GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 2
SENATE BILL 600
Health Care Committee Substitute Adopted 4/16/25
Short Title: Medicaid Agency Omnibus. (Public)
Sponsors:
Referred to:
March 26, 2025
*S600 -v-2*
A BILL TO BE ENTITLED 1
AN ACT MAKING TECHNI CAL, CONFORMING, AND OTHER MODIFICATIONS TO 2
LAWS PERTAINING TO THE DEPARTMENT OF HEA LTH AND HUMAN SERVIC ES, 3
DIVISION OF HEALTH BENEFITS. 4
The General Assembly of North Carolina enacts: 5
6
TEMPORARILY EXTEND OPTION TO DECREASE MEDICAID ENROLLMENT 7
BURDEN ON COUNTY DEPARTMENTS OF SOCIAL SERVICES 8
SECTION 1. Section 1.8(a) of S.L. 2023-7, as amended by Section 9(a) of S.L. 9
2024-34, reads as rewritten: 10
"SECTION 1.8.(a) Notwithstanding G.S. 108A-54(d) and in accordance with 11
G.S. 143B-24(b), the Department of Health and Human Services (DHHS) is authorized, on a 12
temporary basis to conclude by June 30, 2025, 2028, to utilize the federally facilitated 13
marketplace (Marketplace), also known as the federal health benefit exchange, to make Medicaid 14
eligibility determinations. In accordance with G.S. 108A-54(b), G.S. 108A-54(f), these 15
eligibility determinations shall be in compliance with all eligibility categories, resource limits, 16
and income thresholds set by the General Assembly." 17
18
CLARIFY ENROLLMENT IN MEDICAID MANAGED CARE AFTER RELEASE 19
FROM INCARCERATION 20
SECTION 2.(a) G.S. 108D-40 reads as rewritten: 21
"§ 108D-40. Populations covered by PHPs. 22
(a) Capitated PHP contracts shall cover all Medicaid program aid categories except for 23
the following categories: 24
… 25
(9) Recipients who are inmates of prisons. Upon the recipient's release from 26
prison, the exception under this subdivision shall continue to apply for a 27
period that is the shorter of the following:until the first day of the month 28
following the twelfth month after the recipient's release. 29
a. The recipient's initial Medicaid eligibility certification period post 30
release. 31
b. Three hundred sixty-five days. 32
(9a) Recipients residing in carceral settings other than prisons and whose Medicaid 33
eligibility has been suspended. Upon the recipient's release from 34
incarceration, the exception under this subdivision shall continue to apply for 35 General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 600-Second Edition
a period that is the shorter of the following:until the first day of the month 1
following the twelfth month after the recipient's release. 2
a. The recipient's initial Medicaid eligibility certification period post 3
release. 4
b. Three hundred sixty-five days. 5
…." 6
SECTION 2.(b) This section is effective when it becomes law and applies to (i) 7
inmates released on or after that date and (ii) inmates released on or after January 1, 2025, who 8
are not enrolled with a PHP on the date this act becomes law. 9
10
CONFORM NORTH CAROLINA LAW T O FEDERAL REQUIREMENTS FOR 11
MEDICAID CATEGORICAL RISK LEVELS FOR PROVIDER SCREENINGS 12
SECTION 3.(a) G.S. 108C-3 reads as rewritten: 13
"§ 108C-3. Medicaid provider screening. 14
(a) Provider Screening. – The Department shall conduct provider screening of Medicaid 15
providers in accordance with applicable State or federal law or regulation. 16
(b) Enrollment Screening. – The Department must screen all initial provider applications 17
for enrollment in Medicaid, including applications for a new practice location, and all 18
revalidation requests based on Department the Department's assessment of risk and assignment 19
of the provider to a categorical risk level of "limited," "moderate," or "high." limited, moderate, 20
or high. If a provider could fit within more than one risk level described in this section, the highest 21
level of screening is applicable. 22
(c) Limited Categorical Risk Provider Types. – The All of the following provider types 23
are hereby designated as "limited" limited categorical risk: 24
… 25
(4) Health programs operated by an Indian Health Program (as Program, as 26
defined in section 4(12) of the Indian Health Care Improvement Act) Act, or 27
an urban Indian organization (as organization, as defined in section 4(29) of 28
the Indian Health Care Improvement Act) Act, that receives funding from the 29
Indian Health Service pursuant to Title V of the Indian Health Care 30
Improvement Act. 31
… 32
(10) Nursing facilities, including Intermediate Care Facilities for Individuals with 33
Intellectual Disabilities.Disabilities, that are not skilled nursing facilities. 34
(10a) Skilled nursing facilities that are limited categorical risk under subsection (k) 35
of this section. 36
… 37
(12) Physician or nonphysician practitioners (including practitioners, including 38
nurse practitioners, CRNAs, physician assistants, physician extenders, 39
occupational therapists, speech/language pathologists, chiropractors, and 40
audiologists), optometrists, audiologists; optometrists; dentists and 41
orthodontists, orthodontists; and medical groups or clinics. 42
… 43
(d) Limited Categorical Risk Screenings. – When the Department designates a provider 44
as a "limited" limited categorical level of risk, the Department shall conduct such the applicable 45
screening functions as required by federal law. 46
(e) Moderate Categorical Risk Provider Types. – The All of the following provider types 47
are hereby designated as "moderate" moderate categorical risk: 48
… 49
(8) Pharmacy Services. services. 50
… 51 General Assembly Of North Carolina Session 2025
Senate Bill 600-Second Edition Page 3
(11) Revalidating agencies providing durable medical equipment, including, but 1
not limited to, including orthotics and prosthetics. 2
… 3
(15) Skilled nursing facilities that are moderate categorical risk under subsection 4
(k) of this section. 5
(f) Moderate Categorical Risk Screenings. – When the Department designates a provider 6
as a "moderate"' moderate categorical level of risk, the Department shall conduct such the 7
applicable screening functions as required by federal law and regulation. 8
(g) High Categorical Risk Provider Types. – The All of the following provider types are 9
hereby designated as "high" high categorical risk: 10
(1) Prospective (newly enrolling) Prospective, or newly enrolling, adult care 11
homes delivering Medicaid-reimbursed services. 12
… 13
(4) Prospective (newly enrolling) Prospective, or newly enrolling, agencies 14
providing durable medical equipment, including, but not limited to, orthotics 15
and prosthetics. 16
… 17
(6) Prospective (newly enrolling) Prospective, or newly enrolling, agencies 18
providing nonbehavioral health home- or community-based services pursuant 19
to waivers authorized by the federal Centers for Medicare and Medicaid 20
Services under 42 U.S.C. § 1396n(c). 21
(7) Prospective (newly enrolling) Prospective, or newly enrolling, agencies 22
providing personal care services or in-home care services. 23
(8) Prospective (newly enrolling) Prospective, or newly enrolling, agencies 24
providing private duty nursing, home health, or home infusion. 25
(9) Providers against whom which the Department has imposed a payment 26
suspension based upon a credible allegation of fraud in accordance with 42 27
C.F.R. § 455.23 within the previous 12-month period. The Department shall 28
return the provider to its original risk category not later than 12 months after 29
the cessation of the payment suspension. 30
… 31
(11) Providers who that have incurred a Medicaid final overpayment, assessment, 32
or fine to the Department in excess of twenty percent (20%) of the provider's 33
payments received from Medicaid in the previous 12-month period. The 34
Department shall return the provider to its original risk category not later than 35
12 months after the completion of the provider's repayment of the final 36
overpayment, assessment, or fine. 37
… 38
(13) Skilled nursing facilities that are high categorical risk under subsection (k) of 39
this section. 40
(h) High Categorical Risk Screenings. – When the Department designates a provider as 41
a "high" high categorical level of risk, the Department shall conduct such the applicable screening 42
functions as required by federal law and regulation. 43
(i) Dually-Enrolled Providers. – For providers dually enrolled in the federal Medicare 44
program and Medicaid, the Department may rely on the results of the provider screening 45
performed by Medicare contractors. 46
(j) Out-of-State Providers. – For out-of-state providers, the Department may rely on the 47
results of the provider screening performed by the Medicaid agencies or Children's Health 48
Insurance Program agencies of other states. 49
(k) Skilled Nursing Facilities. – The categorical risk level for provider screening of 50
skilled nursing facilities is the categorical risk level required by federal law or regulation. If 51 General Assembly Of North Carolina Session 2025
Page 4 Senate Bill 600-Second Edition
federal law or regulation does not require a particular categorical risk level, skilled nursing 1
facilities are limited categorical risk." 2
SECTION 3.(b) G.S. 108C-3, as amended by Section 3(a) of this act, reads as 3
rewritten: 4
"§ 108C-3. Medicaid provider screening. 5
… 6
(c) Limited Categorical Risk Provider Types. – All of the following provider types are 7
designated as limited categorical risk: 8
(1) Ambulatory surgical centers. 9
(1a) Behavioral health and intellectual and developmental disability provider 10
agencies that are nationally accredited by an entity approved by the 11
Secretary.Secretary, unless they meet the description in subdivision (g)(15) of 12
this section. 13
… 14
(16) Portable X-ray suppliers. 15
… 16
(e) Moderate Categorical Risk Provider Types. – All of the following provider types are 17
designated as moderate categorical risk: 18
… 19
(5) Hospice organizations.Revalidating hospice organizations, unless they meet 20
the description in subdivisions (g)(14) and (g)(15) of this section. 21
… 22
(10) Revalidating adult care homes delivering Medicaid-reimbursed 23
services.services, unless they meet the description in subdivision (g)(15) of 24
this section. 25
(11) Revalidating agencies providing durable medical equipment, including 26
orthotics and prosthetics. prosthetics, unless they meet the description in 27
subdivision (g)(15) of this section. 28
(12) Revalidating agencies providing nonbehavioral health home- or 29
community-based services pursuant to waivers authorized by the federal 30
Centers for Medicare and Medicaid Services under 42 U.S.C. § 1396n(c).42 31
U.S.C. § 1396n(c), unless they meet the description in subdivision (g)(15) of 32
this section. 33
(13) Revalidating agencies providing private duty nursing, home health, personal 34
care services or in-home care services, or home infusion.infusion, unless they 35
meet the description in subdivision (g)(15) of this section. 36
… 37
(16) Portable X-ray suppliers. 38
… 39
(g) High Categorical Risk Provider Types. – All of the following provider types are 40
designated as high categorical risk: 41
… 42
(14) Prospective, or newly enrolling, hospice organizations and revalidating 43
hospice organizations undergoing a change in ownership. 44
(15) The following revalidating providers (i) that are revalidating for the first time 45
since newly enrolling and (ii) for which fingerprinting requirements, as a 46
newly enrolling provider, were waived due to a national, state, or local 47
emergency: 48
a. Opioid treatment programs that have not been fully and continuously 49
certified by the Substance Abuse and Mental Health Services 50
Administration since October 23, 2018. 51 General Assembly Of North Carolina Session 2025
Senate Bill 600-Second Edition Page 5
b. Agencies providing durable medical equipment, including orthotics 1
and prosthetics. 2
c. Adult care homes delivering Medicaid-reimbursed services. 3
d. Agencies providing private duty nursing, home health, personal care 4
services, or in-home care services, or home infusion. 5
e. Hospice organizations. 6
…." 7
SECTION 3.(c) Subsection (a) of this section is retroactively effective January 1, 8
2023. The remainder of this section is retroactively effective January 1, 2024. 9
10
CLARIFY MEDICAID SUBROGATION RIGHTS IN MANAGED CARE 11
ENVIRONMENT 12
SECTION 4.(a) G.S. 108A-57 reads as rewritten: 13
"§ 108A-57. Subrogation rights; withholding of information a misdemeanor. 14
(a) As used in this section, the term "beneficiary" means (i) the beneficiary of medical 15
assistance, including a minor beneficiary, (ii) the medical assistance beneficiary's parent, legal 16
guardian, or personal representative, (iii) the medical assistance beneficiary's heirs, and (iv) the 17
administrator or executor of the medical assistance beneficiary's estate. 18
Notwithstanding any other provisions of the law, to the extent of payments under this Part, 19
the State shall be subrogated to all rights of recovery, contractual or otherwise, of a beneficiary 20
against any person. Any claim brought by a medical assistance beneficiary against a third party 21
shall include a claim for all medical assistance payments for health care items or services 22
furnished to the medical assistance beneficiary as a result of the injury or action, hereinafter 23
referred to as the "Medicaid claim." Any claim brought by a medical assistance beneficiary 24
against a third party that does not state the Medicaid claim shall be deemed to include the 25
Medicaid claim. If the beneficiary has claims against more than one third party related to the 26
same injury, then any amount received in payment of the Medicaid claim related to that injury 27
shall reduce the total balance of the Medicaid claim applicable to subsequent recoveries related 28
to that injury. 29
The Department may designate one or more PHPs to receive all or a portion of payments due 30
under this section to the Department for the Medicaid claim by sending a notice of designation 31
to (i) the beneficiary who has the claim against the third party and (ii) any PHP designated in the 32
notice. As used in this section, the term "designated PHP" refers to a PHP designated in the notice 33
of designation under this subsection. 34
(a1) If the amount of the Medicaid claim does not exceed one-third of the medical 35
assistance beneficiary's gross recovery, it is presumed that the gross recovery includes 36
compensation for the full amount of the Medicaid claim. If the amount of the Medicaid claim 37
exceeds one-third of the medical assistance beneficiary's gross recovery, it is presumed that 38
one-third of the gross recovery represents compensation for the Medicaid claim. 39
(a2) A medical assistance beneficiary may dispute the presumptions established in 40
subsection (a1) of this section by applying to the court in which the medical assistance 41
beneficiary's claim against the third party is pending, or if there is none, then to a court of 42
competent jurisdiction in this State, for a determination of the portion of the beneficiary's gross 43
recovery that represents compensation for the Medicaid claim. An application under this 44
subsection shall be filed with the court and served on the Department pursuant to the Rules of 45
Civil Procedure no later than 30 days after the date that the settlement agreement is executed by 46
all parties and, if required, approved by the court, or in cases in which judgment has been entered, 47
no later than 30 days after the date of entry of judgment. If a PHP made payments on behalf of a 48
Medicaid beneficiary that are included in the Medicaid claim, then the application shall also be 49
served on that PHP within the same time frame in which service is required on the Department. 50 General Assembly Of North Carolina Session 2025
Page 6 Senate Bill 600-Second Edition
The court shall hold an evidentiary hearing no sooner than 60 days after the date the action was 1
filed. All of the following shall apply to the court's determination under this subsection: 2
(1) The medical assistance beneficiary has the burden of proving by clear and 3
convincing evidence that the portion of the beneficiary's gross recovery that 4
represents compensation for the Medicaid claim is less than the portion 5
presumed under subsection (a1) of this section. 6
(2) The presumption arising under subsection (a1) of this section is not rebutted 7
solely by the fact that the medical assistance beneficiary was not able to 8
recover the full amount of all claims. 9
(3) If the beneficiary meets its burden of rebutting the presumption arising under 10
subsection (a1) of this section, then the court shall determine the portion of 11
the recovery that represents compensation for the Medicaid claim and shall 12
order the beneficiary to pay the amount so determined to the Department 13
Department, or designated PHP, in accordance with subsection (a5) of this 14
section. In making this determination, the court may consider any factors that 15
it deems just and reasonable. 16
(4) If the beneficiary fails to rebut the presumption arising under subsection (a1) 17
of this section, then the court shall order the beneficiary to pay the amount 18
presumed pursuant to subsection (a1) of this section to the Department 19
Department, or designated PHP, in accordance with subsection (a5) of this 20
section. 21
(a3) Notwithstanding the presumption arising pursuant to subsection (a1) of this section, 22
the medical assistance beneficiary and the Department may reach an agreement on the portion of 23
the recovery that represents compensation for the Medicaid claim. If such an agreement is 24
reached after an application has been filed pursuant to subsection (a2) of this section, a stipulation 25
of dismissal of the application signed by both parties shall be filed with the court. 26
(a4) Within 30 days of receipt of the proceeds of a settlement or judgment related to a 27
claim described in subsection (a) of this section, the medical assistance beneficiary or any 28
attorney retained by the beneficiary shall notify the Department Department, and any designated 29
PHP, of the receipt of the proceeds. 30
(a5) The medical assistance beneficiary or any attorney retained by the beneficiary shall, 31
out of the proceeds obtained by or on behalf of the beneficiary by settlement with, judgment 32
against, or otherwise from a third party by reason of injury or death, distribute to the Department 33
Department, or designated PHP, the amount due pursuant to this section as follows: 34
(1) If, upon the expiration of the time for filing an application pursuant subsection 35
(a2) of this section, no application has been filed, then the amount presumed 36
pursuant to subsection (a1) of this section, as prorated with the claims of all 37
others having medical subrogation rights or medical liens against the amount 38
received or recovered, shall be paid to the Department Department, or 39
designated PHP, within 30 days of the beneficiary's receipt of the proceeds, in 40
the absence of an agreement pursuant to subsection (a3) of this section. 41
(2) If an application has been filed pursuant to subsection (a2) of this section and 42
no agreement has been reached pursuant to subsection (a3) of this section, 43
then the Department Department, or designated PHP, shall be paid as follows: 44
a. If the beneficiary rebuts the presumption arising under subsection (a1) 45
of this section, then the amount determined by the court pursuant to 46
subsection (a2) of this section, as prorated with the claims of all others 47
having medical subrogation rights or medical liens against the amount 48
received or recovered, shall be paid to the Department Department, or 49
designated PHP, within 30 days of the entry of the court's order. 50 General Assembly Of North Carolina Session 2025
Senate Bill 600-Second Edition Page 7
b. If the beneficiary fails to rebut the presumption arising under 1
subsection (a1) of this section, then the amount presumed pursuant to 2
subsection (a1) of this section, as prorated with the claims of all others 3
having medical subrogation rights or medical liens against the amount 4
received or recovered, shall be paid to the Department Department, or 5
designated PHP, within 30 days of the entry of the court's order. 6
(3) If an agreement has been reached pursuant to subsection (a3) of this section, 7
then the agreed amount, as prorated with the claims of all others having 8
medical subrogation rights or medical liens against the amount received or 9
recovered, shall be paid to the Department Department, or designated PHP, 10
within 30 days of the execution of the agreement by the medical assistance 11
beneficiary and the Department. 12
(a6) The United States and the State of North Carolina shall be entitled to shares in each 13
net recovery by the Department under this section. Their shares shall be promptly paid under this 14
section and their proportionate parts of such sum shall be determined in accordance with the 15
matching formulas in use during the period for which assistance was paid to the recipient. 16
(b) It is a Class 1 misdemeanor for any person seeking or having obtained assistance 17
under this Part for himself or another to willfully fail to disclose to the county department of 18
social services or its attorney and to the Department the identity of any person or organization 19
against whom the recipient of assistance has a right of recovery, contractual or otherwise. 20
(c) (For contingent repeal, see note) This section applies to the administration of and 21
claims payments under the NC Health Choice Program established under Part 8 of this Article. 22
(d) As required to ensure compliance with this section, the Department may apply to the 23
court in which the medical assistance beneficiary's claim against the third party is pending, or if 24
there is none, then to a court of competent jurisdiction in this State for enforcement of this 25
section." 26
SECTION 4.(b) This section is effective when it becomes law and applies to 27
Medicaid claims brought by medical assistance beneficiaries against third parties on or after that 28
date. 29
30
EFFECTIVE DATE 31
SECTION 5. Except as otherwise provided, this act is effective when it becomes 32
law. 33