A BILL TO BE ENTITLED
AN ACT to make case management an administrative function to be implemented by local management entities and to appropriate funds.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 122C‑115.4 reads as rewritten:
"§ 122C‑115.4.  Functions of local management entities.
(a)	Local management entities are responsible for the management and oversight of the public system of mental health, developmental disabilities, and substance abuse services at the community level. An LME shall plan, develop, implement, and monitor services within a specified geographic area to ensure expected outcomes for consumers within available resources.
(b)	The primary functions of an LME are administrative, are designated in this subsection, and shall not be conducted by any other entity unless the LME voluntarily enters into a contract with that entity under subsection (c) of this section. The primary functions include all of the following:
(1)	Access for all citizens to the core services described in G.S. 122C‑2. In particular, this shall include the implementation of a 24‑hour a day, seven‑day a week screening, triage, and referral process and a uniform portal of entry into care.
(2)	Provider endorsement, monitoring, technical assistance, capacity development, and quality control. An LME may remove a provider's endorsement if a provider fails to meet defined quality criteria or fails to provide required data to the LME.
(3)	Utilization management, utilization review, and determination of the appropriate level and intensity of services including the review and approval of the person centered plans for consumers who receive State‑funded services. Concurrent review of person centered plans for all consumers in the LME's catchment area who receive Medicaid funded services.
(4)	Authorization of the utilization of State psychiatric hospitals and other State facilities. Authorization of eligibility determination requests for recipients under a CAP‑MR/DD waiver.
(5)	Care coordination and quality management. This function includes the direct monitoring of the effectiveness of person centered plans. It also includes the initiation of and participation in the development of required modifications to the plans for high risk and high cost consumers in order to achieve better client outcomes or equivalent outcomes in a more cost‑effective manner. Monitoring effectiveness includes reviewing client outcomes data supplied by the provider, direct contact with consumers, and review of consumer charts.
(6)	Community collaboration and consumer affairs including a process to protect consumer rights, an appeals process, and support of an effective consumer and family advisory committee.
(7)	Financial management and accountability for the use of State and local funds and information management for the delivery of publicly funded services.
(8)	Case management. This function requires the LME to conduct an independent assessment of a consumer's service needs, to provide the consumer with referrals to providers who offer the appropriate services based upon the assessment, and to monitor the services provided as required under subdivision (5) of this subsection. The LME shall provide the consumer's assessment to any provider chosen by the consumer so the provider can develop a person-centered plan for the consumer.
(c)	Subject to subsection (b) of this section and to all applicable State and federal laws and rules established by the Secretary, an LME may contract with a public or private entity for the implementation of LME functions designated under subsection (b) of this section. Nothing in this subsection shall be construed to supersede the authority of an LME to be the sole entity with the authority to implement the functions designated in subsection (b) of this section.
(d)	Except as provided in G.S. 122C‑142.1 and G.S. 122C‑125, the Secretary may not remove from an LME or designate another entity as also eligible to implement any function enumerated under subsection (b) of this section unless all of the following applies:
(1)	The LME fails during the previous three months to achieve a satisfactory outcome on any of the critical performance measures developed by the Secretary under G.S. 122C‑112.1(33).
(2)	The Secretary provides focused technical assistance to the LME in the implementation of the function. The assistance shall continue for at least six months or until the LME achieves a satisfactory outcome on the performance measure, whichever occurs first.
(3)	If, after six months of receiving technical assistance from the Secretary, the LME still fails to achieve or maintain a satisfactory outcome on the critical performance measure, the Secretary shall enter into a contract with another LME or agency to implement the function on behalf of the LME from which the function has been removed.
(e)	Notwithstanding subsection (d) of this section, in the case of serious financial mismanagement or serious regulatory noncompliance, the Secretary may temporarily remove an LME function after consultation with the Joint Legislative Oversight Committee on Mental Health, Developmental Disabilities, and Substance Abuse Services.
(f)	The Commission shall adopt rules regarding the following matters:
(1)	The definition of a high risk consumer. Until such time as the Commission adopts a rule under this subdivision, a high risk consumer means a person who has been assessed as needing emergent crisis services three or more times in the previous 12 months.
(2)	The definition of a high cost consumer. Until such time as the Commission adopts a rule under this subdivision, a high cost consumer means a person whose treatment plan is expected to incur costs in the top twenty percent (20%) of expenditures for all consumers in a disability group.
(3)	The notice and procedural requirements for removing one or more LME functions under subsection (d) of this section."
SECTION 2.  There is appropriated from the General Fund to the Department of Health and Human Services to be allocated to the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services the sum of five million dollars ($5,000,000) for the 2007‑2008 fiscal year and the sum of five million dollars ($5,000,000) for the 2008‑2009 fiscal year.  The funds shall be used to supplement State funds appropriated for LME administrative costs and to pay for LMEs to conduct case management as provided in G.S. 122C‑115.4 of Section 1 of this act.  The Division shall recalculate the LME administrative cost model and develop quality measures for the case management function. The Division shall report its findings to the General Assembly and to the Joint Legislative Oversight Committee on Mental Health, Developmental Disabilities, and Substance Abuse Services by October 1, 2007.
SECTION 3.  This act becomes effective July 1, 2007, and applies to assessments conducted on or after that date.