerning the populations covered by PHPs, adding five new classes of individuals that are not covered, including medically needy Medicaid recipients, members of federally recognized tribes, or undocumented aliens that qualify for emergency services under 8 USC 1611. Further provides that there can be up to 12 contracts (previously, allowed up to only 10 contracts) between the Division of Health Benefits and a Provider-led entity (PLE). 

Amends Section 5 of SL 2015-245, updating and replacing references to the phrase "DHHS through the Division of Health Benefits" with "DHHS." Also amends provisions concerning the designation of Medicaid and NC Health Choice providers as essential providers, adding State Veterans Homes to the list of providers that at a minimum are designated essential providers. Further amends Section 8 and 9 of the session law, updating and correcting references to "DHHS through the Division of Health Benefits" to just "DHHS." Also amends Section 10 of SL 2015-245 by making DHHS responsible for implementing the Medicaid transformation and operating all functions, powers, duties, obligations, and services related to the transformed Medicaid and NC Health Choice programs (previously these were responsibilities of the Division of Health Benefits). Also adds language that allows the Secretary of DHHS to appoint a Director of the Division of Health Benefits prior to GS 143B-216.85 (Appointment; term of office; and removal of the Director of the Division of Health Benefits) becoming effective.

Amends GS 143B-216.80, creation of the Division of Health Benefits, providing that the Division of Health Benefits will be vested with all functions, powers, duties, obligations, and services that were previously vested in the Division of Medical Assistance once the Division of Medical Assistance has been eliminated. Makes organizational and clarifying changes and also adds a new subsection (b), which substantively was previously found in GS 108A-54 (g), which sets out certain exemptions, limitations, and modifications for the Division of Health Benefits, including that employees of the Division are not subject to the NC Human Resources Act, except as provided, and that the Secretary can retain private legal counsel as provided.

Amends GS 108A-54, concerning the authorization of the Medical Assistance Program, providing that DHHS will continue to administer and operate the Medicaid and NC Health Choice program through the Division of Medical Assistance until the Division of Medical Assistance is eliminated, at which time all such powers and duties will be vested in the Division of Health Benefits. Makes clarifying and conforming changes. Deletes provisions from (g) which are now substantively found in GS 143B-216.80.

Amends GS 143B-139.6C(d), the definitions section concerning the cooling-off period for certain DHHS employees, making organizational and clarifying changes, as well as providing that if an employee or contract employee of DHHS within the previous six months personally participated in (in addition to regulatory or licensing decision that applied to the vendor): (1) an audit, decision, investigation, or other action that affected the vendor, or (2) the award (was, award or management) of a contract to the vendor, then that employee is considered a former employee of DHHS for the purposes of the cooling off period and prohibition on contracting with former employees of DHHS.