House amendment #1makes the following changes to the 4th edition.

Amends new GS 122C-124.2 to provide that the independent review as specified in this section is to be provided by an External Quality Review Organization meeting certain requirements, beginning on February 1, 2014.

Assigns responsibility tothe Secretary of Health and Human Services (Secretary)as part of the the Secretary's duties in reassigninga contract to a compliant LME/MCO and overseeing the transfer of operations and contracts, to arrange for the service providers to be reimbursed from the remaining fund balance or risk reserve of the noncompliant local management entity/ managed care organization (LME/MCO), or from other funds of the Department of Health and Human Services (DHHS)if necessary, for all proper, authorized, and valid claims for services rendered that were not previously paid by the noncompliant LME/MCO.

Provides that with regards to the dissolution of a noncompliant LME/MCO, all of its assets, including any balance in its risk reserve are to be transferred to the compliant LME/MCO after reimbursements havebeen made to service providers under subdivision (1) of this subsection. Further clarifies the authorized use of risk reserve funds. Requires the Secretary to guarantee any needed riskreserves for the compliant LME/MCO arising from any additional assumedrisks until the compliant LME/MCO has established 15% risk reserves. Declares that any LME/MCO dissolved by the Secretary under this section may be dissolved at any time during the fiscal year.

Provides that adding one or more counties to an existing catchment area requiresthe adoption of a resolution to that effect by a majority of the area board and the approval of the Secretary (was, adoption of a resolution by the majority of the area board).

Amends GS 122C-115.3(e) to providefor the transfer of anyfund balance available to an area authority at the time of its dissolution, not used to pay liabilities, to the area authority contracted to operate the 1915(b)/(c) Medicaid Waiver in the catchment area of the dissolved authority (was, not used to pay liabilities pursuant to subsection (g) of this section). Provides that if the fund balance transfer is insufficient to constitute 15% of the anticipated operational expenses arising from the assumption of responsibilities from the dissolved area authority, then the Secretary is to guarantee the operational reserves for the area authority assuming the responsibilities under the 1915(b)/(c) Medicaid Waiver until the assuming authority has reestablished 15% operational reserves.

House amendment #2 makes the following changes to the 4th edition.

Makes the effective date for changes to GS 122C-115(a) January 1, 2014. Makes a conforming change to provide that except as specifically provided, this act is effective when it becomes law.