A BILL TO BE ENTITLED
AN ACT to expand eligibility for the medicaid program to include all people under age SIXTY‑FIVE who have incomes equal to or below ONE HUNDRED THIRTY‑THREE PERCENT of the federal poverty level, to APPROPRIATE funds for costs associated with the expansion, to account for the savings to other state programs as a result of the expansion, and to have the state share of costs of the expansion FUNDEd by hospital providers.
Whereas, Medicaid expansion would create positive economic benefits for the State of North Carolina through the influx of federal funds that would attend Medicaid expansion; and
Whereas, Medicaid expansion would increase demand for health care services provided by health care providers, such as physicians, hospitals, pharmacies, and home health agencies; and
Whereas, the economic benefits of Medicaid expansion would extend beyond the health care industry because health care workers purchase goods and services in the broader economy; and
Whereas, an increase in employment and an increase in the purchase of goods and services would increase income taxes and sales and use taxes payable to the State; and
Whereas, this act provides for a new hospital assessment to be used as the temporary funding source to pay for the additional costs of Medicaid expansion with the intent that the assessment be phased‑out as the tax revenues generated by the economic benefits from expansion of the Medicaid program are realized; Now, therefore,
The General Assembly of North Carolina enacts:
SECTION 1.  Repeal of Prohibition on Medicaid Expansion. – Section 3 of S.L. 2013‑5 is repealed.
SECTION 2.  Medicaid Expansion Required. – Effective January 1, 2017, the Department of Health and Human Services, Division of Medical Assistance, shall provide Medicaid coverage to all people under age 65 who have incomes equal to or less than one hundred thirty‑three percent (133%) of the federal poverty guidelines. The medical assistance provided to persons in this Affordable Care Act expansion group shall consist of the coverage described in 42 U.S.C. § 1396a(k)(1). Specifically, persons in the expansion group who have access to employer‑sponsored insurance shall be eligible for assistance with the cost of insurance through the existing North Carolina Health Insurance Premium Payment (NC HIPP) program.
SECTION 3.  Appropriation to Pay for Administrative Costs. – There is appropriated from the General Fund to the Department of Health and Human Services, Division of Medical Assistance, the sum of seven million eight thousand seven hundred five dollars ($7,008,705) in recurring funds for the 2016‑2017 fiscal year for administrative costs associated with the Medicaid expansion required by Section 2 of this act. These funds shall provide a State match for an estimated twenty‑one million twenty‑six thousand one hundred sixteen dollars ($21,026,116) in federal funds for the 2016‑2017 fiscal year, and those federal funds are hereby appropriated to pay administrative costs associated with the Medicaid expansion required by Section 2 of this act. If the amount of federal funds available for this purpose exceeds the amounts set forth in this section, then the expenditure of State funds for this purpose shall be reduced by an amount equal to the amount of excess federal funds that are available, and these excess federal funds are hereby appropriated for the purposes described in this section.
SECTION 4.  Appropriation to Pay for Medicaid Services Costs. – The expansion of Medicaid services under this act will affect only half of the 2016‑2017 fiscal year. There is appropriated from the General Fund to the Department of Health and Human Services, Division of Medical Assistance, the sum of forty‑seven million six hundred thirty‑two thousand two hundred forty dollars ($47,632,240) in recurring funds for the 2016‑2017 fiscal year as part of the Medicaid rebase. These funds shall provide a State match for an estimated one billion two hundred twenty‑two million five hundred sixty thousand eight hundred twenty‑two dollars ($1,222,560,822) in federal funds in the 2016‑2017 fiscal year, and those federal funds are hereby appropriated to the Division of Medical Assistance to pay for Medicaid services.
SECTION 5.  Reductions to Reflect Savings in Other State Programs. – Because the Medicaid expansion required by this act will generate savings to other State programs that currently serve the population to be included in the Medicaid expansion, the following reductions are made:
(1)	Because the expansion of Medicaid services under this act will affect only half of the 2016‑2017 fiscal year, the appropriation to the Department of Health and Human Services, Division of Mental Health, is hereby reduced by eight million one hundred eighty‑five thousand nine hundred ninety‑seven dollars ($8,185,997) in recurring funds for the 2016‑2017 fiscal year.
(2)	Because the expansion of Medicaid services under this act will affect only half of the 2016‑2017 fiscal year, the appropriation for the AIDS Drug Assistance Program (ADAP) in the Department of Health and Human Services, Division of Public Health, is hereby reduced by fourteen million three hundred eight thousand six hundred twenty‑three dollars ($14,308,623) in recurring funds for the 2016‑2017 fiscal year.
(3)	Because the expansion of Medicaid services under this act will affect only half of the 2016‑2017 fiscal year, the appropriation for the Inmate Health Care program within the Department of Public Safety, Division of Adult Correction, is hereby reduced by eight million five hundred thousand dollars ($8,500,000) in recurring funds for the 2016‑2017 fiscal year.
SECTION 6.(a)  The statutory sections of Article 7 of Chapter 108A of the General Statutes, which are known as the "Hospital Provider Assessment Act," are hereby reorganized into the following parts:
(1)	"Part 1. Title, Purpose, Definitions," which shall include G.S. 108A‑120 and G.S. 108A‑121.
(2)	"Part 2. UPL and Equity Assessments," which shall include G.S. 108A‑122, 108A‑123, 108A‑124, and 108A‑125. The Revisor of Statutes shall amend references within these statutory sections to "this Article" to instead be "this Part" whenever appropriate.
(3)	"Part 3. General Provisions," which shall include G.S. 108A‑126, 108A‑127, and 108A‑128.
(4)	"Part 4. Medicaid Expansion Assessment," which shall include G.S. 108A‑131, which is enacted by subsection (b) of this section.
SECTION 6.(b)  Article 7 of Chapter 108A of the General Statutes is amended by adding the following new section:
"§ 108A‑131.  Additional assessment amount for Medicaid expansion.
(a)	Assessment Imposed. – In order for the hospital providers of this State to pay for the State share of the service and administrative costs of Medicaid expansion, each hospital that is not fully exempt from both the equity assessment and UPL assessment under G.S. 108A‑122(c) is subject to an additional assessment under this section.
(b)	Calculation and Notice. – The Secretary shall annually calculate the assessment amount for a hospital by multiplying the total State share of service and administrative costs of Medicaid expansion by the hospital provider's percentage of all Medicaid services billed by all hospitals subject to this section. The Secretary shall notify each hospital that is assessed of the following:
(1)	The total State share of service and administrative costs of Medicaid expansion for the applicable time period.
(2)	The hospital's share of all Medicaid services billed.
(3)	The amount assessed to the hospital.
(c)	Priority of Assessment. – The assessment collected under this section is in addition to and has greater priority than any assessment that might be collected from a hospital provider under Part 2 of this Article. As such, if federal limitations on the total amount of Medicaid assessments that may be collected require the State to reduce the amount of assessments collected, then the assessment amounts for the equity and UPL assessments shall be reduced prior to reducing the amount collected under this section.
(d)	Appeal. – A hospital may appeal an assessment determination through a reconsideration review. The pendency of an appeal does not relieve a hospital from its obligation to pay an assessment amount when due.
(e)	Definition. – As used in this section, the phrase "Medicaid expansion" means the Medicaid expansion provided in the Affordable Care Act, P.L. 111‑148, as amended, for which the enforcement was ruled unconstitutional by the U.S. Supreme Court in National Federation of Independent Business, et al. v. Sebelius, Secretary of Health and Human Services, et al., 132 S. Ct. 2566 (2012)."
SECTION 6.(c)  G.S. 108A‑124 is amended by adding a new subsection to read:
"(e)	Reduced Payments. – Notwithstanding subsection (d) of this section, if all or any part of a payment required to be made under this section cannot be made because the assessment amounts are reduced pursuant to G.S. 108A‑131(c), then the Secretary shall not refund the assessment proceeds and instead shall reduce the payments as follows:
(1)	Equity payments shall not be reduced until UPL payments have been reduced to zero.
(2)	Reductions to the UPL and equity payments shall be applied to each hospital's payment on a pro rata basis."
SECTION 6.(d)  This section becomes effective July 1, 2017.
SECTION 7.  Effective Date. – Except as otherwise provided, this act becomes effective July 1, 2016.