Includes whereas clauses.

Directs the Division of Health Service Regulation (DHSR) of the Department of Health and Human Services (DHHS) to issue approval of licensure or provisional licensure when provided with a staffing plan by the mental health, intellectual and developmental disabilities, and substance use services (MH/IDD/SUS) provider agency seeking licensure. Subjects denial of provisional licensure to the Administrative Procedure Act's contested case provisions. Grants DHSR emergency rulemaking authority to immediately implement required changes and involve MH/IDD/SUS provider agencies in the process. Requires filing emergency rules within 60 days of October 1, 2023. 

Directs DHSR to collaborate with MH/IDD/SUS provider associations to establish a quality dashboard that addresses agency performance and identifies trends and outcomes of DHSR reviews. Lists dashboard requirements, including monthly publishing and distribution mandatory data points such as the number of licenses granted, number of citations by class of violation, and number of disciplinary actions by type; and quarterly reporting to the specified NCGA committee of the monthly dashboard reports along with steps for improvement of the licensure process.

Directs DSHR to review findings, trends, and actions of the office of competent jurisdiction, the DHHS Hearing Office, and the Office of Administrative Hearing (OAH) as a component of the dashboard. Requires DSHR to meet annually with stakeholders for this purpose, subject to provider confidentiality. Requires additional training of supervisors in the Mental Health Licensure and Certification Section of DHSR if at least 25% of MH/IDD/SUS cases filed in OAH are overturned within any quarter, with DHSR required to conduct determine the root cause and identify strategies to address the issues found.

Lists 13 requirements of DHSR and staff relating to adequate notice of MH/IDD/SUS provider site visits, inspections, and provider reviews, including: (1) limiting investigations resulting from a complaint to the issue identified in the complaint unless surveyors visibly identify any health and safety issue not in the complaint; (2) providing a written report to a provider within five days of the visit, inspection, or provider review that includes notice of due process rights; (3) adopting rules that define specified terms relating to site visits, inspections, provider reviews, and investigations; (4) adopting clear rules of engagement and standard operating procedures for interviews with clients and agency staff; (5) requiring staff conducting interviews with clients to be properly trained and certified in forensic interviewing techniques, with annual inter-rater reliability training required annually; and (6) barring any ombudsman for the Medicaid program from serving as mediator between any licensed facility and DHSR.

Requires DHSR to establish a procedure for a reconsideration review hearing before a provider may file a petition for a contested case hearing with OAH. Directs DHSR to include with any notice of adverse action issued to a provider the non-exclusive right to request reconsideration review with DHHS within 30 days of receipt. Requires the assigned hearing officer to conduct the hearing within 15 days after receipt of the request, unless all parties agree to postponement, and to make a determination within 30 days of the hearing. Allows the provider to choose the format of the review. Requires DHSR to amend its rules to deem DHSR responsible for all legal fees and costs related to any proceedings if a provider agency contests a decision and is successful.

Grants DHHS authority to adopt or amend rules necessary for implementation.

Appropriates $100,000 from the General Fund to DHSR to implement the act. 

Effective October 1, 2023.