AN ACT to allow medicaid prepaid health plans to operate a closed provider network for research‑based behavioral health treatment providers, to provide funding for the medicaid rebase, and to eliminate the statutory triggers for discontinuation of coverage for the medicaid expansion population.

Whereas, the State must periodically rebase Medicaid appropriations to reflect changes in enrollment, service utilization, capitation costs, federal match rates, and program design; and

Whereas, maintaining adequate Medicaid funding is necessary to preserve access to care for children, families, older adults, and people with disabilities across North Carolina; and

Whereas, research‑based behavioral health treatment should be delivered through provider arrangements that promote quality, accountability, and reliable patient access; and

Whereas, continuity of coverage is essential to the health and financial stability of North Carolinians enrolled in Medicaid expansion; and

Whereas, eliminating statutory coverage‑discontinuation triggers and providing sufficient program funding will strengthen the stability and effectiveness of North Carolina's Medicaid program; Now, therefore,

The General Assembly of North Carolina enacts:

MEDICAID REBASE FUNDING

SECTION 1.(a)  There is appropriated from the General Fund to the Department of Health and Human Services, Division of Health Benefits, the sum of three hundred nineteen million dollars ($319,000,000) in recurring funds and associated receipts, beginning with the 2025‑2026 fiscal year, and an additional sum of seven hundred twenty‑eight million dollars ($728,000,000) in recurring funds and associated receipts, beginning with the 2026‑2027 fiscal year. These funds shall be used to adjust Medicaid funding to account for projected changes in enrollment, enrollment mix, service and capitation costs, and federal match rates, as well as the implementation of the Children and Families Specialty Plan in December 2025.

SECTION 1.(b)  This section is retroactively effective July 1, 2025.

CLOSED PROVIDER NETWORK FOR RESEARCH‑BASED BEHAVIORAL HEALTH TREATMENT PROVIDERS

SECTION 2.(a)  G.S. 108D‑22 reads as rewritten:

§ 108D‑22.  PHP provider networks.

(a)        Except as provided in G.S. 108D‑23 and G.S. 108D‑24, each PHP shall develop and maintain a provider network that meets access to care requirements for its enrollees. A PHP may not exclude providers a provider from their networks the PHP's network except for failure (i) if the provider fails to meet objective quality standards standards, or refusal (ii) if the provider refuses to accept network rates. rates, or (iii) in accordance with subsection (c) of this section. Notwithstanding the previous sentence, a PHP must include all providers in its geographical coverage area that are designated essential providers by the Department in accordance with subdivision (b) of this section, unless the Department approves an alternative arrangement for securing the types of services offered by the essential providers.

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(c)        Each PHP shall develop and maintain a closed network of providers applicable only to the provision of research‑based behavioral health treatment services.

SECTION 2.(b)  G.S. 108D‑24 reads as rewritten:

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

(a)        The entity operating the children and families specialty plan shall develop and maintain a closed network of providers only as provided in this section.

(b)        The requirement to operate a closed network is applicable only to 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)        Research‑based behavioral health treatment services.

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SECTION 2.(c)  G.S. 108D‑35 reads as rewritten:

§ 108D‑35.  Services covered by PHPs.

(a)        Capitated PHP contracts shall cover all Medicaid services, including physical health services, prescription drugs, long‑term services and supports, and behavioral health services, except as otherwise provided in this section.

(b)        The capitated contracts required by this section shall not cover any of the following:

(1)        Medicaid services covered by the local management entities/managed care organizations (LME/MCOs) under the combined 1915(b) and (c) waivers, 1915(b)(3) services, and any services approved under the 1915(i) option shall not be covered under a standard benefit plan, except that all capitated PHP contracts shall cover the following services:

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l.          Research‑based intensive behavioral health treatment.

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ELIMINATION OF STATUTORY TRIGGERS FOR DISCONTINUATION OF COVERAGE FOR THE MEDICAID EXPANSION POPULATION

SECTION 3.(a)  G.S. 108A‑54.3B is repealed.

SECTION 3.(b)  G.S. 108A‑54.3C is repealed.

EFFECTIVE DATE

SECTION 4.  Except as otherwise provided, this act is effective when it becomes law.