North Carolina SB 978: Healthcare Competition Reforms.

Bill Text

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 2
SENATE BILL 978
Health Care Committee Substitute Adopted 6/11/26

Short Title: Healthcare Competition Reforms. (Public)
Sponsors:
Referred to:
May 4, 2026
*S978-v-2*
A BILL TO BE ENTITLED 1
AN ACT TO PROVIDE WHISTLEBLOWER AND EMPLOYMENT PROTECTION TO 2
HEALTHCARE WORKERS, TO LIMIT THE CHIEF EXECUTIVE OFFICER 3
COMPENSATION OF NOT-FOR-PROFIT HOSPITALS THAT RECEIVE STATE 4
FUNDS, AND TO EXEMPT THE DEPARTMENT OF STATE TREASURER FROM 5
DEPARTMENT OF HEALTH AND HUMAN SERVICES REVIEW. 6
The General Assembly of North Carolina enacts: 7
8
PART I. WHISTLEBLOWER AND EMPLOYMENT PROTECTIONS FOR 9
HEALTHCARE PROFESSIONALS 10
SECTION 1.1. G.S. 75-1.1 is amended by adding a new subsection to read: 11
"(c1) The learned profession exception of this section applies to health care providers, as 12
defined in G.S. 90-21.11, only for acts and omissions directly related to the provision of medical, 13
dental, or other health care that are subject to litigation under Article 1B of Chapter 90 of the 14
General Statutes." 15
SECTION 1.2.(a) Article 3 of Chapter 95 of the General Statutes is amended by 16
adding a new section to read: 17
"§ 95-28.1B. Health care professional whistleblower protection. 18
(a) The following definitions apply in this section: 19
(1) Health care professional. – An individual who is a licensed physician, 20
physician assistant, advanced practice registered nurse as defined by the North 21
Carolina Board of Nursing, or registered nurse. 22
(2) Hospital. – Any of the following: 23
a. A facility that has an organized medical staff and is designed, used, 24
and operated to provide health care, diagnostic and therapeutic 25
services, and continuous nursing care primarily to inpatients where 26
such care and services are rendered under the supervision and direction 27
of physicians licensed under Article 1 of Chapter 90 of the General 28
Statutes, to two or more persons over a period in excess of 24 hours. 29
b. A facility designated by the Centers for Medicare and Medicaid 30
Services as a rural emergency hospital as defined under 42 C.F.R. § 31
485.502 or under section 125 of Division CC of the Consolidated 32
Appropriations Act of 2021, Public Law 116-260. 33
c. Any outpatient department, including a portion of a hospital operated 34
as an outpatient department, on or off of the hospital's main campus, 35
that is operated under the hospital's control or ownership and is 36

General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 978-Second Edition
classified as a Business Occupancy by the Life Safety Code of the 1
National Fire Protection Association as referenced under 42 C.F.R. § 2
482.41. 3
d. Any hospital-owned medical practice. 4
(3) Medical staff bylaws. – A document that is required by a licensing, 5
accrediting, or regulatory body that governs the organization and operation of 6
a hospital's medical staff by defining the structure, roles, responsibilities, and 7
relationships between the medical staff, stakeholders, hospital administration, 8
and hospital governing board. 9
(4) Stakeholder. – An incorporator, officer, director, shareholder, or employee of 10
a (i) professional corporation as defined by G.S. 55B-2 or (ii) domestic or 11
foreign entity that provides nonclinical services to a professional corporation 12
as defined by G.S. 55B-2 rendering professional service under Article 1 of 13
Chapter 90 of the General Statutes. 14
(b) It is the policy of this State that health care professionals have the right to report 15
violations of medical staff bylaws to appropriate authorities and make comments concerning 16
patient care for the protection of the public. Therefore, no person, firm, corporation, or 17
unincorporated association, or a stakeholder, may subject a health care professional to adverse 18
action, including, but not limited to, withdrawal of hospital privileges, termination, demotion, 19
compensation reduction, or hostile work environment for reporting a violation of medical staff 20
bylaws or making comments concerning patient care." 21
SECTION 1.2.(b) G.S. 95-241(a)(1) reads as rewritten: 22
"(a) No person shall discriminate or take any retaliatory action against an employee 23
because the employee in good faith does or threatens to do any of the following: 24
(1) File a claim or complaint, initiate any inquiry, investigation, inspection, 25
proceeding or other action, or testify or provide information to any person 26
with respect to any of the following: 27
... 28
f. G.S. 95-28.1A.G.S. 95-28.1A or G.S. 95-28.1B. 29
...." 30
SECTION 1.2.(c) The North Carolina Board of Medicine may adopt rules to 31
implement this section. 32
SECTION 1.2.(d) This section is effective when it becomes law and applies to 33
employers, employees, and prospective employees on or after that date. 34
SECTION 1.3.(a) Chapter 66 of the General Statutes is amended by adding a new 35
Article to read: 36
"Article 52. 37
"Limitations on Agreements Wi