FILED SENATE
Mar 29, 2023
GENERAL ASSEMBLY OF NORTH CAROLINA
S.B. 425
SESSION 2023 PRINCIPAL CLERK
S D
SENATE BILL DRS45195-MR-72
Short Title: Medicaid Agency Omnibus.-AB (Public)
Sponsors: Senators Krawiec, Burgin, and Corbin (Primary Sponsors).
Referred to:
1 A BILL TO BE ENTITLED
2 AN ACT TO UPDATE LAWS PERTAINING TO MEDICAID AND BEHAVIORAL
3 HEALTH.
4 The General Assembly of North Carolina enacts:
5
6 ACCOUNT FOR DELAY OF BH IDD TAILORED PLANS
7 SECTION 1.(a) Section 9D.7(a) of S.L. 2022-74 is repealed.
8 SECTION 1.(b) The Division of Health Benefits, Department of Health and Human
9 Services (DHHS), shall implement BH IDD tailored plans, as defined under G.S. 108D-1, no
10 later than October 1, 2023. The initial term of the BH IDD tailored plan shall end December 1,
11 2026, in alignment with the ending of the initial term of the standard benefit plan prepaid health
12 plan capitated contracts. If DHHS extends the standard benefit plan contracts, as authorized by
13 Section 7(b) of S.L. 2020-88, then DHHS shall offer to extend the initial term of the BH IDD
14 tailored plan contracts an equivalent amount of time.
15
16 REVISE MEDICAID PRESCRIPTION DRUG LOCK-IN PROGRAM
17 SECTION 2.(a) G.S. 108A-68.2 reads as rewritten:
18 "§ 108A-68.2. Beneficiary lock-in program for certain controlled substances.
19 (a) The following definitions apply in this section:
20 …
21 (2) Lock-in program. – A requirement that a Medicaid beneficiary select a single
22 prescriber and a single pharmacy for obtaining covered substances.A
23 requirement, consistent with 42 C.F.R. § 431.54(e), that restricts the number
24 of prescribers from whom, and the number of pharmacies from which, a
25 Medicaid beneficiary may obtain covered substances.
26 (3) Prepaid health plan or PHP. – As defined in G.S. 108D-1.
27 …
28 (d) This section does not apply to any lock-in program for Medicaid beneficiaries who
29 are not enrolled in a Prepaid Health Plan.
30 (e) A Prepaid Health Plan may PHP shall develop a lock-in program for Medicaid
31 beneficiaries who meet any of the following criteria:the criteria established in the Department's
32 Outpatient Pharmacy Clinical Coverage Policy adopted in accordance with G.S. 108A-54.2.
33 (1) Have filled six or more prescriptions for covered substances in a period of two
34 consecutive months.
35 (2) Have received prescriptions for covered substances from three or more
36 providers in a period of two consecutive months.
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 General Assembly Of North Carolina Session 2023
1 (3) Are recommended as a candidate for the lock-in program by a provider.
2 (f) A lock-in program developed pursuant to subsection (e) of this section shall comply
3 with all of the following:
4 (1) A beneficiary shall not be subject to the lock-in program until the Prepaid
5 Health Plan PHP has notified the beneficiary in writing that the beneficiary
6 will be subject to the lock-in program.
7 (2) A beneficiary subject to the lock-in program shall be given the opportunity to
8 select a single prescriber and a single pharmacy from a list of prescribers and
9 pharmacies in the Prepaid Health Plan's PHP's provider network. The
10 beneficiary may be allowed to select up to two prescribers and two pharmacies
11 when medically necessary, as designated by the State, in accordance with 42
12 C.F.R. § 431.54(e). For any beneficiary who fails to select a single prescriber,
13 the Prepaid Health Plan shall use algorithmic guidelines to assign the
14 beneficiary a single prescriber from a list of prescribers in the Prepaid Health
15 Plan's network. For any beneficiary who fails to select a single pharmacy,
16 prescribers or pharmacies, the Prepaid Health Plan PHP shall use algorithmic
17 guidelines to assign the beneficiary a single pharmacy from a list of
18 prescribers or pharmacies enrolled in the Prepaid Health Plan's PHP's
19 network.
20 (3) A beneficiary shall not be required to use the single prescriber or single
21 pharmacy selected for the lock-in program to obtain prescriptions drugs
22 covered by the Medicaid program or the Prepaid Health Plan PHP that are not
23 covered substances.
24 (f1) If a PHP finds that a beneficiary has utilized Medicaid services at a frequency or
25 amount that is not medically necessary, as determined in accordance with utilization guidelines
26 established by the State, the restrictions in subsection (f) of this section may be imposed for a
27 period of two years.
28 (g) A Prepaid Health Plan's PHP's use of a lock-in program developed pursuant to
29 subsection (e) of this section shall not constitute a violation of the terms of a contract between
30 the Prepaid Health Plan PHP and the Department that relate to a beneficiary's ability to utilize a
31 prescriber or pharmacy of choice."
32 SECTION 2.(b) G.S. 58-51-37(l) reads as rewritten:
33 "(l) An insurer's use of a lock-in program developed pursuant to G.S. 58-51-37.1 or
34 G.S. 108A-68.2 is not a violation of this section."
35 SECTION 2.(c) This section is effective on the later of the date this act becomes law
36 or the date that the NC Health Choice program is eliminated, as approved by the Centers for
37 Medicare and Medicaid Services (CMS) in accordance with Section 9D.15(a) of S.L. 2022-74.
38
39 ADD BEHAVIORAL HEALTH SERVICES COVERED BY STANDARD BENEFIT
40 PLANS
41 SECTION 3.(a) G.S. 108D-35(b) reads as rewritten:
42 "(b) The capitated contracts required by this section shall not cover any of the following:
43 (1) Medicaid services covered by the local management entities/managed care
44 organizations (LME/MCOs) under the combined 1915(b) and (c) waivers
45 waivers, 1915(b)(3) services, and any services approved under the 1915(i)
46 option shall not be covered under a standard benefit plan, except that all
47 capitated PHP contracts shall cover the following services:
48 a. Inpatient behavioral health services.
49 b. Outpatient behavioral health emergency room services.
50 c. Outpatient behavioral health services provided by direct-enrolled
51 providers.
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1 d. Mobile crisis management services.
2 e. Facility-based crisis services for children and adolescents.
3 f. Professional treatment services in a facility-based crisis program.
4 g. Outpatient opioid treatment services.
5 h. Ambulatory detoxification services.
6 i. Nonhospital medical detoxification services.
7 j. Partial hospitalization.
8 k. Medically supervised or alcohol and drug abuse treatment center
9 detoxification crisis stabilization.
10 l. Research-based intensive behavioral health treatment.
11 m. Diagnostic assessment services.
12 n. Early and Periodic Screening, Diagnosis, and Treatment services.
13 o. Peer support services.
14 p. Behavioral health urgent care services.
15 q. Substance abuse comprehensive outpatient treatment program
16 services.
17 r. Substance abuse intensive outpatient program services.
18 s. Social settings detoxification services.
19 In accordance with this subdivision, 1915(b)(3) services shall not be covered
20 under a standard benefit plan.
21 …."
22 SECTION 3.(b) This section is effective October 1, 2023.
23
24 CLARIFY ACTIONS TO BE TAKEN UPON TERMINATION OF LME/MCO
25 CONTRACTS
26 SECTION 4.(a) Part 2 of Article 4 of Chapter 122C of the General Statutes is
27 amended by adding the following new sections to read:
28 "§ 122C-115.5. Alignment of counties with an area authority.
29 (a) No county shall withdraw from an area authority nor shall an area authority be
30 dissolved without prior approval of the Secretary.
31 (b) A county that wishes to disengage from one area authority and realign with another
32 area authority operating a Medicaid waiver contract may do so with the approval of the Secretary.
33 The Secretary shall adopt rules to establish a process for county disengagement that shall ensure,
34 at a minimum, the following:
35 (1) Provision of services is not disrupted by the disengagement.
36 (2) The timing of the disengagement is accounted for and does not conflict with
37 setting capitation rates.
38 (3) Adequate notice is provided to the affected counties, the Department of Health
39 and Human Services, and the General Assembly.
40 (4) Provisions exist for the distribution of any real property no longer within the
41 catchment area of the area authority.
42 (c) Area authorities may add one or more additional counties to their existing catchment
43 area upon the adoption of a resolution to that effect by a majority of the members of the area
44 board and the approval of the Secretary.
45 (d) The Secretary shall direct the dissolution of an area authority upon the termination of
46 a BH IDD tailored plan contract with an area authority or upon the Secretary's delivery of a notice
47 of noncompliance to an area authority under G.S. 122C-124.2(c)(2) or G.S. 122C-124.2(d)(4).
48 (e) When an area authority is dissolved at the direction of the Secretary, the following
49 shall occur:
50 (1) The Secretary shall deliver a notice of dissolution to the board of county
51 commissioners of each of the counties in the dissolved area authority.
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1 (2) An area authority that is dissolved by the Secretary in accordance with the
2 provisions of this section shall be dissolved on a time line established by the
3 Department.
4 (3) The area authority being dissolved shall cooperate with the Secretary in order
5 to ensure the uninterrupted provision of services to Medicaid recipients and
6 the other individuals who received services through the area authority.
7 (4) The Secretary shall reassign the counties aligned with the area authority being
8 dissolved to one or more area authorities that are under contract for the
9 operation of a BH IDD tailored plan.
10 (5) The Secretary shall reassign the State-funded services contract between the
11 area authority being dissolved and the Division of Mental Health,
12 Developmental Disabilities, and Substance Abuse Services to the area
13 authorities receiving the realigned counties.
14 (6) The Secretary shall effectuate and oversee the orderly transfer of all
15 management responsibilities, operations, and contracts of the area authority
16 being dissolved, including the responsibility of paying providers for covered
17 services that are subsequently rendered.
18 (7) The Secretary shall arrange for the providers of services to be reimbursed from
19 the remaining fund balance or risk reserve of the area authority being
20 dissolved, or from other funds of the Department if necessary, for proper,
21 authorized, and valid claims for services rendered that were not previously
22 paid by the area authority being dissolved. In the event there are insufficient
23 assets to satisfy the liabilities of the area authority being dissolved, it shall be
24 the responsibility of the Secretary to satisfy the liabilities of the area authority
25 being dissolved.
26 (8) Effective until the date that BH IDD tailored plans begin operating, risk
27 reserve funds of the area authority being dissolved may be used only to pay
28 authorized and approved provider claims. Any funds remaining in the risk
29 reserve transferred under this subdivision shall become part of the risk reserve
30 of the area authorities receiving the realigned counties and shall be subject to
31 the same restrictions on the use of the risk reserve applicable to those area
32 authorities.
33 (9) The Secretary may assume control, in part or in full, of the financial affairs of
34 the area authority and appoint an administrator to exercise the powers assumed
35 by the Secretary. This assumption of control shall have the effect of divesting
36 the area authority of its authority as to the powers assumed, including service
37 delivery, adoption of budgets, expenditures of money, and all other financial
38 powers conferred on the area authority by law.
39 (10) County funding of the area authority shall continue and shall not be reduced
40 as a result of the dissolution. A county shall not withdraw funds previously
41 obligated or appropriated to the area authority.
42 (11) Any fund balance or risk reserve available to an area authority at the time of
43 its dissolution that is not utilized to pay liabilities shall be transferred to one
44 or more area authorities contracted to operate the 1915(b)/(c) Medicaid
45 Waiver or a BH IDD tailored plan in all or a portion of the catchment area of
46 the dissolved area authority, as directed by the Department in accordance with
47 G.S. 122C-115.6.
48 (12) Effective until the date that BH IDD tailored plans begin operating, if the fund
49 balance transferred from the dissolved area authority under subdivision (11)
50 of this subsection is insufficient to constitute fifteen percent (15%) of the
51 anticipated operational expenses arising from assumption of responsibilities
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1 from the dissolved area authority, the Secretary shall guarantee the operational
2 reserves for the area authority assuming the responsibilities under the
3 1915(b)/(c) Medicaid Waiver until the assuming area authority has
4 reestablished fifteen percent (15%) operational reserves.
5 "§ 122C-115.6. Transfer of area authority fund balance upon county realignment.
6 (a) When a county disengages from one area authority and realigns with another area
7 authority under G.S. 122C-115.5, regardless of whether the realignment was due to reassignment
8 by the Secretary or another process, a portion of the risk reserve and other funds of the area
9 authority from which the county is disengaging shall be transferred to the area authority with
10 which the county is realigning. The amount of risk reserve and other funds to be transferred shall
11 be determined by the Department in accordance with a formula or formulas developed in
12 accordance with this section.
13 (b) Any formula developed by the Department under this section shall consider the
14 stability of both the area authority from which the county is disengaging and the area authority
15 with which the county is realigning. The formula shall support (i) the ability for each area
16 authority to carry out its responsibilities under State law, (ii) the successful operation of the
17 1915(b)/(c) waivers, (iii) the capitated arrangements authorized by G.S. 108D-60(b), and (iv) the
18 successful operation of BH IDD tailored plans under G.S. 108D-60. The formula shall assure
19 that the area authority from which the county is disengaging retains sufficient funds to pay any
20 outstanding liabilities to healthcare providers, staff-related expenses, and