A BILL TO BE ENTITLED
AN ACT to clarify the authority of the commission foR mental health, developmental disabilities, and substance abuse services rule‑making authority.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 122C‑112.1(a) reads as rewritten:
"§ 122C‑112.1.  Powers and duties of the Secretary.
(a)	The Secretary shall do all of the following:
(1)	Oversee development and implementation of the State Plan for Mental Health, Developmental Disabilities, and Substance Abuse Services.
(2)	Enforce the provisions of this Chapter and the rules of the Commission and the Secretary.
(3)	Make recommendations to the Commission regarding rules governing a process and criteria for the submission, review, and approval or disapproval of LME business plans submitted by area authorities and county programs for the management of mental health, developmental disabilities, and substance abuse services.
(4)	Make recommendations to the Commission regarding rules specifying the content and format of LME business plans.
(5)	Review LME business plans and, upon approval of the plan, certify the submitting area authority or county program to manage the delivery of mental health, developmental disabilities, and substance abuse services in the applicable catchment area.
(6)	Make recommendations to the Commission regarding rules to establish comprehensive, cohesive oversight and monitoring procedures and processes to ensure continuous compliance by area authorities, county programs, and all providers of public services with State and federal policy, law, and standards. The procedures shall include the development and use of critical performance measures and report cards for each area authority and county program.
(7)	Conduct regularly scheduled monitoring and oversight of area authority, county programs, and all providers of public services. Monitoring and oversight shall be used to assess compliance with the LME business plan and implementation of core LME functions. Monitoring shall also include the examination of LME and provider performance on outcome measures including adherence to best practices, the assessment of consumer satisfaction, and the review of client rights complaints.
(8)	Make findings and recommendations based on information and data collected pursuant to subdivision (7) of this subsection and submit these findings and recommendations to the applicable area authority board, county program director, board of county commissioners, providers of public services, and to the Local Consumer Advocacy Office.
(9)	Provide ongoing and focused technical assistance to area authorities and county programs in the implementation of the LME functions and the establishment and operation of community‑based programs. The technical assistance required under this subdivision includes, but is not limited to, the technical assistance required under G.S. 122C‑115.4(d)(2). The Secretary shall include in the State Plan a mechanism for monitoring the Department's success in implementing this duty and the progress of area authorities and county programs in achieving these functions.
(10)	Except as provided in G.S. 122C‑114(b)(3), operate State facilities and adopt rules pertaining to their operation. The Secretary shall make recommendations to the Commission regarding patient admission and discharge procedures.
(11)	Develop a unified system of services provided at the community level, by State facilities, and by providers enrolled or under a contract with the State and an area authority or county program.
(12)	Except as provided in G.S. 122C‑114(b)(4) and (b)(5), adopt rules governing the expenditure of all funds for mental health, developmental disabilities, and substance abuse programs and services. The Secretary shall make recommendations to the Commission regarding the criteria and process for the expenditure of funds from the Trust Fund for Mental Health, Developmental Disabilities, and Substance Abuse Services and Bridge Funding Needs and the criteria and process for an LME to reallocate funds among broad age and disability categories.
(13)	Adopt rules to implement the appeal procedure authorized by G.S. 122C‑151.2.
(14)	Make recommendations to the Commission regarding rules for the implementation of the uniform portal process.
(15)	Except as provided in G.S. 122C‑26(4), adopt rules establishing procedures for waiver of rules adopted by the Secretary under this Chapter.
(16)	Notify the clerks of superior court of changes in the designation of State facility regions and of facilities designated under G.S. 122C‑252.
(17)	Promote public awareness and understanding of mental health, mental illness, developmental disabilities, and substance abuse.
(18)	Administer and enforce rules that are conditions of participation for federal or State financial aid.
(19)	Carry out G.S. 122C‑361.
(20)	Monitor the fiscal and administrative practices of area authorities and county programs to ensure that the programs are accountable to the State for the management and use of federal and State funds allocated for mental health, developmental disabilities, and substance abuse services. The Secretary shall ensure maximum accountability by area authorities and county programs for rate‑setting methodologies, reimbursement procedures, billing procedures, provider contracting procedures, record keeping, documentation, and other matters pertaining to financial management and fiscal accountability. The Secretary shall further ensure that the practices are consistent with professionally accepted accounting and management principles.
(21)	Provide technical assistance, including conflict resolution, to counties in the development and implementation of area authority and county program business plans and other matters, as requested by the county.
(22)	Develop a methodology to be used for calculating county resources to reflect cash and in‑kind contributions of the county.
(23)	Make recommendations to the Commission regarding rules establishing program evaluation and management of mental health, developmental disabilities, and substance abuse services.
(24)	Adopt rules regarding the requirements of the federal government for grants‑in‑aid for mental health, developmental disabilities, or substance abuse programs which may be made available to area authorities or county programs or the State. This section shall be liberally construed in order that the State and its citizens may benefit from the grants‑in‑aid.
(25)	Make recommendations to the Commission regarding rules for determining minimally adequate services for purposes of G.S. 122C‑124.1 and G.S. 122C‑125.
(26)	Make recommendations to the Commission regarding rules to establish  a process for approving area authorities and county programs to provide services directly in accordance with G.S. 122C‑141.
(27)	Sponsor training opportunities in the fields of mental health, developmental disabilities, and substance abuse.
(28)	Enforce the protection of the rights of clients served by State facilities, area authorities, county programs, and providers of public services.
(29)	Make recommendations to the Commission regarding rules for the enforcement of the protection of the rights of clients being served by State facilities, area authorities, county programs, and providers of public services.
(30)	Prior to requesting approval to close a State facility under G.S. 122C‑181(b):
a.	Notify the Joint Legislative Commission on Governmental Operations, the Joint Legislative Committee on Mental Health, Developmental Disabilities, and Substance Abuse Services, and members of the General Assembly who represent catchment areas affected by the closure; and
b.	Present a plan for the closure to the members of the Joint Legislative Committee on Mental Health, Developmental Disabilities, and Substance Abuse Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Senate Appropriations Committee on Health and Human Services for their review, advice, and recommendations. The plan shall address specifically how patients will be cared for after closure, how support services to community‑based agencies and outreach services will be continued, and the impact on remaining State facilities. In implementing the plan, the Secretary shall take into consideration the comments and recommendations of the committees to which the plan is presented under this subdivision.
(31)	Ensure that the State Plan for Mental Health, Developmental Disabilities, and Substance Abuse Services is coordinated with the Medicaid State Plan and NC Health Choice.
(32)	Implement standard forms, quality measures, contracts, processes, and procedures to be used by all area authorities and county programs with other public and private service providers. The Secretary shall consult with LMEs, CFACs, counties, and qualified providers regarding the development of any forms, processes, and procedures required under this subdivision. Any document, process, or procedure developed under this subdivision shall place an obligation upon providers to transmit to LMEs timely client information and outcome data. The Secretary shall also adopt rules regarding what constitutes a clean claim for purposes of billing.
When implementing this subdivision, the Secretary shall balance the need for LMEs to exercise discretion in the discharge of their LME functions with the need of qualified providers for a uniform system of doing business with public entities.
(33)	Develop and implement critical performance indicators to be used to hold LMEs accountable for managing the mental health, developmental disabilities, and substance abuse services system. The performance system indicators shall be implemented no later than July 1, 2007."
SECTION 2.  G.S. 122C‑125 reads as rewritten:
"§ 122C‑125.  Area Authority financial failure; State assumption of financial control.
At any time that the Secretary of the Department of Health and Human Services determines that an area authority is in imminent danger of failing financially and of failing to provide direct services to clients, the Secretary, after providing written notification of the Secretary's intent to the area board and after providing the area authority an opportunity to be heard, may assume control of the financial affairs of the area authority and appoint an administrator to exercise the powers assumed. This assumption of control shall have the effect of divesting the area authority of its powers as to the adoption of budgets, expenditures of money, and all other financial powers conferred in the area authority by law. County funding of the area authority shall continue when the State has assumed control of the financial affairs of the area authority. At no time after the State has assumed this control shall a county withdraw funds previously obligated or appropriated to the area authority. The Secretary shall make recommendations to the Commission, and the Commission shall adopt rules to define imminent danger of failing financially and of failing to provide direct services to clients.
Upon assumption of financial control, the Department shall, in conjunction with the area authority, develop and implement a corrective plan of action and provide notification to the area authority's board of directors of the plan. The Department shall also keep the county board of commissioners and the area authority's board of directors informed of any ongoing concerns or problems with the area authority's finances."
SECTION 3.  G.S. 122C‑141(a) reads as rewritten:
"(a)	The area authority or county program shall contract with other qualified public or private providers, agencies, institutions, or resources for the provision of services, and, subject to the approval of the Secretary, is authorized to provide services directly. The area authority or county program shall indicate in its local business plan how services will be provided and how the provision of services will address issues of access, availability of qualified public or private providers, consumer choice, and fair competition. The Secretary shall take into account these issues when reviewing the local business plan and considering approval of the direct provision of services. The Secretary shall develop criteria for the approval of direct service provision by area authorities and county programs in accordance with this section and as evidenced by compliance with the local business plan. For the purposes of this section, a qualified public or private provider is a provider that meets the provider qualifications as defined by rules adopted by the Commission."
SECTION 4.  G.S. 122C‑141(d) reads as rewritten:
"(d)	If two or more counties enter into an interlocal agreement under Article 20 of Chapter 160A of the General Statutes to be a public provider of mental health, developmental disabilities, or substance abuse services ("public provider"), before an LME may enter into a contract with the public provider, all of the following must apply:
(1)	The public provider must meet all the provider qualifications as defined by rules adopted by the Commission. A county that satisfies its duties under G.S. 122C‑115(a) through a consolidated human services agency may not be considered a qualified provider for purposes of this subdivision.
(2)	The LME must adopt a conflict of interest policy that applies to all provider contracts.
(3)	The interlocal agreement must provide that any liabilities of the public provider shall be paid from its unobligated surplus funds and that if those funds are not sufficient to satisfy the indebtedness, the remaining indebtedness shall be apportioned to the participating counties."
SECTION 5.  G.S. 122C‑114 reads as rewritten:
"§ 122C‑114.  Powers and duties of the Commission.
(a)	The Commission shall have authority as provided by this Chapter, Chapters 90 and 148 of the General Statutes, and by G.S. 143B‑147.
(b)	The Commission shall adopt rules regarding all of the following:
(1)	The process and criteria for the submission, review, and approval or disapproval by the Secretary of LME business plans submitted by area authorities and county programs for the management of mental health, developmental disabilities, and substance abuse services.
(2)	The content and format of LME business plans.
(3)	The admission and discharge of patients to State facilities.
(4)	Subject to the requirements of G.S. 143C‑9‑2, standardized criteria and processes for the expenditure of all funds from the Trust Fund for Mental Health, Developmental Disabilities, and Substance Abuse Services and Bridge Funding Needs.
(5)	Standardized criteria and procedures to allow an LME to reallocate funds between broad age and disability categories.
(6)	The implementation of the uniform portal process.
(7)	LME monitoring and endorsement of providers of mental health, developmental disabilities, and substance abuse services.
(8)	LME provision of technical assistance to providers of mental health, developmental disabilities, and substance abuse services.
(9)	Define 'imminent danger of failing financially' and 'failing to provide direct services to clients' as those terms are used in G.S. 122C‑125.
(10)	Determine the requirements of a qualified public or private provider as that term is used in G.S. 122C‑141.
(11)	All other matters governed by this Chapter that are not specifically reserved for the Secretary.
(c)	Rules previously adopted by the Secretary shall be effective unless amended or repealed by the Commission."
SECTION 6.  This act becomes effective October 1, 2007.