A BILL TO BE ENTITLED
AN ACT to provide that the teachers' and state employees' comprehensive major medical plan provides benefits on a calendar year basis, to provide for an alternative benefit design for office visits under the plan, and to make conforming changes to deductibles and aggregate maximums.
The General Assembly of North Carolina enacts:
SECTION 1.(a)  G.S. 135‑40.1(7b) reads as rewritten:
"(7b)	Fiscal Year. – The period beginning January 1 and ending December 31."
SECTION 1.(b)  Effective January 1, 2003, G.S. 135‑40.1(2) reads as rewritten:
"(2)	Deductible. – Deductible shall mean an amount of covered expenses during a fiscal year which must be incurred after which benefits (subject to the deductible) becomes payable. The deductible for an employee, retired employee and/or his or her dependents shall be three hundred seventy-five dollars ($375.00) for each fiscal year, unless the employee or retired employee chooses the alternative benefit design option available under G.S. 40.4(a1), in which case the individual and aggregate deductibles and 80%/20% coinsurance amounts under that subsection apply.
The deductible applies separately to each covered individual in each fiscal year, subject to an aggregate maximum of one thousand one hundred twenty-five dollars ($1,125) per employee and child(ren) or employee and family coverage contract in any fiscal year. 
If two or more family members are injured in the same accident only one deductible is required for charges related to that accident during the benefit period."
SECTION 1.(c)  Effective January 1, 2003, the first paragraph of G.S. 135‑40.6 reads as rewritten:
"The benefits provided in this section are subject to a deductible of three hundred seventy-five dollars ($375.00) per covered individual to an aggregate maximum of  one thousand one hundred twenty-five dollars ($1,125) per employee and child(ren) or employee and family coverage contract per fiscal year and are payable on the basis of eighty percent (80%) by the Plan and twenty percent (20%) by the covered individual up to a maximum of one thousand six hundred dollars ($1,600) out‑of‑pocket per fiscal year. The aggregate maximum out‑of‑pocket required of individuals covered by this section shall not be more than four thousand eight hundred dollars ($4,800) per employee and child(ren) or employee and family coverage contract per fiscal year. The provisions of this section apply unless the employee chooses the alternative benefit design available under G.S. 40.4(a1), in which case the individual and aggregate deductibles and 80%/20% coinsurance amounts under that subsection apply."
SECTION 1.(d)  Effective January 1, 2003, G.S. 135‑40.8(a) reads as rewritten:
"(a)	For the balance of any fiscal year after each eligible employee, retired employee, or dependent satisfies the cash deductible, the Plan pays eighty percent (80%) of the eligible expenses outlined in G.S. 135‑40.6. The remaining twenty percent (20%) is paid by the covered individual until one thousand six hundred dollars ($1,600) per covered individual up to an aggregate of four thousand eight hundred dollars ($4,800) per employee and child(ren) or employee and family coverage contract per fiscal year in excess of the deductible has been paid out of pocket. The Plan then pays one hundred percent (100%) of the remaining covered expenses."
SECTION 1.(e)  Effective for the period commencing July 1, 2002, and ending December 31, 2002, the deductibles and aggregate maximums applicable under Article 3 of Chapter 135 of the General Statutes are as follows:
(1)	Notwithstanding G.S. 135‑40.1(2), 135‑40.4(a), and 135‑40.6, the deductible per covered individual shall be two hundred dollars ($200.00) to an aggregate maximum of six hundred dollars ($600.00) per employee and child(ren) or employee and family coverage. 
(2)	Notwithstanding G.S. 135‑40.8, the maximum out‑of‑pocket expenditure per covered individual is eight hundred dollars ($800.00) to an aggregate of two thousand four hundred dollars ($2,400) per employee and child(ren) or employee and family coverage contract in excess of the deductible.
(3)	Notwithstanding G.S. 135‑40.5(g), Plan members shall not be assessed more than one thousand three hundred fifty dollars ($1,350) per person in co‑payments for outpatient prescription drugs.
(4)	Notwithstanding G.S. 135‑40.6(8)n., maximum benefits for chiropractic X rays, manipulations, and modalities shall be one thousand fifty dollars ($1,050). 
(5)	Notwithstanding G.S. 135‑40.5(e) for routine diagnostic examinations, the maximum amount payable under G.S. 135‑40.5(e) is eighty dollars ($80.00).
(6)	Notwithstanding G.S. 135‑40.6(8)p., charges for outpatient diabetes self‑care programs shall not exceed one hundred sixty dollars ($160.00). 
(7)	Notwithstanding G.S. 135‑40.7B(d), chemical dependency and mental health benefits subject to G.S. 135‑40.7B are subject to precertification of outpatient visits beyond 14 visits. 
SECTION 2.(a)  Effective January 1, 2003, G.S. 135‑40.4(a) reads as rewritten:
"(a)	In the event a covered person, as a result of accidental bodily injury, disease or pregnancy, incurs covered expenses, the Plan will pay benefits up to the amounts described in G.S. 135‑40.5 through G.S. 135‑40.9.
The Plan is divided into two parts. The first part includes certain benefits which are not subject to a deductible or coinsurance. The second part is a comprehensive plan and includes those benefits which are subject to both a  three hundred seventy-five dollar ($375.00) deductible for each covered individual to an aggregate maximum of one thousand one hundred twenty-five dollars ($1,125) per employee and child(ren) or employee and family coverage contract and coinsurance of 80%/20%. There is a limit on out‑of‑pocket expenses under the second part.
Notwithstanding the provisions of this Article, the Executive Administrator and Board of Trustees of the Teachers' and State Employees' Comprehensive Major Medical Plan may contract with providers of institutional and professional medical care and services to established preferred provider networks. The terms pertaining to reimbursement rates or other terms of consideration of any contract between hospitals, hospital authorities, doctors or other medical providers, or a pharmacy benefit manager and the Plan shall not be a public record under Chapter 132 of the General Statutes for a period of thirty months after the date of the expiration of the contract. Provided, however, nothing in this subsection shall be deemed to prevent or restrict the release of any information made not a public record under this subsection to the State Auditor, the Attorney General, the Director of the State Budget, the Plan's Executive Administrator, and the Committee on Employee Hospital and Medical Benefits solely and exclusively for their use in the furtherance of their duties and responsibilities. The design, adoption, and implementation of the preferred provider contracts and networks are not subject to the requirements of Chapter 143 of the General Statutes, provided that for any hospital preferred provider network all hospitals will have an opportunity to contract with the Plan if they meet the contract requirements. The Executive Administrator and Board of Trustees shall, under the provisions of G.S. 135‑39.5(12), pursue such preferred provider contracts on a timely basis and shall make reports as requested to the President of the Senate, the President Pro Tempore of the Senate, the Speaker of the House of Representatives, and the Committee on Employee Hospital and Medical Benefits on its progress in negotiating the preferred provider contracts. The Executive Administrator and Board of Trustees shall implement a refined diagnostic‑related grouping or diagnostic‑related grouping‑based reimbursement system for hospitals as soon as practicable, but no later than January 1, 1995."
SECTION 2.(b)  Effective January 1, 2003, G.S. 135‑40.4 is amended by adding the following new subsection to read:
"(a1)	As an alternative to the individual and aggregate deductibles and 80%/20% coinsurance provided under the second part of the Plan as described in subsection (a) of this section, an employee may choose an alternative benefit design for himself or herself and his or her enrolled spouse and dependent children, as follows:
(1)	An individual and aggregate deductible and 80%/20% coinsurance shall not apply to the services covered under G.S. 135-40.8(c3); and
(2)	Coverage is not provided for the first twenty-five dollars ($25.00) of allowable charges for the services covered under G.S. 135-40.8(c3); and 
(3)	An annual deductible of four hundred twenty-five dollars ($425.00) shall apply to all services covered by the Plan except those provided under G.S. 135-40.8(c3) to an aggregate maximum of one thousand two hundred seventy-five dollars ($1,275) per employee and child(ren) or employee and family coverage contract per fiscal year; and
(4)	Coinsurance of 80%/20% shall apply to all services covered by the Plan except those provided under G.S. 135-40.8(c3) to the aggregate maximum applicable under G.S. 135-40.8(a)."
SECTION 3.  This act becomes effective July 1, 2002.