North Carolina SB 405: Healthcare Investment Act.

Bill Text

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 3
SENATE BILL 405
Health Care Committee Substitute Adopted 4/16/25
House Committee Substitute Favorable 10/22/25

Short Title: Healthcare Investment Act. (Public)
Sponsors:
Referred to:
March 25, 2025
*S405-v-3*
A BILL TO BE ENTITLED 1
AN ACT TO ADJUST MEDICAID FUNDING TO ACCOUNT FOR PROJECTED CHANGES 2
AND MAKE OTHER REVISIONS TO LAWS GOVERNING THE DEPARTMENT OF 3
HEALTH AND HUMAN SERVICES AND TO REDUCE FUNDING APPROPRIATED 4
TO THE FUTURE BUILDING RESERVES AND THE STATE CAPITAL AND 5
INFRASTRUCTURE FUND. 6
The General Assembly of North Carolina enacts: 7
8
PART I. MEDICAID REBASE AND OTHER DEPARTMENT OF HEALTH AND 9
HUMAN SERVICES REVISIONS 10
11
MEDICAID REBASE AND MANAGED CARE ADMINISTRATION 12
SECTION 1.1. Section 2B.10 of S.L. 2025-89 reads as rewritten: 13
"SECTION 2B.10. SECTION 2B.10.(a) There is appropriated from the General Fund to 14
the Department of Health and Human Services, Division of Health Benefits, the sum of six 15
hundred million dollars ($600,000,000) six hundred ninety million dollars ($690,000,000) in 16
recurring funds and associated receipts for each year of the 2025-2027 fiscal biennium. receipts, 17
beginning with the 2025-2026 fiscal year. These funds shall be used to adjust Medicaid funding 18
to account for projected changes in enrollment, enrollment mix, service and capitation costs, and 19
federal match rates, as well as the implementation of the Children and Families Specialty Plan in 20
December 2025 or for contracts needed to operate the State's Medicaid managed care 21
program.2025. 22
"SECTION 2B.10.(b) There is appropriated from the General Fund to the Department of 23
Health and Human Services, Division of Health Benefits, the sum of forty-nine million two 24
hundred thousand dollars ($49,200,000) in recurring funds and associated receipts, beginning 25
with the 2025-2026 fiscal year. There is appropriated from the ARPA Temporary Savings Fund 26
to the Department of Health and Human Services, Division of Health Benefits, the sum of 27
thirty-four million four hundred thousand dollars ($34,400,000) in nonrecurring funds and 28
associated receipts for the 2025-2026 fiscal year. These funds shall be used for contracts needed 29
to operate the State's Medicaid managed care program." 30
31
LME/MCO INTERGOVERNMENTAL TRANSFERS 32
SECTION 1.2.(a) The local management entities/managed care organizations 33
(LME/MCOs) shall make intergovernmental transfers to the Department of Health and Human 34
Services, Division of Health Benefits (DHB), in an aggregate amount of eighteen million 35

General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 405-Third Edition
twenty-eight thousand two hundred seventeen dollars ($18,028,217) in the 2025-2026 fiscal year 1
and in an aggregate amount of eighteen million twenty-eight thousand two hundred seventeen 2
dollars ($18,028,217) for the 2026-2027 fiscal year. The due date and frequency of the 3
intergovernmental transfer required by this section shall be determined by DHB. The amount of 4
the intergovernmental transfer that each individual LME/MCO is required to make in each fiscal 5
year shall be as follows: 6
2025-2026 2026-2027 7
Alliance Behavioral Healthcare $4,508,857 $4,508,857 8
Partners Health Management $3,544,348 $3,544,348 9
Trillium Health Resources $6,448,693 $6,448,693 10
Vaya Health $3,526,319 $3,526,319 11
SECTION 1.2.(b) In the event that a county disengages from an LME/MCO and 12
realigns with another LME/MCO during the 2025-2027 fiscal biennium, DHB shall have the 13
authority to reallocate the amount of the intergovernmental transfer that each affected 14
LME/MCO is required to make under subsection (a) of this section, taking into consideration the 15
change in catchment area and covered population, provided that the aggregate amount of the 16
transfers received from all LME/MCOs in each year of the fiscal biennium is achieved. 17
18
SINGLE-STREAM FUNDING REDUCTION 19
SECTION 1.3. Section 2B.5 of S.L. 2025-89 reads as rewritten: 20
"SECTION 2B.5.(a) The funds appropriated for each year of the 2025-2027 fiscal biennium 21
to the Department of Health and Human Services, Division of Mental Health, Developmental 22
Disabilities, and Substance Use Services (DMH/DD/SUS), for single-stream funding shall be 23
reduced by eighteen million five hundred sixty-two thousand six hundred forty-five dollars 24
($18,562,645) thirty million dollars ($30,000,000) in recurring funds.funds, beginning with the 25
2025-2026 fiscal year. 26
"SECTION 2B.5.(b) During each year of the 2025-2027 fiscal biennium, each LME/MCO 27
shall offer at least the same level of service utilization as during the 2024-2025 fiscal year across 28
the LME/MCO's catchment area. This requirement shall not be construed to require LME/MCOs 29
to authorize or maintain the same level of services for any specific individual whose services 30
were paid for with single-stream funding. Further, this requirement