AN ACT to STRENGTHEN MEDICAID PROVIDER CONTROLS and make other changes to the medicaid program.

The General Assembly of North Carolina enacts:

SECTION 1.(a)  G.S. 108C‑1 reads as rewritten:

§ 108C‑1.  Scope; applicability of this Chapter.

This Chapter applies to providers enrolled in Medicaid. The Department may adopt rules to implement any provision of this Chapter.

SECTION 1.(b)  Chapter 108C of the General Statutes is amended by adding a new section to read:

§ 108C‑3.1.  Licensure limitation checks for providers.

When the Department becomes aware of an adverse action by a health care provider licensing entity, including through self‑reporting required under the Medicaid provider administrative participation agreement, that either (i) imposes a license limitation or restriction on a provider's scope of practice, the range of services, or the time, place, and manner in which any service is rendered that deviates from the prevailing procedures for administering the services or (ii) imposes a license limitation or restriction on a provider's ability or authority to provide care for all patients, then the Department may deny or terminate the provider retroactively to the effective date of the provider's licensing entity's adverse action.

SECTION 1.(c)  Subsection (b) of this section is effective October 1, 2026, and applies to adverse actions effective on or after that date.

SECTION 2.(a)  G.S. 108C‑2 is amended by adding a new subdivision to read:

(2e)    Committee. – The Provider Enrollment Credentialing Committee, established under G.S. 108A‑26.6.

SECTION 2.(b)  Part 1 of Article 2 of Chapter 108A of the General Statutes is amended by adding a new section to read:

§ 108A‑26.6.  Provider Enrollment Credentialing Committee; provider enrollment materials confidentiality.

(a)        The Department shall establish and determine the membership of the Provider Enrollment Credentialing Committee. The Committee is the centralized administrative body within the Department authorized to adjudicate provider participation in various programs administered by the Department.

(b)        The Provider Enrollment Credentialing Committee may review enrollment applications, including initial, reenrollment, and recredentialing during any provider credentialing process. The Provider Enrollment Credentialing Committee may review a provider's continued participation when the ongoing monitoring process reveals findings that can impact a provider's eligibility for departmental programs.

(c)        The Provider Enrollment Credentialing Committee is authorized to issue determinations regarding the denial or termination of enrollment, reenrollment, revalidation, and enrollment maintenance for providers, including those with risk factors identified through initial application review or ongoing monitoring of the provider.

(d)       The Provider Enrollment Credentialing Committee shall adopt bylaws and comply with National Committee for Quality Assurance standards, federal law and regulations, and State law.

(e)        The following information about an individual that is acquired by the Department, including through the Provider Enrollment Credentialing Committee, in connection with the initial screening of applicants for enrollment, reenrollment, change requests, revalidation, or ongoing monitoring of a provider applying for or participating in a departmental program, is confidential and not a public record under Chapter 132 of the General Statutes:

(1)        Health information, including chemical dependency or psychiatric conditions.

(2)        Adverse licensure findings.

(3)        Hospital admitting privileges denials or revocations.

(4)        Liability insurance carrier cancellations, refusals, or unusual risk ratings.

(5)        Confidential malpractice judgments and settlements.

(6)        Any nonpublic criminal record information.

(7)        Fingerprints.

(8)        Any other information otherwise protected from public disclosure.

SECTION 2.(c)  G.S. 108C‑3(a) reads as rewritten:

(a)      Provider Screening. – The Department shall conduct provider screening of Medicaid providers in accordance with applicable State or federal law or regulation. The authorization of the Provider Enrollment Credentialing Committee extends to the Medicaid program, including all prepaid health plans, as defined in G.S. 108D‑1.

SECTION 3.(a)  G.S. 108C‑4 reads as rewritten:

§ 108C‑4.  Criminal history record checks for certain providers.

(a)        The Department shall conduct criminal history records checks of provider applicants and enrolled providers providers, as well as their owners, operators, and managing employees, in accordance with federal law and regulation.

(b)        The Division shall deny enrollment or terminate the enrollment of a provider where any person with a five percent (5%) or greater direct or indirect ownership interest in the provider has been convicted of a criminal offense related to that person's involvement with the Medicare, Medicaid, or any Children's Health Insurance Program in the last 10 years, unless the Division determines that denial or termination of enrollment is not in the best interests of Medicaid and the State Medicaid agency documents that determination in writing. The Department shall honor civil and criminal settlement agreements entered into with a provider or any person with a five percent (5%) or greater direct or indirect ownership interest in the provider within 10 years of the effective date of this act.

(c)        The Division may deny enrollment or terminate the enrollment of a provider subject to G.S. 108C‑3(g) for any of the following offenses of the provider, an permanently exclude from participation any provider, or owner, an operator, or an managing employee if, after review of the seriousness, age, and other circumstances involving the offense, the Division determines it is in the best interest of the integrity of the North Carolina Medicaid program to do so:of a provider, for any of the following convictions:

(1)        Any criminal offenses conviction as set forth in any of the following Articles of Chapter 14 of the General Statutes:

a.         Article 5, Counterfeiting and Issuing Monetary Substitutes.

b.         Article 5A, Endangering Executive, Legislative, and Court Officers.

c.         Article 6, Homicide.

d.         Article 7B, Rape and Other Sex Offenses.

e.         Article 8, Assaults.

f.          Article 10, Kidnapping and Abduction.

g.         Article 13, Malicious Injury or Damage by Use of Explosive or Incendiary Device or Material.

h.         Article 14, Burglary and Other Housebreakings.

i.          Article 15, Arson and Other Burnings.

j.          Article 16, Larceny.

k.         Article 17, Robbery.

l.          Article 18, Embezzlement.

m.        Article 19, False Pretenses and Cheats.

n.         Article 19A, Obtaining Property or Services by False or Fraudulent Use of Credit Device or Other Means.

o.         Article 19B, Financial Transaction Card Crime Act.

p.         Article 20, Frauds.

q.         Article 21, Forgery.

r.          Article 26, Offenses Against Public Morality and Decency.

s.          Article 26A, Adult Establishments.

t.          Article 27, Prostitution.

u.         Article 28, Perjury.

v.         Article 29, Bribery.

w.        Article 31, Misconduct in Public Office.

x.         Article 35, Offenses Against the Public Peace.

y.         Article 36A, Riots and Civil Disorders.

z.         Article 39, Protection of Minors.

aa.        Article 40, Protection of the Family.

bb.       Article 59, Public Intoxication.

cc.        Article 60, Computer‑Related Crime.

(2)        Any criminal conviction as set forth in any of the following Articles of Chapter 14 of the General Statutes when defined as a habitual felon under G.S. 14‑7.1:

a.         Article 5A, Endangering Executive, Legislative, and Court Officers.

b.         Article 8, Assaults.

c.         Article 15, Arson and Other Burnings.

d.         Article 16, Larceny.

e.         Article 17, Robbery.

f.          Article 18, Embezzlement.

g.         Article 20, Frauds.

h.         Article 21, Forgery.

(d)       The Division may terminate the enrollment of a provider upon the conviction of the provider, or the owner, operator, or managing employee of that provider, under any of the following:

(1)        Article 5, Counterfeiting and Issuing Monetary Substitutes.

(2)        Article 10, Kidnapping and Abduction.

(3)        Article 13, Malicious Injury or Damage by Use of Explosive or Incendiary Device or Material.

(4)        Any criminal conviction in subdivision (2) of subsection (c) of this section when not defined as a habitual felon under G.S. 14‑7.1.

A provider may be excluded from enrollment for a period of 10 years from the date the provider, or owner, operator, or managing employee of that provider, was fully discharged from all imprisonment, probation, parole, and full payment of restitution for a conviction under this subsection.

(e)        The Division may terminate the enrollment of a provider upon the conviction of the provider, or the owner, operator, or managing employee of that provider, under any of the following:

(2)(1)   Possession or sale of drugs in violation of the North Carolina Controlled Substances Act, Article 5 of Chapter 90 of the General Statutes.

(3)(2)   Alcohol‑related offenses such as sale to underage persons in violation of G.S. 18B‑302.

A provider may be excluded from enrollment for a period of five years from the date the provider, or owner, operator, or managing employee of that provider, was fully discharged from all imprisonment, probation, parole, and full payment of restitution for a conviction under this subsection.

(f)        The Division may terminate the enrollment of a provider upon the conviction of the provider, or the owner, operator, or managing employee of that provider, under any of the following:

(1)        Article 14, Burglary and Other Housebreakings.

(2)        Article 19, False Pretenses and Cheats.

(3)        Article 19A, Obtaining Property or Services by False or Fraudulent Use of Credit Device or Other Means.

(4)        Article 19B, Financial Transaction Card Crime Act.

(5)        Article 26, Offenses Against Public Morality and Decency.

(6)        Article 27, Prostitution.

(7)        Article 28, Perjury.

(8)        Article 29, Bribery.

(9)        Article 31, Misconduct in Public Office.

(10)      Article 35, Offenses Against the Public Peace.

(11)      Article 36A, Riots and Civil Disorders.

(12)      Article 39, Protection of Minors.

(13)      Article 40, Protection of the Family.

(14)      Article 59, Public Intoxication.

(15)      Article 60, Computer‑Related Crime.

(4)(16) Driving while impaired in violation of G.S. 20‑138.1 through G.S. 20‑138.5.

A provider may be excluded from enrollment for a period of two years from the date the provider, or owner, operator, or managing employee of that provider, was fully discharged from all imprisonment, probation, parole, and full payment of restitution for a conviction under this subsection.

(g)        Following any period of exclusion under this section, applicants shall be subject to review by the Committee.

SECTION 3.(b)  Chapter 108C of the General Statutes is amended by adding a new section to read:

§ 108C‑4.1.  Grounds for adverse termination.

(a)        The Department may deny enrollment of, deny revalidation of, or terminate a provider's participation in the Medicaid program for any of the following reasons:

(1)        Submitting a claim, or claims, for services that could not have been, and were not, furnished to a specific individual on the date of service.

(2)        Billing for services furnished while the provider's license is in a state of suspension.

(3)        Engaging in a pattern of practice of prescribing drugs that is abusive or represents a threat to the health and safety of beneficiaries or that fails to meet Medicaid requirements.

(4)        Certifying false or misleading information on the provider's enrollment application as true.

(5)        Falsifying medical records to support services billed to Medicaid.

(6)        Failure to repay a final overpayment in delinquent status exceeding one thousand five hundred dollars ($1,500).

(7)        Conduct that poses a risk to beneficiaries or the Medicaid program as demonstrated by a pattern of behavior or other credible evidence indicating program integrity or safety concerns.

(8)        For Medicaid providers that are subject to electronic visit verification requirements, failure to submit at least eighty‑five percent (85%) of claims for applicable services electronically.

(9)        Any other reason allowable under State or federal law, rule, or regulation.

(b)        The Department may exercise its authority under this section regardless of whether the provider maintains a current, active license, certification, or other provider credential.

SECTION 3.(c)  Subsection (a) of this section is effective when it becomes law and applies to provider enrollment and revalidation occurring on or after that date. Subsection (b) of this section is effective 30 days after it becomes law.

SECTION 4.  The Department of Health and Human Services, Division of Health Benefits, shall ensure the Medicaid provider administrative participation agreement includes all of the following:

(1)        A requirement that the provider identify its electronic health record system vendor.

(2)        A requirement that the provider notify the Division of Health Benefits of any changes to its electronic health record system vendor.

(3)        A requirement that every user of the provider's electronic health record system utilize a unique login to that system.

(4)        A requirement that the provider notify the Division of Health Benefits when that provider becomes aware that any individual employed by the provider is newly convicted of any criminal offense identified under G.S. 108C‑4. This requirement applies to both current employees and any individual employed by the provider within the preceding 12 months from the date of the new conviction.

SECTION 5.(a)  G.S. 108D‑22, as amended by Section 3C.12(a) of S.L. 2026‑1, reads as rewritten:

§ 108D‑22.  PHP provider networks.

(a)        Provider Networks. – Except as provided in G.S. 108D‑23(c) subsection (e) of this section, G.S. 108D‑23(c), and G.S. 108D‑24(b), each PHP shall develop and maintain an open network of providers that meets access to care requirements for its enrollees.

…

(d)       Closed Networks for Designated Service Categories. – If an open network for a designated service category would jeopardize quality of care, program integrity, or cost‑effective use of Medicaid funds, then, notwithstanding subsection (a) of this section, a PHP may develop a closed network for that designated service category and exclude providers that are not designated essential providers from that closed network. Prior to creating a closed network for a designated service category, the PHP must receive approval from the Department of the PHP's written request to close its provider network for that service category. This written request must include a demonstration of ongoing network adequacy. If the Department does not respond to a written request from a PHP for approval to close its provider network for a designated service category within 180 days after the request was submitted, the request is deemed approved.

(e)        Mandatory Closed Networks. – Each PHP shall develop and maintain a closed network, and may exclude providers from that closed network, for the provision of the following services:

(1)        Peer support services.

(2)        Research‑based behavioral health treatment services.

SECTION 5.(b)  G.S. 108D‑24, as amended by Section 3C.12(c) of S.L. 2026‑1, reads as rewritten:

§ 108D‑24.  Children and families specialty plan networks.

(a)        The entity operating the children and families specialty plan shall operate provider networks in accordance with this section and G.S. 108D‑22.

(b)        The In addition to the closed networks required under G.S. 108D‑22, the entity operating the children and families specialty plan shall develop a closed network, and may exclude providers from that closed network, for the provision of the following services:

(1)        Intensive in‑home services.

(2)        Multisystemic therapy.

(3)        Residential treatment services.

(4)        Services provided in psychiatric residential treatment facilities.

(5)        Community support team services.

(d)       In addition to the requirement to cover essential providers under G.S. 108D‑22, the entity operating the CAF specialty plan shall not exclude federally recognized tribal providers or Indian Health Service providers from any provider network.

SECTION 6.(a)  G.S. 108A‑54.3A(a) is amended by adding a new subdivision to read:

(25)    Qualifying lawfully present individuals allowed under section 214 of the Children's Health Insurance Program Reauthorization Act of 2009, P.L. 111‑3, and described in 42 U.S.C. § 1396b(v)(4).

SECTION 6.(b)  G.S. 108A‑54.3A(c), as amended by Section 3C.4(b) of S.L. 2026‑1, reads as rewritten:

(c)      Medicaid coverage for individuals who are not citizens of the United States shall be limited to coverage that is federally required for the State's participation in the Medicaid program.program, except as provided for under subdivision (25) of subsection (a) of this section.

SECTION 6.(c)  This section is effective October 1, 2026.

SECTION 7.  Except as otherwise provided, this act is effective when it becomes law.