A BILL TO BE ENTITLED
AN ACT TO TRANSFER THE TEACHERS' AND STATE EMPLOYEES' COMPREHENSIVE MAJOR MEDICAL PLAN TO THE DEPARTMENT OF STATE TREASURER.
The General Assembly of North Carolina enacts:
SECTION 1.(a)  Article 4 of Chapter 143A of the General Statutes is amended by adding the following new section to read:
"§ 143A-38.2. Teachers' and State Employees' Comprehensive Major Medical Plan; transfer.
The Teachers' and State Employees' Comprehensive Major Medical Plan and the Board of Trustees, the Public Employee Health Benefit Fund and the Health Benefit Reserve Fund, and the Health Insurance Program for Children, as contained in Article 3 of Chapter 135 of the General Statutes and the laws of this State, are hereby transferred by a Type II transfer to the Department of State Treasurer."
SECTION 1.(b)  In accordance with G.S. 135‑39.4A, as amended by this act, the State Treasurer shall, within 60 days after this section becomes effective, vacate the position of Executive Administrator of the Teachers' and State Employees' Comprehensive Major Medical Plan and shall appoint to the position of Executive Administrator a person other than the person serving as Executive Administrator on July 1, 2002.
SECTION 2.(a)  G.S. 135‑38, 135‑39.2(a), 135‑39.3, 135‑39.9, 135‑39.10, and 35‑40.12(b) are repealed.
SECTION 2.(b)  G.S. 135‑37 reads as rewritten:
"§ 135‑37.  Confidentiality.
Any information as herein described in this section which is in the possession of the Executive Administrator and the Board of Trustees of the Teachers' and State Employees' Comprehensive Major Medical Plan or its Claims Processor under the Teachers' and State Employees' Comprehensive Major Medical Plan shall be confidential and shall be exempt from the provisions of Chapter 132 of the General Statutes or any other provision requiring information and records held by State agencies to be made public or accessible to the public. This section shall apply to all information concerning individuals, including the fact of coverage or noncoverage, whether or not a claim has been filed, medical information, whether or not a claim has been paid, and any other information or materials concerning a plan participant. Provided, however, such information may be released to the State Auditor, or to the Attorney General, or to such persons or organizations as may be designated and approved by the Executive Administrator and Board of Trustees of the Teachers' and State Employees' Comprehensive Major Medical Plan, but any information so released shall remain confidential as stated above and any party obtaining such information shall assume the same level of responsibility for maintaining such confidentiality as that of the Executive Administrator and Board of Trustees of the Teachers' and State Employees' Comprehensive Major Medical Plan."
SECTION 2.(c)  G.S. 135‑39 reads as rewritten:
"§ 135‑39.  Board of Trustees established.
(a)	There is hereby established the Board of Trustees of the Teachers' and State Employees' Comprehensive Major Medical Plan. The Board of Trustees shall be part of the Department of State Treasurer as provided in G.S. 143A-38.2.
(a1)	The Board of Trustees of the Teachers' and State Employees' Comprehensive Major Medical Plan shall consist of nine members.
(a2)	The State Treasurer shall be a member of the Board of Trustees established by this section and shall be the Chairman of the Board of Trustees.
(b)	Three members shall be appointed by the Governor. Of the initial members, one shall serve a term to expire June 30, 1983, and two shall serve terms to expire June 30, 1984. Subsequent terms shall be for two years. Vacancies shall be filled by the Governor. Of the members appointed by the Governor, one shall be either:
(1)	An employee of a State department, agency, or institution;
(2)	A teacher employed by a North Carolina public school system;
(3)	A retired employee of a State department, agency, or institution; or
(4)	A retired teacher from a North Carolina public school system.
(c)	Three members shall be appointed by the General Assembly upon the recommendation of the Speaker of the House of Representatives in accordance with G.S. 120‑121. Of the initial members, two shall serve terms expiring June 30, 1983, and one shall serve a term expiring June 30, 1984. Vacancies shall be filled in accordance with G.S. 120‑122.
(d)	Three members shall be appointed by the General Assembly upon the recommendation of the President Pro Tempore of the Senate in accordance with G.S. 120‑121. Of the initial members, two shall serve terms expiring June 30, 1983, and one shall serve a term expiring June 30, 1984. Vacancies shall be filled in accordance with G.S. 120‑122.
(d1)	Repealed by Session Laws 1985, c. 732, s. 60.
(e)	The Governor shall have the power to remove any member appointed by him under subsection (b). The General Assembly may remove any member appointed under subsection (c) or (d).
(f)	The members of the Board of Trustees shall receive one hundred dollars ($100.00) per day, except employees eligible to enroll in the Plan, whenever the full Board of Trustees holds a public session, and travel allowances under G.S. 138‑6 when traveling to and from meetings of the Board of Trustees or hearings under G.S. 135‑39.7, but shall not receive any subsistence allowance or per diem under G.S. 138‑5, except when holding a meeting or hearing where this section does not provide for payment of one hundred dollars ($100.00) per day.
(g)	Repealed by Session Laws 2002‑126, s. 28.16(a), effective October 1, 2002, and applicable to appointments and reappointments made on and after that date.
(h)	Except for the State Treasurer, no member of the Board of Trustees may serve more than three consecutive two‑year terms.
(i)	Meetings of the Board of Trustees may be called by the Executive Administrator, the Chairman, or by any three members."
SECTION 2.(d)  G.S. 135‑39.4A reads as rewritten:
"§ 135‑39.4A.  Executive Administrator.
(a)	The Plan shall have an Executive Administrator.
(b)	The Executive Administrator shall be appointed by the State Treasurer. The term of employment and salary of the Executive Administrator shall be set by the State Treasurer.
The Executive Administrator may be removed from office by the State Treasurer.(c)	to (e) Repealed by Session Laws 1987, c. 857, s. 5.
(f)	The Executive Administrator may employ such clerical and professional staff, and such other assistance as may be necessary to assist the Executive Administrator and the Board of Trustees in carrying out their duties and responsibilities under this Article. The Executive Administrator may also negotiate, renegotiate and execute contracts with third parties in the performance of his duties and responsibilities under this Article.
(g)	The Executive Administrator shall be responsible for:
(1)	Cost management programs;
(2)	Education and illness prevention programs;
(3)	Training programs for Health Benefit Representatives;
(4)	Membership functions;
(5)	Long‑range planning;
(6)	Provider and participant relations; and
(7)	Communications.
Managed care practices used by the Executive Administrator in cost management programs are subject to the requirements of G.S. 58‑3‑191, 58‑3‑221, 58‑3‑223, 58‑3‑235, 58‑3‑240, 58‑3‑245, 58‑3‑250, 58‑3‑265, 58‑67‑88, and 58‑50‑30.
(h)	The Executive Administrator shall make reports and recommendations on the Plan to the President of the Senate, the Speaker of the House of Representatives and the Joint Legislative Health Care Oversight Committee."
SECTION 2.(e)  G.S. 135‑39.5 reads as rewritten:
"§ 135‑39.5.  Powers and duties of the Executive Administrator and Board of Trustees.
The Executive Administrator and Board of Trustees of the Teachers' and State Employees' Comprehensive Major Medical Plan shall have the following powers and duties:
(1)	Supervising and monitoring of the Claims Processor.
(2)	Providing for enrollment of employees in the Plan.
(3)	Communicating with employees enrolled under the Plan.
(4)	Communicating with health care providers providing services under the Plan.
(5)	Making payments at appropriate intervals to the Claims Processor for benefit costs and administrative costs.
(6)	Conducting administrative reviews under G.S. 135‑39.7.
(7)	Annually assessing the performance of the Claims Processor.
(8)	Preparing and submitting to the State Treasurer, the Governor and the General Assembly cost estimates for the health benefits plan, including those required by Article 15 of Chapter 120 of the General Statutes.
(9)	Recommending to the State Treasurer, the Governor and the General Assembly changes or additions to the health benefits program and health care cost containment programs, together with statements of financial and actuarial effects as required by Article 15 of Chapter 120 of the General Statutes.
(10)	Working with State employee groups to improve health benefit programs.
(11)	Repealed by Session Laws 1985, c. 732, s. 9.
(12)	Determining basis of payments to health care providers, including payments in accordance with G.S. 58‑50‑56. The Plan shall comply with G.S. 58‑3‑225.
(13)	Requiring bonding of the Claims Processor in the handling of State funds.
(14)	Repealed by Session Laws 1985, c. 732, s. 7.
(15)	In case of termination of the contract under G.S. 135‑39.5A, to select a new Claims Processor, after competitive bidding procedures approved by the Department of Administration.
(16)	Notwithstanding the provisions of Part 3 of this Article, to formulate and implement cost‑containment measures which are not in direct conflict with that Part.
(17)	Implementing pilot programs necessary to evaluate proposed cost containment measures which are not in direct conflict with Part 3 of this Article, and expending funds necessary for the implementation of such programs.
(18)	Authorizing coverage for alternative forms of care not otherwise provided by the Plan in individual cases when medically necessary, medically equivalent to services covered by the Plan, and when such alternatives would be less costly than would have been otherwise.
(19)	Establishing and operating a hospital and other provider bill audit program and a fraud detection program.
(20)	Determining administrative and medical policies that are not in direct conflict with Part 3 of this Article upon the advice of the Claims Processor and upon the advice of the Plan's consulting actuary when Plan costs are involved.
(21)	Supervising the payment of claims and all other disbursements under this Article, including the recovery of any disbursements that are not made in accordance with the provisions of this Article.
(22)	Implementing and administering a program of long‑term care benefits pursuant to Part 4 of this Article.
(23)	Implementing and administering a program of child health insurance benefits pursuant to Part 5 of this Article.
(24)	Implementing and administering a case management and disease management program.
(25)	Implementing and administering a pharmacy benefit management program through a third‑party contract awarded after receiving competitive quotes.
(26)	Increasing annually the amount of the annual deductible and annual aggregate maximum deductible. The increase shall be established by determining the ratio of the CPI‑Medical Index to such index one year earlier. If the ratio indicates an increase in the CPI‑Medical Index, then the amount of the annual deductible and annual aggregate maximum deductible may be increased by not more than the percentage increase in the CPI‑Medical Index. As used in this subdivision, the term "CPI‑Medical Index" means the U.S. Consumer Price Index for All Urban Consumers for Total Medical Care.
(27)	The Executive Administrator may establish pilot programs to measure potential cost savings and improvements in patient care available through local, provider‑driven medical management."
SECTION 2.(f)  G.S. 135‑40.10(d) reads as rewritten:
"(d)	Notwithstanding the foregoing provisions of this section or any other provisions of the Plan, the Executive Administrator and Board of Trustees may enter into negotiations with the Health Care Financing Administration, U.S. Department of Health and Human Services, in order to secure a more favorable coordination of the Plan's benefits with those provided by Medicare, including but not limited to, measures by which the Plan would provide Medicare benefits for all of its Medicare‑eligible members in return for adequate payments from the federal government in providing such benefits. Should such negotiations result in an agreement favorable to the Plan and its Medicare‑eligible members, the Executive Administrator and Board of Trustees may implement such an agreement which shall supersede all other provisions of the Plan to the contrary related to its payment of claims for Medicare‑eligible members."
SECTION 2.(g)  G.S. 135‑39.8 reads as rewritten:
"§ 135‑39.8.  Rules and regulations.
The Executive Administrator and Board of Trustees may issue rules and regulations to implement Parts 2, 3, 4, and 5 of this Article. The Executive Administrator and Board of Trustees shall provide to all employing units, all health benefit representatives, the oversight team provided for in G.S. 135‑39.3, all relevant health care providers affected by a rule or regulation, and to any other persons requesting a written description and approved by the Executive Administrator and Board of Trustees written notice and an opportunity to comment not later than 30 days prior to adopting, amending, or rescinding a rule or regulation, unless immediate adoption of the rule or regulation without notice is necessary in order to fully effectuate the purpose of the rule or regulation. Rules and regulations of the Board of Trustees shall remain in effect until amended or repealed by the Executive Administrator and Board of Trustees. The Executive Administrator and Board of Trustees shall provide a written description of the rules and regulations issued under this section to all employing units, all health benefit representatives, all relevant health care providers affected by a rule or regulation, and to any other persons requesting a written description and approved by the Executive Administrator and Board of Trustees on a timely basis."
SECTION 2.(h)  G.S. 135‑39.7(a) reads as rewritten:
"(a)	If, after exhaustion of internal appeal handling as outlined in the contract with the Claims Processor any person is aggrieved, the Claims Processor shall bring the matter to the attention of the Executive Administrator and Board of Trustees, which shall promptly decide whether the subject matter of the appeal is a determination subject to external review under Part 4 of Article 50 of Chapter 58 of the General Statutes. The Executive Administrator and Board of Trustees shall inform the aggrieved person and the aggrieved person's provider of the decision and shall provide the aggrieved person notice of the aggrieved person's right to appeal that decision as provided in this subsection. If the Executive Administrator and Board of Trustees decide that the subject matter of the appeal is not a determination subject to external review, then the Executive Administrator and Board of Trustees may make a binding decision on the matter in accordance with procedures established by the Executive Administrator and Board of Trustees. The Executive Administrator and Board of Trustees shall provide a written summary of the decisions made pursuant to this section to all employing units, all health benefit representatives, all relevant health care providers affected by a decision, and to any other parties requesting a written summary and approved by the Executive Administrator and Board of Trustees to receive a summary immediately following the issuance of a decision. A decision by the Executive Administrator and Board of Trustees that a matter raised on internal appeal is a determination subject to external review as provided in subsection (b) of this section may be contested by the aggrieved person under Chapter 150B of the General Statutes. The person contesting the decision may proceed with external review pending a decision in the contested case under Chapter 150B of the General Statutes."
SECTION 3.  Sections 1 and 2 of this act become effective December 1, 2003.  The remainder of this act is effective when it becomes law.