A BILL TO BE ENTITLED
AN ACT TO AUTHORIZE THE SECRETARY OF HEALTH AND HUMAN SERVICES TO GRANT DEEMED STATUS TO CERTAIN NONGOVERNMENTAL AGENCIES OR SERVICE PROVIDERS OF Mental Health, Developmental Disabilities, and Substance Abuse Services UNDER CERTAIN CONDITIONS; TO AMEND CERTAIN  LICENSE RENEWALS AND AUDIT PROCESSES IN ORDER TO EXPEDITE THE PROVISION OF SERVICES; AND TO PROVIDE FOR A LEAD AGENCY TO COORDINATE COMPLAINT INVESTIGATIONS WHEN laws or rules under the enforcement responsibility of MULTIPLE DHHS AGENCIES ARE INVOLVED IN THE INVESTIGATION.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 122C‑22 is amended by adding the following new subsections to read:
"§ 122C‑22.  Exclusions from licensure; deemed status.
(a)	The following are excluded from the provisions of this Article and are not required to obtain licensure under this Article:
…
(c)	The Commission shall adopt rules establishing a procedure whereby a nongovernmental agency or service provider that is under contract with or endorsed by an LME to provide mental health, developmental disabilities, or substance abuse services and that is certified by one or more of the following nationally recognized entities, may be deemed by the Secretary as meeting the requirements for licensure under this Article and for providing services endorsed by the LME:
(1)	The Joint Commission on the Accreditation of Healthcare Organizations (JCAHO).
(2)	The Commission on Accreditation of Rehabilitation Facilities (CARF).
(3)	The Council on Quality and Leadership in Supports for People with Disabilities (CQL).
(4)	The Council on Accreditation of Services for Families and Children (COA).
Upon receipt of proof of accreditation for the services to be provided, the Secretary shall deem the agency or service provider as having met the requirements of this Article to provide services that have been endorsed by an LME. The Secretary shall renew the deemed status at the license renewal date if the agency or service provider submits proof of certification in good standing and endorsement by the LME at the time of renewal. An agency or service provider that is deemed licensed to provide services under this subsection continues to be subject to investigation by the Secretary and to applicable license renewal fees.
(d)	The Secretary shall withdraw the deemed status granted under subsection (c) of this section to an agency or service provider if:
(1)	The accreditation, licensure, or certification is revoked for failure to meet the requirements of subsection (c) of this section, or other applicable requirements under this Article, or
(2)	If the Department imposes a penalty for a Type A violation against the agency or service provider.An agency or service provider that has lost deemed status under this subsection may apply for renewal of deemed status after a period of six months from the date of withdrawal of deemed status. Renewal of deemed status shall be granted upon completion of a correction plan that has been approved by the Department and implemented by the agency or service provider, and the agency or service provider otherwise meets the requirements of subsection (c) of this section."
SECTION 2.  G.S. 131D‑10.3 is amended by adding the following new subsection to read:
"(g)	In accordance with Commission rules, a person may submit to the Department documentation of compliance with the standards of a nationally recognized accrediting body, and the Department on the basis of such accreditation may deem the person in compliance with one or more Commission licensing rules.
(g1)	In accordance with Commission rules, a nongovernmental agency or service provider that provides services to children in therapeutic foster homes and that submits proof of certification or accreditation by one or more of the following nationally recognized entities, shall be deemed to meet the licensure requirements of this Article to provide these services:
(1)	The Joint Commission on the Accreditation of Healthcare Organizations (JCAHO).
(2)	The Commission on Accreditation of Rehabilitation Facilities (CARF).
(3)	The Council on Quality and Leadership in Supports for People with Disabilities (CQL).
(4)	The Council on Accreditation of Services for Families and Children (COA).
The Commission shall adopt rules providing for coordination of license or deemed status renewal dates with accreditation renewal dates to avoid duplication in the application renewal process. An agency or service provider that is deemed licensed to provide services under this subsection continues to be subject to investigation by the Secretary and to applicable license renewal fees.
(g2)	The Secretary shall withdraw the deemed status granted under subsection (g1) of this section to an agency or service provider if:
(1)	The accreditation, licensure, or certification is revoked for failure to meet the requirements of subsection (g1) of this section, or other applicable requirements under this Article, or
(2)	If the Department imposes a penalty for a violation against the agency or service provider.
An agency or service provider that has lost deemed status under this subsection may apply for renewal of deemed status after a period of six months from the date of withdrawal of deemed status. Renewal of deemed status shall be granted upon completion of a correction plan that has been approved by the Department and implemented by the agency or service provider, and the agency or service provider otherwise meets the requirements of subsection (g1) of this section."
SECTION 3.  Part 6 of Article 2 of Chapter 108A of the General Statutes is amended by adding the following new section to read:
"§ 108A‑55.5.  Accredited providers; annual audit process.
The Department shall adopt a procedure whereby in its annual audit process those agencies or service providers that have been granted deemed status under G.S. 122C‑22(c) or G.S. 131D‑10.3(g1) and that have a ten percent (10%) or less error rate in their annual audit, shall be moved to a two‑year audit cycle. The Department may request information from the agency or service provider at any time for random file audits."
SECTION 4.  Part 1 of Article 3 of Chapter 143B of the General Statutes is amended by adding the following new section to read:
"§ 143B‑139.6C.  Secretary to establish lead agency for the investigation of complaints involving multiple agencies.
For the purpose of avoiding duplication of effort and paperwork by service providers and the Department, to ensure a clear understanding and interpretation of compliance with applicable laws and rules, and to expedite the provision of services to clients, the Secretary of Health and Human Services shall establish a procedure for coordinating the investigation of complaints against licensed, certified, accredited, or endorsed providers of services to recipients of social services or mental health, developmental disabilities, and substance abuse services. When a complaint is received by the Department and the complaint requires investigation by more than one Division of the Department, the Secretary shall appoint a lead agency among those involved in the complaint investigation. The lead agency shall oversee and coordinate the investigation by all involved Divisions, and shall be the primary contact entity for the provider that is the subject of the investigation. The lead agency shall coordinate with the involved Divisions to review laws and rules that impact the investigation and to provide a consistent and nonconflicting report to the provider on what rules or laws have been violated and the corrections needed to comply with those laws and rules. The procedure shall provide for notice to service providers when a complaint is received. The notice shall include the particular Divisions charged with investigating the complaint and the lead agency designated by the Secretary to oversee the complaint investigation. If a conflict arises among Divisions concerning the interpretation of the law or rules, the conflict shall be resolved by the Secretary or, if necessary, by an amendment to rules or statutory clarification by the General Assembly. The provider shall not be deemed in violation of any rule the interpretation of which is in conflict, until the conflict has been resolved and the provider informed of the decision."
SECTION 5.  This act becomes effective October 1, 2007.