A BILL TO BE ENTITLED
AN ACT TO DIRECT THE Department of Health and Human Services, Division of Medical Assistance, TO take certain actions to address overbudgeted expenditures for the community supports program.
The General Assembly of North Carolina enacts:
SECTION 1.  Not later than June 30, 2008, the Department of Health and Human Services, Division of Medical Assistance, shall submit to the Centers for Medicare and Medicaid Services, revised service definitions for two Medicaid billable services (i) community support – adults and (ii) community support – children/adolescents.  The revised definitions shall focus on rehabilitative services and be developed to ensure that community support services are provided as efficiently and effectively as possible to minimize overexpenditures in community support services in the 2008‑2009 fiscal year and thereafter.
SECTION 2.(a)  In order to ensure accountability for services provided and funds expended for community services, the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, shall develop a tiered rate structure to replace the blended rate currently used for community support services.  Under the new tiered structure, services that are necessary but do not require the skill, education, or knowledge of a qualified professional should be paid at a lower rate than for services provided by qualified skilled professionals.  The Department shall report on the development of the structure to the Joint Legislative Oversight Committee (LOC) on Mental Health, Developmental Disabilities, and Substance Abuse Services not later than October 1, 2008.  The Department shall not implement the tiered rate structure until after it has consulted with the LOC.
SECTION 2.(b).  The Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, shall develop a service authorization process that separates the assessment function from the service delivery function at the LME level. In developing the process, the Department shall consider as an option separate LME assessment centers, the duties of which would include care coordination. In no event shall services be delivered without prior authorization. The Department shall report on the development of the service authorization process to the Joint Legislative Oversight Committee (LOC) on Mental Health, Developmental Disabilities, and Substance Abuse Services not later than October 1, 2008.  The Department shall not implement the service authorization process until after it has consulted with the LOC.
SECTION 2.(c)  The Department of Health and Human Services shall conduct a thorough study of the service authorization, utilization review, and utilization management processes and shall develop a plan to return the service authorization, utilization review, and utilization management functions to LMEs for all clients.  Not later than February 1, 2009, the Department shall report its findings and recommendations to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, the Joint Legislative Oversight Committee on Mental Health, Developmental Disabilities, and Substance Abuse Services, and the Fiscal Research Division. The Department shall comply with the requirements of S.L. 2007‑323, Section 10.49(ee).  The Department shall not contract with an outside vendor for service authorization, utilization review, or utilization management functions, or otherwise obligate the State for these functions beyond June 30, 2009.  The Department shall require LMEs to include in their service authorization, utilization management, and utilization review a review of assessments, as well as person centered plans and random or triggered audits of services and assessments. In no event shall services be delivered without prior authorization.
SECTION 2.(d))  The Department shall require that the licensed professional that signs a medical order for behavioral health services must indicate on the order whether the licensed professional (i) has had direct contact with the consumer, and (ii) has reviewed the consumer's assessment.  This requirement shall take effect no later than October 1, 2008.
SECTION 2.(e)  G.S. 122C‑151.4 reads as rewritten:
"§ 122C‑151.4.  Appeal to State MH/DD/SA Appeals Panel.
(a)	Definitions. – The following definitions apply in this section:
(1)	"Appeals Panel" means the State MH/DD/SA Appeals Panel established under this section.
(1a)	"Client" means an individual who is admitted to or receiving public services from an area facility. "Client" includes the client's personal representative or designee.
(1b)	"Contract" means a contract with an area authority or county program to provide services, other than personal services, to clients and other recipients of services.
(2)	"Contractor" means a person who has a contract or who had a contract during the current fiscal  year, or whose application for endorsement has been denied by an area authority or county program.
(3)	"Former contractor" means a person who had a contract during the previous fiscal year.
(b)	Appeals Panel. – The State MH/DD/SA Appeals Panel is established. The Panel shall consist of three members appointed by the Secretary. The Secretary shall determine the qualifications of the Panel members. Panel members serve at the pleasure of the Secretary.
(c)	Who Can Appeal. – The following persons may appeal to the State MH/DD/SA Appeals Panel after having exhausted the appeals process at the appropriate area authority or county program:
(1)	A contractor or a former contractor who claims that an area authority or county program is not acting or has not acted within applicable State law or rules in denying the contractor's application for endorsement or in imposing a particular requirement on the contractor on fulfillment of the contract;
(2)	A contractor or a former contractor who claims that a requirement of the contract substantially compromises the ability of the contractor to fulfill the contract;
(3)	A contractor or former contractor who claims that an area authority or county program has acted arbitrarily and capriciously in reducing funding for the type of services provided or formerly provided by the contractor or former contractor;
(4)	A client or a person who was a client in the previous fiscal year, who claims that an area authority or county program has acted arbitrarily and capriciously in reducing funding for the type of services provided or formerly provided to the client directly by the area authority or county program; and
(5)	A person who claims that an area authority or county program did not comply with a State law or a rule adopted by the Secretary or the Commission in developing the plans and budgets of the area authority or county program and that the failure to comply has adversely affected the ability of the person to participate in the development of the plans and budgets.
(d)	Hearing. – All members of the State MH/DD/SA Appeals Panel shall hear an appeal to the Panel. An appeal shall be filed with the Panel within the time required by the Secretary and shall be heard by the Panel within the time required by the Secretary. A hearing shall be conducted at the place determined in accordance with the rules adopted by the Secretary. A hearing before the Panel shall be informal; no sworn testimony shall be taken and the rules of evidence do not apply. The person who appeals to the Panel has the burden of proof. The Panel shall not stay a decision of an area authority during an appeal to the Panel.
(e)	Decision. – The State MH/DD/SA Appeals Panel shall make a written decision on each appeal to the Panel within the time set by the Secretary. A decision may direct a contractor, an area authority, or a county program to take an action or to refrain from taking an action, but it shall not require a party to the appeal to pay any amount except payment due under the contract. In making a decision, the Panel shall determine the course of action that best protects or benefits the clients of the area authority or county program. If a party to an appeal fails to comply with a decision of the Panel and the Secretary determines that the failure deprives clients of the area authority or county program of a type of needed service, the Secretary may use funds previously allocated to the area authority or county program to provide the service.
(f)	Chapter 150B Appeal. – A person who is dissatisfied with a decision of the Panel may commence a contested case under Article 3 of Chapter 150B of the General Statutes. Notwithstanding G.S. 150B‑2(1a), an area authority or county program is considered an agency for purposes of the limited appeal authorized by this section. If the need to first appeal to the State MH/DD/SA Appeals Panel is waived by the Secretary, a contractor may appeal directly to the Office of Administrative Hearings after having exhausted the appeals process at the appropriate area authority or county program. The Secretary shall make a final decision in the contested case."
SECTION 2.(f).  The Department of Health and Human Services shall adopt guidelines for LME periodic review and re‑endorsement of providers to ensure that only qualified providers are endorsed and that LMEs hold those providers accountable for the Medicaid and State‑funded services they provide. Not less than fifty percent (50%) of community services must be delivered by qualified professionals.
SECTION 3.(a)  Section 10.49(ee)(5) and (6) of S.L. 2007‑323 read as rewritten:
"(5)	All community support services are subject to prior approval.	"
SECTION 3.(b)  The Department of Health and Human Services, Division of Medical Assistance, shall adopt a policy reducing the maximum allowable hours for community support services to 8 hours per week.
SECTION 4.  The Secretary of Health and Human Services shall adopt guidelines requiring that certain facilities and providers authorized to provide mental health, developmental disabilities, and substance abuse services be accredited by a national accrediting organization chosen by the Secretary.  The Secretary shall apply to the Centers for Medicare and Medicaid Services for an amendment to the State Medical Assistance Plan, if such amendment is required, to implement the guidelines.  If a State plan amendment is approved, the Secretary shall adopt rules for implementing accreditation requirements.  The guidelines adopted by the Secretary shall contain benchmarks for meeting the timeline for obtaining national accreditation.
SECTION 5.  This act becomes effective July 1, 2008.