Includes whereas clauses discussing the NC Medicaid program.

Enacts new GS Chapter 108E, Medicaid Accountable Care Organizations (ACOs), wherein is found the provisions for the establishment of a Medicaid ACO Program to reform the current fee-for-service system in a manner modeled by the federal Medicare Shared Savings Program. Provides that the intent of the General Assembly is that all Medicaid beneficiaries will receive services through a Medicaid ACO.

Sets out terms and definitions for use in this Chapter, including ACO and Local Management Entity Managed Care Organization.

Gives the Secretary of DHHS (Secretary) 16 specific duties regarding the development of the ACO Program, including overseeing the development and implementation of the Medicaid ACO Program and adopting rules for public reporting by the Medicaid ACO of quality measures and organizational information.

Requires DHHS to develop a process to certify applicants for participation in the Medicaid ACO Program and to ensure approved applicants meet the specified minimum requirements. Sets out information and  capabilities required in order to be certified as an ACO, including a requirement that the applicant commit to becoming accountable for the quality, cost, and overall care of the beneficiaries assigned to it.

Sets out organizational and governance requirements for ACOs, including that they are recognized and authorized to conduct business in North Carolina. Sets out five ways or combinations in which a Medicaid ACO can be sponsored and constituted, including networks of individually licensed health care providers or joint venture arrangements of hospitals and health care providers.  Sets out further governance requirements, such as requiring that the ACOs must be managed by a designated exedcutive and have a management structure that includes administrative and clinical controls. Requires governance by a body with authority to execute statutory functions of the ACO. Board must be comprised of a majority of health care providers or hospital representatives, with at least one individual representing the community without a conflict of interest with the ACO.

Sets out compliance and cooperation requirements as well as prohibited acts. Requires tax identification and national provider numbers to be submitted to DHHS. Requires ACOs to have a compliance plan that must include five things, including a lead compliance officer, mechanisms for identifying compliance issues, as well as compliance training. Prohibits ACOs from offering gifts, cash, or other remuneration to beneficiaries for choosing a particular provider. Also prohibits certain activites that would prevent an assigned beneficiary from receiving entitled benefits.

Provides limitations for primary care physicians (PCPs), including that PCPs can only be affiliated with one ACO at a time, while all other providers and facilities can be associated with one or more ACOs. Requires ACOs to have enough PCPs to serve a sizeable and diverse Medicaid population and have, at all times, the capacity to serve at least 5,000 Medicaid beneficiaries.

Sets out process by which eligibile beneficiaries are assigned to ACOs, providing that assignment of beneficiaries is based on the beneficiary's selection of a PCP. Sets out other assignment procedures, as well as assignment of beneficiaries receiving limited Medicaid benefits.

Requires DHHS to develop a formal methodology for determining a Medicaid ACO payment model. Requires stakeholder input and validation by an independent actuary in the creation of the methodology. Sets out three detailed features that, to the extent actuarially sound, must be incorporated in the payment model, including (1) a set of Medicaid-covered/NC Health Choice covered services to be included in the pool of funds for which ACOs will share savings and losses, (2) a process to determine and establish spending benchmarks for ACOs, and (3) a process to compute savings and losses and the share of savings owed to the ACO by the state or the share of loss owed to the state.  Includes further details on the above three features of the payment system. Also requires DHHS to devise and implement a savings and loss arrangement for outpatient prescription drugs where ACOs and LME/MCOs jointly participate in the cost outcomes for beneficiaries. Sets out further requirements for this arrangement. Requires ACOs to be responsible for receiving and distributing shared savings and shared losses, and submitting repayment to DHHS.  Exempts certified ACOs from Department of Insurance Licensure.

Sets out requirements to use stakeholder input to develop specified medical quality measurement protocols and benchmarks. Requires ACOs and DHHS to share specified clinical data for quality measurements such as health needs assessments, care coordination, treatment, health care operations, and performance evaluation. Provides that the above data and information disclosures will and must comply with HIPAA.

Authorizes DHHS, subject to approval by the Centers for Medicare & Medicaid Services, to develop different types  of pilot projects, such as a model where an ACO assumes greater risk for health costs and quality than specified in this Chapter. Requires DHHS to regularly report to the Joint Legislative Oversight Committee.

Provides an immunity clause for state action in undertaking the Medicaid ACO program, specifically from state and federal antitrust laws. Provides limits on state immunity.

Sets out plan for applying for state plan amendments and waivers in order to implement GS Chapter 108E.

Amends GS 150B-1(d), to provide that Article 2A of GS Chapter 50B, Administrative Procedure Act rulemaking requirements, do not apply to DHHS with respect to GS Chapter 108E.

Amends GS 143C-9-1(a), to provide that the state's share of savings from the Medicaid ACO Program will go into the Medicaid Special Fund. Makes conforming changes.

Requires DHHS to annually evaluate the Medicaid ACO Program to assess cost savings realized through implementation. Results are to be reported to the Joint Legislative Oversight Committee on Health and Human Services.

Provides limitation clauses for the act, providing nothing in the act can or will be construed to limit choice or access for any type of health care services or preclude qualified providers from participating in other ACOs.

Appropriates $1 million from the General Fund to DHHS for necessary changes to NCTracks, benchmark setting and actuarial validation, and costs incurred to otherwise implement this act.  Effective July 1, 2014.

Directs DHHS to report to the Joint Legislative Oversight Committee on Health and Human Services by February 16, 2015, on the findings and recommendations of the Department's strategic planning for long-term services and supports for Medicaid beneficiaries.