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.