A BILL TO BE ENTITLED
AN ACT TO TRANSFER THE RESPONSIBILITY FOR ADMINISTERING THE NORTH CAROLINA STATE HEALTH PLAN FOR TEACHERS AND STATE EMPLOYEES TO THE office of state budget and management.
The General Assembly of North Carolina enacts:
SECTION 1.  The administration and management of the North Carolina State Health Plan for Teachers and State Employees is transferred to the Office of State Budget and Management by a Type 1 transfer as defined in G.S. 143A‑6.
SECTION 1.(b)  G.S. 135‑43.1 and G.S. 135‑43.2 are repealed.
SECTION 1.(c)  G.S. 135‑43.3 reads as rewritten:
"§ 135‑43.3.  Oversight team.
(a)	The Director of the Budget may use employees of the Office of State Budget and Management to monitor the Executive Administrator and Board of Trustees, the Claims Processor, and the State Health Plan for Teachers and State Employees. Employees authorized by the Director of the Budget to provide assistance to the  Director of the Budget shall comprise an oversight team.
(b)	The oversight team shall, jointly or individually, have access to all records of the Board of Trustees, the Executive Administrator, the Claims Processor, and the Plan. The oversight team shall, jointly or individually, be entitled to attend all meetings of the Board of Trustees.
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SECTION 1.(d)  G.S. 135‑43(a) reads as rewritten:
"§ 135‑43.  Confidentiality of information and medical records; provider contracts.
(a)	Any information as herein described in this section which is in the possession of the Executive Administrator and the Board of Trustees of the State Health Plan for Teachers and State Employees or its Claims Processor under the Plan or the Predecessor Plan shall be confidential and shall be exempt from the provisions of Chapter 132 of the General Statutes or any other provision requiring information and records held by State agencies to be made public or accessible to the public. This section shall apply to all information concerning individuals, including the fact of coverage or noncoverage, whether or not a claim has been filed, medical information, whether or not a claim has been paid, and any other information or materials concerning a plan participant. Provided, however, such information may be released to the Office of State Budget and Management, the State Auditor, or to the Attorney General, or to the persons designated under G.S. 135‑43.3 in furtherance of their statutory duties and responsibilities, or to such persons or organizations as may be designated and approved by the Executive Administrator and Board of Trustees of the Plan, but any information so released shall remain confidential as stated above and any party obtaining such information shall assume the same level of responsibility for maintaining such confidentiality as that of the Executive Administrator and Board of Trustees of the State Health Plan for Teachers and State Employees."
SECTION 1.(e)  G.S. 135‑45(b), as amended by Section 5(f) of this act, reads as rewritten:
"(b)	Notwithstanding the provisions of this Article, the Executive Administrator and Board of Trustees of the State Health Plan for Teachers and State Employees may contract with providers of institutional and professional medical care and services to establish preferred provider networks. The terms of a contract between the Plan and its third party administrator or between the Plan and its pharmacy benefit manager are a public record except that the terms in those contracts that contain trade secrets or proprietary or competitive information are not a public record under Chapter 132 of the General statutes and any such proprietary or competitive information and trade secrets contained in the contract shall be redacted by the Plan prior to making it available to the public. This subsection shall not be construed to prevent or restrict the release of any information made not a public record under this subsection to the Office of State Budget and Management, the State Auditor, the Attorney General, the Director of the State Budget, the Plan's Executive Administrator, solely and exclusively for their use in the furtherance of their duties and responsibilities, and to the Department of Health and Human Services solely for the purpose of implementing the transition of NC Health Choice from the Plan to the Department of Health and Human Services. The design, adoption, and implementation of the preferred provider contracts, networks, and optional alternative comprehensive health benefit plans, and programs available under the optional alternative plans, as authorized under G.S. 135‑45 are not subject to the requirements of Chapter 143 of the General Statutes. The Executive Administrator and Board of Trustees 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."
SECTION 1.(f)  G.S. 135‑44.2 reads as rewritten:
"§ 135‑44.2.  Executive Administrator.
(a)	The Plan shall have an Executive Administrator and a Deputy Executive Administrator. The Executive Administrator and the Deputy Executive Administrator positions are exempt from the provisions of Chapter 126 of the General Statutes as provided in G.S. 126‑5(c1).
(b)	The Executive Administrator shall be appointed by the Governor upon the recommendation of the Office of State Budget and Management. The term of employment and salary of the Executive Administrator shall be set by the Governor upon the recommendation of the Office of State Budget and Management. The Executive Administrator may be removed from office by the Governor upon the advice of the Office of State Budget and Management, and any vacancy in the office of Executive Administrator may be filled by the Governor upon the advice of the Office of State Budget and Management.
(c)	The Executive Administrator shall appoint the Deputy Executive Administrator and may employ such clerical and professional staff, and such other assistance as may be necessary to assist the Executive Administrator and the Board of Trustees in carrying out their duties and responsibilities under this Article. The Executive Administrator may designate managerial, professional, or policy‑making positions as exempt from the State Personnel Act. The Executive Administrator may also negotiate, renegotiate and execute contracts with third parties in the performance of the Executive Administrator's duties and responsibilities under this Article.
(d)	The Executive Administrator shall be responsible for:
(1)	Cost management programs;
(2)	Education and illness prevention programs;
(3)	Training programs for Health Benefit Representatives;
(4)	Membership functions;
(5)	Long‑range planning;
(6)	Provider and participant relations; and
(7)	Communications.
Managed care practices used by the Executive Administrator in cost management programs are subject to the requirements of G.S. 58‑3‑191, 58‑3‑221, 58‑3‑223, 58‑3‑235, 58‑3‑240, 58‑3‑245, 58‑3‑250, 58‑3‑265, 58‑67‑88, and 58‑50‑30.
(e)	The Executive Administrator shall make reports and recommendations on the Plan to the Governor, the Office of State Budget and Management, the President of the Senate, the Speaker of the House of Representatives and the Committee on Employee Hospital and Medical Benefits."
SECTION 1.(g)  G.S. 135‑44.4(8) and (9) read as rewritten:
"§ 135‑44.4.  Powers and duties of the Executive Administrator and Board of Trustees.
The Executive Administrator and Board of Trustees of the Teachers' and State Employees' Comprehensive Major Medical Plan shall have the following powers and duties:
…
(8)	Preparing and submitting to the Governor, the Office of State Budget and Management, and the General Assembly cost estimates for the Plan, including those required by Article 15 of Chapter 120 of the General Statutes.
(9)	Recommending to the Governor, the Office of State Budget and Management, and the General Assembly changes or additions to the health benefits programs and health care cost containment programs offered under the Plan, together with statements of financial and actuarial effects as required by Article 15 of Chapter 120 of the General Statutes.
…."
SECTION 1.(h)  G.S. 135‑45.11 reads as rewritten:
"§ 135‑45.11.  Cost‑savings initiatives and incentive programs authorized.
(a)	Cost‑Saving Initiatives. – Coverage of Over‑the‑Counter Medications. – The Executive Administrator and Board of Trustees may authorize coverage for over‑the‑counter medications as recommended by the Plan's pharmacy and therapeutics committee. In approving for coverage one or more over‑the‑counter medications, the Executive Administrator and Board of Trustees shall ensure that each recommended over‑the‑counter medication has been analyzed to ensure medical effectiveness and Plan member safety. The analysis shall also address the financial impact on the Plan. The Executive Administrator and Board of Trustees may impose a co‑payment to be paid by each covered individual for each packaged over‑the‑counter medication. The Executive Administrator and Board of Trustees may adopt policies establishing limits on the amount of coverage available for over‑the‑counter medications for each covered individual over a 12‑month period. Prior to implementing policy and co‑payment changes authorized under this section, the Executive Administrator and Board of Trustees shall submit the proposed policies and co‑payments to the Office of State Budget and Management for review.(b)	Incentive Programs. – For the purposes of helping Plan members to achieve and maintain a healthy lifestyle without impairing patient care, and to increase cost effectiveness in Plan coverage, the Executive Administrator and Board of Trustees may adopt programs offering incentives to Plan members to encourage changes in member behavior or lifestyle designed to improve member health and promote cost‑efficiency in the Plan. Participation in one or more incentive programs is voluntary on the part of the Plan member. Before adopting an incentive program, the Executive Administrator and Board of Trustees shall conduct an impact analysis on the proposed incentive program to determine (i) whether the program is likely to result in significant member satisfaction, (ii) that it will not adversely affect quality of care, and (iii) whether it is likely to result in significant cost savings to the Plan. The impact analysis may be conducted by a committee of the Plan, in conjunction with the Plan's consulting actuary, provided that the Plan's medical director participates in the analysis. An approved incentive plan may provide for a waiver of deductibles, co‑payments, and coinsurance required under this Article in order to determine the effectiveness of the incentive program in promoting the health of members and increasing cost‑effectiveness to the Plan. The Executive Administrator and Board of Trustees shall, before implementing incentive programs authorized under this section, submit the proposed programs to the Office of State Budget and Management for review."
SECTION 2.  This act becomes effective July 1, 2010.