HB 372 - Medicaid and NC Health Choice Transformation

• Creates a new Division of Health Benefits within the Department of Health and Human Services to manage transformed Medicaid and NC Health Choice programs with focus on budget predictability, quality care, and cost efficiency.

• Establishes capitated payment contracts with Prepaid Health Plans (PHPs) including three statewide contracts and up to 10 regional contracts led by providers, with all services except dental and (for four years) behavioral health for Medicaid recipients included in capitated coverage.

• Sets performance requirements including actuarially sound capitation rates, minimum medical loss ratio of 88%, risk-adjusted cost growth at least 2% below national Medicaid spending, and defined quality, access, and outcome measures with penalties for non-performance.

• Creates Joint Legislative Oversight Committee on Medicaid and NC Health Choice with 14 members (7 Senate, 7 House) to monitor transformation implementation, review waivers, and receive quarterly reports on enrollment, spending, and program performance.

• Establishes timeline requiring waiver submission to federal government by June 1, 2016, with capitated contracts beginning 18 months after federal approval; eliminates Division of Medical Assistance 12 months after contracts begin.