AN ACT to establish grievance and appeal procedures for LOCAL MANAGEMENT ENTITY/MANAGED CARE ORGANIZATION (LME/MCO) MEDICAID ENROLLEES; to require the department of health and human services to establish a supportive housing program for individuals transitioning from institutional settings to integrated community‑based settings, to clarify how funds appropriated to the department of health and human services for the establishment and OPERATION of this program shall be used, and to create a community living housing fund within the housing finance agency to integrate individuals with disabilities into community‑based supported housing; AND TO Modify Allocation of State's share in Hospital Provider Assessment tax. 

The General Assembly of North Carolina enacts:

PART I. ESTABLISH GRIEVANCE AND APPEAL PROCEDURES FOR LOCAL MANAGEMENT ENTITY/MANAGED CARE ORGANIZATION MEDICAID ENROLLEES.
SECTION 1.  The General Statutes are amended by adding a new Chapter to read:
"Chapter 108D.
"Medicaid Managed Care for Behavioral Health Services.
"Article 1.
"General Provisions.
"§ 108D‑1.  Definitions.
The following definitions apply in this Chapter, unless the context clearly requires otherwise:
(1)	Applicant. – A provider of mental health, intellectual or developmental disabilities, and substance abuse services who is seeking to participate in the closed network of one or more local management entity/managed care organizations.
(2)	Closed network. – The network of providers that have contracted with a local management entity/managed care organization to furnish mental health, intellectual or developmental disabilities, and substance abuse services to enrollees.
(3)	Contested case hearing. – The hearing or hearings conducted at the Office of Administrative Hearings under G.S. 108D‑8 to resolve a dispute between an enrollee and a local management entity/managed care organization about a managed care action.
(4)	Department. – The North Carolina Department of Health and Human Services.
(5)	Emergency medical condition. – As defined in 42 C.F.R. § 438.114.
(6)	Emergency services. – As defined in 42 C.F.R. § 438.114.
(7)	Enrollee. – A Medicaid beneficiary who is currently enrolled with a local management entity/managed care organization.
(8)	Local Management Entity or LME. – As defined in G.S. 122C‑3(20b).
(9)	Local Management Entity/Managed Care Organization or LME/MCO. – As defined in G.S. 122C‑3(20c).
(10)	Managed care action. – An action, as defined in 42 C.F.R. § 438.400(b).
(11)	Managed Care Organization or MCO. – As defined in 42 C.F.R. § 438.2.
(12)	Mental health, intellectual or developmental disabilities, and substance abuse services or MH/IDD/SA services. – Those mental health, intellectual or developmental disabilities, and substance abuse services covered under a contract in effect between the Department of Health and Human Services and a local management entity to operate a managed care organization or prepaid inpatient health plan (PIHP) under the 1915(b)/(c) Medicaid Waiver approved by the federal Centers for Medicare and Medicaid Services (CMS).
(13)	Network provider. – An appropriately credentialed provider of mental health, intellectual or developmental disabilities, and substance abuse services that has entered into a contract for participation in the closed network of one or more local management entity/managed care organizations.
(14)	Notice of managed care action. – The notice required by 42 C.F.R. § 438.404.
(15)	Notice of resolution. – The notice described in 42 C.F.R. § 438.408(e).
(16)	OAH. – The North Carolina Office of Administrative Hearings.
(17)	Prepaid Inpatient Health Plan or PIHP. – As defined in 42 C.F.R. § 438.2.
(18)	Provider of emergency services. – A provider that is qualified to furnish emergency services to evaluate or stabilize an enrollee's emergency medical condition.
"§ 108D‑2.  Scope; applicability of this Chapter.This Chapter applies to every LME/MCO and to every applicant, enrollee, provider of emergency services, and network provider of an LME/MCO.
"§ 108D‑3.  Conflicts; severability.
(a)	To the extent that this Chapter conflicts with the Social Security Act or 42 C.F.R. Part 438, federal law prevails.
(b)	To the extent that this Chapter conflicts with any other provision of State law that is contrary to the principles of managed care that will ensure successful containment of costs for behavioral health care services, this Chapter prevails and applies.
(c)	If any section, term, or provision of this Chapter is adjudged invalid for any reason, these judgments shall not affect, impair, or invalidate any other section, term, or provision of this Chapter, but the remaining sections, terms, and provisions shall be and remain in full force and effect.
"Article 2.
"Enrollee Grievances and Appeals.
"§ 108D‑4.  LME/MCO grievance and appeal procedures, generally.
(a)	Each LME/MCO shall establish and maintain internal grievance and appeal procedures that (i) comply with the Social Security Act and 42 C.F.R. Part 438, Subpart F, and (ii) afford enrollees, and network providers authorized in writing to act on behalf of enrollees, constitutional rights to due process and a fair hearing.
(b)	Enrollees, or network providers authorized in writing to act on behalf of enrollees, may file requests for grievances and LME/MCO level appeals orally or in writing. However, unless the enrollee or network provider requests an expedited appeal, the oral filing must be followed by a written, signed grievance or appeal.
(c)	An LME/MCO shall not attempt to influence, limit, or interfere with an enrollee's right or decision to file a grievance, request for an LME/MCO level appeal, or a contested case hearing. However, nothing in this Chapter shall be construed to prevent an LME/MCO from doing any of the following:
(1)	Offering an enrollee alternative services.
(2)	Engaging in clinical or educational discussions with enrollees or providers.
(3)	Engaging in informal attempts to resolve enrollee concerns prior to the issuance of a notice of grievance disposition or notice of resolution.
(d)	An LME/MCO shall not take punitive action against a provider for any of the following:
(1)	Filing a grievance on behalf of an enrollee or supporting an enrollee's grievance.
(2)	Requesting an LME/MCO level appeal on behalf of an enrollee or supporting an enrollee's request for an LME/MCO level appeal.
(3)	Requesting an expedited LME/MCO level appeal on behalf of an enrollee or supporting an enrollee's request for an LME/MCO level expedited appeal.
(4)	Requesting a contested case hearing on behalf of an enrollee or supporting an enrollee's request for a contested case hearing.
"§ 108D‑5.  LME/MCO grievances.
(a)	Filing of Grievance. – An enrollee, or a network provider authorized in writing to act on behalf of an enrollee, has the right to file a grievance with an LME/MCO at any time to express dissatisfaction about any matter other than a managed care action. Upon receipt of a grievance, an LME/MCO shall cause a written acknowledgment of receipt of the grievance to be sent by United States mail.
(b)	Notice of Grievance Disposition. – The LME/MCO shall resolve the grievance and cause a notice of grievance disposition to be sent by United States mail to the enrollee and all other affected parties as expeditiously as the enrollee's health condition requires, but no later than 90 days after receipt of the grievance.
(c)	Right to LME/MCO Level Appeal. – There is no right to appeal the resolution of a grievance to OAH or any other forum.
"§ 108D‑6.  Standard LME/MCO level appeals.
(a)	Notice of Managed Care Action. – An LME/MCO shall provide an enrollee with written notice of a managed care action by United States mail as required under 42 C.F.R. § 438.404. The notice of action will employ a standardized form included as a provision in the contracts between the LME/MCOs and the Department of Health and Human Services.
(b)	Request for Appeal. – An enrollee, or a network provider authorized in writing to act on behalf of the enrollee, has the right to file a request for an LME/MCO level appeal of a notice of managed care action no later than 30 days after the mailing date of the grievance disposition or notice of managed care action. Upon receipt of a request for an LME/MCO level appeal, an LME/MCO shall acknowledge receipt of the request for appeal in writing by United States mail.
(c)	Continuation of Benefits. – An LME/MCO shall continue the enrollee's benefits during the pendency of an LME/MCO level appeal to the same extent required under 42 C.F.R. § 438.420.
(d)	Notice of Resolution. – The LME/MCO shall resolve the appeal as expeditiously as the enrollee's health condition requires, but no later than 45 days after receiving the request for appeal. The LME/MCO shall provide the enrollee and all other affected parties with a written notice of resolution by United States mail within this 45‑day period.
(e)	Right to Request Contested Case Hearing. – An enrollee, or a network provider authorized in writing to act on behalf of an enrollee, may file a request for a contested case hearing under G.S. 108D‑8 as long as the enrollee or network provider has exhausted the appeal procedures described in this section or G.S. 108D‑7.
(f)	Request Form for Contested Case Hearing. – In the same mailing as the notice of resolution, the LME/MCO shall also provide the enrollee with an appeal request form for a contested case hearing that meets the requirements of G.S. 108D‑8(f).
"§ 108D‑7.  Expedited LME/MCO level appeals.
(a)	Request for Expedited Appeal. – When the time limits for completing a standard appeal could seriously jeopardize the enrollee's life or health or ability to attain, maintain, or regain maximum function, an enrollee, or a network provider authorized in writing to act on behalf of an enrollee, has the right to file a request for an expedited appeal of a managed care action no later than 30 days after the mailing date of the notice of managed care action. For expedited appeal requests made by enrollees, the LME/MCO shall determine if the enrollee qualifies for an expedited appeal. For expedited appeal requests made by network providers on behalf of enrollees, the LME/MCO shall presume an expedited appeal is necessary.
(b)	Notice of Denial for Expedited Appeal. – If the LME/MCO denies a request for an expedited LME/MCO level appeal, the LME/MCO shall make reasonable efforts to give the enrollee and all other affected parties oral notice of the denial and follow up with written notice of denial by United States mail by no later than two calendar days after receiving the request for an expedited appeal. In addition, the LME/MCO shall resolve the appeal within the time limits established for standard LME/MCO level appeals in G.S. 108D‑6.(c)	Continuation of Benefits. – An LME/MCO shall continue the enrollee's benefits during the pendency of an expedited LME/MCO level appeal to the extent required under 42 C.F.R. § 438.420.
(d)	Notice of Resolution. – If the LME/MCO grants a request for an expedited LME/MCO level appeal, the LME/MCO shall resolve the appeal as expeditiously as the enrollee's health condition requires, and no later than three working days after receiving the request for an expedited appeal. The LME/MCO shall provide the enrollee and all other affected parties with a written notice of resolution by United States mail within this three‑day period.
(e)	Right to Request Contested Case Hearing. – An enrollee, or a network provider authorized in writing to act on behalf of an enrollee, may file a request for a contested case hearing under G.S. 108D‑8 as long as the enrollee or network provider has exhausted the appeal procedures described in G.S. 108D‑6 or this section.
(f)	Reasonable Assistance. – An LME/MCO shall provide the enrollee with reasonable assistance in completing forms and taking other procedural steps necessary to file an appeal, including providing interpreter services and toll‑free numbers that have adequate teletypewriter/telecommunications devices for the deaf (TTY/TDD) and interpreter capability.
(g)	Request Form for Contested Case Hearing. – In the same mailing as the notice of resolution, the LME/MCO shall also provide the enrollee with an appeal request form for a contested case hearing that meets the requirements of G.S. 108D‑8(f).
"§ 108D‑8.  Contested case hearings on disputed managed care actions.
(a)	Jurisdiction of the Office of Administrative Hearings. – The Office of Administrative Hearings does not have jurisdiction over a dispute concerning a managed care action, except as expressly set forth in this Chapter.
(b)	Exclusive Administrative Remedy. – Notwithstanding any provision of State law or rules to the contrary, this section is the exclusive method for an enrollee to contest a notice of resolution issued by an LME/MCO. G.S. 108A‑70.9A, 108A‑70.9B, and 108A‑70.9C do not apply to enrollees contesting a managed care action.
(c)	Request for Contested Case Hearing. – A request for an administrative hearing to appeal a notice of resolution issued by an LME/MCO is a contested case subject to the provisions of Article 3 of Chapter 150B of the General Statutes. An enrollee, or a network provider authorized in writing to act on behalf of an enrollee, has the right to file a request for appeal to contest a notice of resolution as long as the enrollee or network provider has exhausted the appeal procedures described in G.S. 108D‑6 or G.S. 108D‑7.
(d)	Filing Procedure. – An enrollee, or a network provider authorized in writing to act on behalf of an enrollee, may file a request for an appeal by sending an appeal request form that meets the requirements of subsection (e) of this section to OAH and the affected LME/MCO by no later than 30 days after the mailing date of the notice of resolution. A request for appeal is deemed filed when a completed and signed appeal request form has been both submitted into the care and custody of the chief hearings clerk of OAH and accepted by the chief hearings clerk. Upon receipt of a timely filed appeal request form, information contained in the notice of resolution is no longer confidential, and the LME/MCO shall immediately forward a copy of the notice of resolution to OAH electronically. OAH may dispose of these records after one year.
(e)	Parties. – The LME/MCO shall be the respondent for purposes of this appeal. The LME/MCO or enrollee may move for the permissive joinder of the Department under Rule 20 of the North Carolina Rules of Civil Procedure. The Department may move to intervene as a necessary party under Rules 19 and 24 of the North Carolina Rules of Civil Procedure.
(f)	Appeal Request Form. – In the same mailing as the notice of resolution, the LME/MCO shall also provide the enrollee with an appeal request form for a contested case hearing which shall be no more than one side of one page. The form shall include at least all of the following:
(1)	A statement that in order to request an appeal, the enrollee must file the form in accordance with OAH rules, by mail or fax to the address or fax number listed on the form, by no later than 30 days after the mailing date of the notice of resolution.
(2)	The enrollee's name, address, telephone number, and Medicaid identification number.
(3)	A preprinted statement that indicates that the enrollee would like to appeal a specific managed care action identified in the notice of resolution.
(4)	A statement informing the enrollee of the right to be represented at the contested case hearing by a lawyer, a relative, a friend, or other spokesperson.
(5)	A space for the enrollee's signature and date.
(g)	Continuation of Benefits. – An LME/MCO shall continue the enrollee's benefits during the pendency of an appeal to the same extent required under 42 C.F.R. § 438.420. Notwithstanding any other provision of State law, the administrative law judge does not have the power to order and shall not order an LME/MCO to continue benefits in excess of what is required by 42 C.F.R. § 438.420.
(h)	Simple Procedures. – Notwithstanding any other provision of Article 3 of Chapter 150B of the General Statutes, the chief administrative law judge of OAH may limit and simplify the administrative hearing procedures that apply to contested case hearings conducted under this section in order to complete these cases as expeditiously as possible. Any simplified hearing procedures approved by the chief administrative law judge under this subsection must comply with all of the following requirements:
(1)	OAH shall schedule and hear cases by no later than 55 days after receipt of a request for a contested case hearing.
(2)	OAH shall conduct all contested case hearings telephonically or by video technology with all parties, unless the enrollee requests that the hearing be conducted in person before the administrative law judge. An in‑person hearing shall be conducted in the county that contains the headquarters of the LME/MCO unless the enrollee's impairments limit travel. For enrollees with impairments that limit travel, an in‑person hearing shall be conducted in the enrollee's county of residence. OAH shall provide written notice to the enrollee of the use of telephonic hearings, hearings by video conference, and in‑person hearings before the administrative law judge, as well as written instructions on how to request a hearing in the enrollee's county of residence.
(3)	The administrative law judge assigned to hear the case shall consider and rule on all prehearing motions prior to the scheduled date for a hearing on the merits.
(4)	The administrative law judge may allow brief extensions of the time limits imposed in this section only for good cause shown and to ensure that the record is complete. The administrative law judge shall only grant a continuance of a hearing in accordance with rules adopted by OAH for good cause shown and shall not grant a continuance on the day of a hearing, except for good cause shown. If an enrollee fails to make an appearance at a hearing that has been properly noticed by OAH by United States mail, OAH shall immediately dismiss the case, unless the enrollee moves to show good cause by no later than three business days after the date of dismissal. As used in this section, "good cause shown" includes delays resulting from untimely receipt of documentation needed to render a decision and other unavoidable and unforeseen circumstances.
(5)	OAH shall include information on at least all of the following in its notice of hearing to an enrollee:
a.	The enrollee's right to examine at a reasonable time before and during the hearing the contents of the enrollee's case file and any documents to be used by the LME/MCO in the hearing before the administrative law judge.
b.	The enrollee's right to an interpreter during the hearing process.
c.	The circumstances in which a medical assessment may be obtained at the LME/MCO's expense and made part of the record, including all of the following:
1.	A hearing involving medical issues, such as a diagnosis, an examining physician's report, or a decision by a medical review team.
2.	A hearing in which the administrative law judge considers it necessary to have a medical assessment other than the medical assessment performed by an individual involved in any previous level of review or decision making.
(i)	Mediation. – Upon receipt of an appeal request form as provided by G.S. 108D‑8(f) or other clear request for a hearing by an enrollee, OAH shall immediately notify the Mediation Network of North Carolina, which shall contact the enrollee within five days to offer mediation in an attempt to resolve the dispute. If mediation is accepted, the mediation must be completed within 25 days of submission of the request for appeal. Upon completion of the mediation, the mediator shall inform OAH and the LME/MCO within 24 hours of the resolution by facsimile or electronic messaging. If the parties have resolved matters in the mediation, OAH shall dismiss the case. OAH shall not conduct a hearing of any contested case involving a dispute of a managed care action until it has received notice from the mediator assigned that either (i) the mediation was unsuccessful, (ii) the petitioner has rejected the offer of mediation, or (iii) the petitioner has failed to appear at a scheduled mediation. Nothing in this subsection shall restrict the right to a contested case hearing.
(j)	Burden of Proof. – The enrollee has the burden of proof on all issues submitted to OAH for a contested case hearing under this section and has the burden of going forward. The administrative law judge shall not make any ruling on the preponderance of evidence until the close of all evidence in the case.
(k)	New Evidence. – The enrollee shall be permitted to submit evidence regardless of whether it was obtained before or after the LME/MCO's managed care action and regardless of whether the LME/MCO had an opportunity to consider the evidence in resolving the LME/MCO level appeal. Upon the receipt of new evidence and at the request of the LME/MCO, the administrative law judge shall continue the hearing for a minimum of 15 days and a maximum of 30 days in order to allow the LME/MCO to review the evidence. Upon reviewing the evidence, if the LME/MCO decides to reverse the managed care action taken against the enrollee, it shall immediately inform the administrative law judge of its decision.
(l)	Issue for Hearing. – For each managed care action, the administrative law judge shall determine whether the LME/MCO substantially prejudiced the rights of the enrollee and whether the LME/MCO, based upon evidence at the hearing:
(1)	Exceeded its authority or jurisdiction.
(2)	Acted erroneously.
(3)	Failed to use proper procedure.
(4)	Acted arbitrarily or capriciously.
(5)	Failed to act as required by law or rule.
(m)	To the extent that anything in this Part, Chapter 150B of the General Statutes, or any rules or policies adopted under these Chapters is inconsistent with the Social Security Act or 42 C.F.R. Part 438, Subpart F, federal law prevails and applies to the extent of the conflict. All rules, rights, and procedures for contested case hearings concerning managed care actions shall be construed so as to be consistent with federal law and shall provide the enrollee with no lesser and no greater rights than those provided under federal law.
"§ 108D‑9.  Notice of final decision and right to seek judicial review.
The administrative law judge assigned to conduct a contested case hearing under G.S. 108D‑8 shall hear and decide the case without unnecessary delay. The judge shall prepare a written decision that includes findings of fact and conclusions of law and send it to the parties in accordance with G.S. 150B‑37. The written decision shall notify the parties of the final decision and of the right of the enrollee and the LME/MCO to seek judicial review of the decision under Article 4 of Chapter 150B of the General Statutes."
SECTION 2.  G.S. 122C‑151.3 reads as rewritten:
"§ 122C‑151.3.  Dispute with area authorities or county programs.
(a)	An area authority or county program shall establish written procedures for resolving disputes over decisions of an area authority or county program that may be appealed to the State MH/DD/SA Appeals Panel under G.S. 122C‑151.4. The procedures shall be informal and shall provide an opportunity for those who dispute the decision to present their position.
(b)	This section does not apply to LME/MCOs, enrollees, applicants, providers of emergency services, or network providers subject to Chapter 108D of the General Statutes."
SECTION 3.  G.S. 122C‑151.4(g) reads as rewritten:
"(g)	This section does not apply to LME/MCOs, enrollees, applicants, providers of emergency services, or network providers subject to Chapter 108D of the General Statutes."
SECTION 4.  G.S. 150B‑23 is amended by adding a new subsection to read:
"(a3)	A Medicaid enrollee, or network provider authorized in writing to act on behalf of the enrollee, who appeals a notice of resolution issued by an LME/MCO under Chapter 108D of the General Statutes may commence a contested case under this Article in the same manner as any other petitioner. The case shall be conducted in the same manner as other contested cases under this Article. Solely and only for the purposes of contested cases commenced as Medicaid managed care enrollee appeals under Chapter 108D of the General Statutes, an LME/MCO is considered an agency as defined in G.S. 150B‑2(1a). The LME/MCO shall not be considered an agency for any other purpose."
SECTION 5.  By September 30, 2013, the Department of Health and Human Services shall take any action necessary to implement this act, including submitting to the Centers for Medicare and Medicaid Services a Medicaid State Plan Amendment with a retroactive effective date of July 1, 2013. On or before September 30, 2013, the Department of Health and Human Services shall report to the Joint Legislative Oversight Committee on Health and Human Services on the status of the implementation of this act.

PART II. BLUE RIBBON COMMISSION RECOMMENDATIONS/SUPPORTIVE MENTAL HEALTH HOUSING.
SECTION 6.(a)  Chapter 122C of the General Statutes is amended by adding a new Article to read:
"Article 1B.
"Transitions to Community Living.
"Part 1. North Carolina Supportive Housing Program.
"§ 122C‑20.5.  Definitions.
The following definitions apply in this Article:
(1)	Individual with serious mental illness or SMI. – An individual who is 18 years of age or older with a mental illness or disorder that is described in the Diagnostic and Statistical Manual of Mental Disorders, Fourth Edition, that impairs or impedes functioning in one or more major areas of living and is unlikely to improve without treatment, services, supports, or all three. The term does not include a primary diagnosis of Alzheimer's disease or dementia.
(2)	Individual with serious and persistent mental illness or SPMI. – A person who is 18 years of age or older who meets one of the following criteria:
a.	Has a mental illness or disorder that is so severe and chronic that it prevents or erodes development of functional capacities in primary aspects of daily life such as personal hygiene and self‑care, decision making, interpersonal relationships, social transactions, learning, and recreational activities.
b.	Is receiving Supplemental Security Income or Social Security Disability Income due to mental illness.
"§ 122C‑20.6.  Department to establish statewide supportive housing program for individuals transitioning into community living; purpose.
The Department of Health and Human Services, in consultation with the North Carolina Housing Finance Agency, shall establish and administer a tenant‑based rental assistance program known as the North Carolina Supportive Housing Program. The purpose of the program is to transition individuals diagnosed with serious mental illness or serious and persistent mental illness from institutional settings to more integrated community‑based settings appropriate to meet their needs. Under the program, the Department, in consultation with the North Carolina Housing Finance Agency and LME/MCOs, shall arrange for program participants to be transitioned to housing slots available through the program with all the rights and obligations created by a landlord‑tenant relationship.
"§ 122C‑20.7.  Administration of housing subsidies for supportive housing.
The Department may enter into a contract with a private vendor to serve as the housing subsidy administrator for the North Carolina Supportive Housing Program with responsibility for distributing rental vouchers and community living vouchers to program participants based on a formula developed by the Department.
"§ 122C‑20.8.  Eligibility requirements for NC Supportive Housing Program.
The Division of Aging and Adult Services shall adopt rules to establish eligibility requirements for the program. The eligibility requirements shall, at a minimum, include income eligibility requirements and requirements to give priority for program participation and transition services to individuals diagnosed with serious mental illness or serious and persistent mental illness who are currently residing in institutional settings. The Division may adopt temporary rules necessary to implement this Article.
"§ 122C‑20.9.  In‑reach activities for supportive housing.
The Department shall have ongoing responsibility for developing and distributing a list of potentially eligible program participants for each LME/MCO by catchment area. Upon receipt of this information, each LME/MCO shall have ongoing responsibility for prioritizing the list of individuals to whom it will provide in‑reach activities in order to (i) arrange an in‑person meeting with potentially eligible participants to determine their eligibility and level of interest and (ii) report back to the Department on the LME/MCO's recommended list of program participants on a daily basis. Upon receipt of an LME/MCO's recommended list of program participants, the Department shall make a final determination of eligibility.
"§ 122C‑20.10.  Allocation of supportive housing slots to LME/MCOs.
The Department shall annually determine the number of housing slots to be allocated to each LME/MCO as follows:
(1)	Each year, the Department shall distribute at least fifty percent (50%) of the housing slots available through this program equally among all LME/MCOs.
(2)	The Department shall award additional housing slots to LME/MCOs based on local need, as determined by the information provided by LME/MCOs to the Department in accordance with G.S. 122C‑20.9.
"§ 122C‑20.11.  Transition of program participants into housing slots.
The LME/MCO shall develop a written transition plan for each individual determined to be eligible and interested in participating in the North Carolina Supportive Housing Program. The transition plan for the approved housing slot shall identify at least all of the following:
(1)	Available housing units that meet the individual's needs.
(2)	Any transition services that will be necessary for the individual, including, but not limited to, a one‑time transition stability payment, not to exceed two thousand dollars ($2,000) per individual, for up‑front move‑in costs approved by the Department or the housing subsidy administrator.
(3)	Solutions to potential barriers to the individual's successful transition to community‑based supported housing.
(4)	Any other information the Department deems necessary for the individual program participant's successful transition into community‑based supported housing.
"§ 122C‑20.12.  Transition services.
LME/MCOs shall provide individualized transition services to program participants within their respective catchment areas for the 90‑day period following the individual's transition into a housing slot provided through the program.
"§ 122C‑20.13.  Tenancy support services.
The Department or the housing subsidy administrator shall provide ongoing tenancy support services to program participants.
"§ 122C‑20.14.  Approval of landlords and housing units.
The Department shall develop an application process for owners of housing units seeking to participate in the program as landlords. The application process shall, at a minimum, include an inspection of the owners' selected housing units and a requirement that owners receive educational information from the Department about the North Carolina Supportive Housing Program prior to being approved as landlords.
"§ 122C‑20.15.  Annual reporting on NC Supportive Housing Program.
Annually on October 1, the Department shall report to the Joint Legislative Oversight Committee on Health and Human Services of the General Assembly on the number of individuals within each LME/MCO catchment area who transitioned into housing slots available through the North Carolina Supportive Housing Program during the preceding calendar year. The report shall include a breakdown of all funds expended by each LME/MCO for transitioning these individuals into the housing slots.
"§ 122C‑20.16.  NC Supportive Housing Program not an entitlement.
The Department shall not be required to provide housing slots to individuals beyond the number that can be supported by funds appropriated by the General Assembly for this purpose. The supportive housing program established under this Part, whether administered by the Department or a private entity, is not an entitlement, and nothing in this Part shall create any property right."
SECTION 6.(b)  By no later than October 1, 2013, each LME/MCO shall transition at least 15 eligible individuals to community‑based supported housing slots available through the North Carolina Supportive Housing Program established under G.S. 122C‑20.5.
SECTION 7.  Funds appropriated to the Department of Health and Human Services for the 2013‑2015 fiscal biennium to develop and implement housing, support, and other services for people with mental illness pursuant to the Department of Justice settlement agreement shall be used as follows:
(1)	The sum of one million seven hundred forty‑five thousand two hundred eighty dollars ($1,745,280) for fiscal year 2013‑2014 and the sum of three million one hundred twenty thousand thirty‑seven dollars ($3,120,037) for fiscal year 2014‑2015 shall be used to establish and operate the North Carolina Supportive Housing Program authorized in Article 1B of Chapter 122C of the General Statutes.
(2)	The sum of one million four hundred forty thousand dollars ($1,440,000) for fiscal year 2013‑2014 and the sum of one million five hundred forty thousand dollars ($1,540,000) for fiscal year 2014‑2015 shall be used for program administration for the North Carolina Supportive Housing Program authorized in Article 1B of Chapter 122C of the General Statutes.
(3)	The sum of six hundred fifty thousand dollars ($650,000) for fiscal year 2013‑2014 and the sum of one million two hundred sixteen thousand dollars ($1,216,000) for fiscal year 2014‑2015 shall be used to provide one‑time transition stability funds, not to exceed two thousand dollars ($2,000) per individual, to cover the cost of up‑front move‑in costs for individuals placed in housing slots available through the North Carolina Supportive Housing Program authorized in Article 1B of Chapter 122C of the General Statutes.
(4)	Any funds appropriated for the 2014‑2015 fiscal year that are not used for the purposes set forth in subdivisions (1) through (3) of this section shall be used to provide a comprehensive array of services that individuals need to transition to and be maintained in the community.
SECTION 8.  Chapter 122E of the General Statutes is amended by adding a new section to read:
"§ 122E‑3A.  Community Living Housing Fund.
(a)	Definitions. – The following definitions apply in this section:
(1)	Catchment area. – As defined in G.S. 122C‑3.
(2)	Targeted units. – Units within Low Income Housing Tax Credit developments that are specifically designed to facilitate the inclusion of individuals with disabilities.
(b)	Creation and Source of Funds. – The Community Living Housing Fund is established within the Housing Finance Agency to pay for the transition of individuals diagnosed with severe mental illness or severe and persistent mental illness as defined in G.S. 122C‑20.5 from institutional settings to integrated, community‑based supported housing and to increase the percentage of targeted housing units available to individuals with disabilities for use in the North Carolina Supportive Housing Program under Article 1B of Chapter 122C of the General Statutes. Beginning with fiscal year 2013‑2014, any unexpended, unencumbered balance of the amount appropriated to the Transitions to Community Living Fund established pursuant to Section 10.23A(d) of S.L. 2012‑142 at the end of each fiscal year shall not revert but shall be transferred and made available to the Community Living Housing Fund.
(c)	Use of Funds. – The North Carolina Housing Finance Agency, in consultation with the Department of Health and Human Services, shall be responsible for administering the Community Living Housing Fund. The monies in the Fund shall be available for expenditure only upon an act of appropriation by the General Assembly and only for the following purposes:
(1)	To provide permanent community‑based housing in integrated settings appropriate for individuals with severe mental illness and severe and persistent mental illness.
(2)	To support an increase in the number of targeted units for individuals with disabilities located in housing projects funded by the Housing Finance Agency from ten percent (10%) to fifteen percent (15%). The additional targeted units funded shall be made available to the Department of Health and Human Services for use in the North Carolina Supportive Housing Program under Article 1B of Chapter 122C of the General Statutes. Priority for funding of the additional targeted units shall be given to units to be located in catchment areas identified by the Department of Health and Human Services, in consultation with the North Carolina Housing Finance Agency and LME/MCOs, as having the greatest need for targeted units."
SECTION 9.  The Transitions to Community Living Fund established pursuant to Section 10.23A(d) of S.L. 2012‑142 terminates on June 30, 2020, and any balance remaining on that date shall revert to the General Fund.

PART III. Modify Allocation of State's share in Hospital Provider Assessment tax.
SECTION 10.  If Senate Bill 402, 2013 Regular Session, becomes law, then G.S. 108A‑123(d) reads as rewritten:
"(d)	State's Annual Medicaid Payment. – The first forty‑three million dollars ($43,000,000) of the State's annual Medicaid payment must be allocated between the equity assessment and the UPL assessment based on the amount of gross payments received by hospitals under G.S. 108A‑124. The remaining portion of the State's annual Medicaid payment must be allocated to the UPL assessment."
SECTION 11.  Sections 1 through 5 of this act are effective when this act becomes law and apply to grievances and managed care actions filed on or after that date. Section 7 of this act becomes effective October 1, 2013. Section 10 of this act becomes effective July 1, 2013. The remainder of this act is effective when it becomes law.
In the General Assembly read three times and ratified this the 26th day of July, 2013.

	s/	 Philip E. Berger
	 President Pro Tempore of the Senate

	s/	 Thom Tillis
	 Speaker of the House of Representatives

	_____________________________________
		 Pat McCrory
	 Governor

Approved __________.m. this ______________ day of ___________________, 2013