North Carolina § 122C-23 - Licensure.

§ 122C-23. Licensure.

No person shall establish, maintain, or operate a licensable facility for individuals with mental illnesses, individuals with intellectual or other developmental disabilities, or substance abusers without a current license issued by the Secretary. Each license is issued to the person only for the premises named in the application and is not transferrable or assignable except with prior written approval of the Secretary. Any person that intends to establish, maintain, or operate a licensable facility shall apply to the Secretary for a license. The Secretary shall prescribe by rule the contents of the application forms. The Secretary shall issue a license if the Secretary finds that the person complies with this Article and the rules of the Commission and Secretary. Initial licenses issued under this section are valid for not more than 15 months. Licenses shall be renewed annually thereafter and shall expire at the end of the calendar year. The expiration date of a license shall be specified on the license when issued. Renewal of a regular license is contingent upon receipt of information required by the Secretary for renewal and continued compliance with this Article and the rules of the Commission and the Secretary. Licenses for facilities that have not served any clients during the previous 12 months are not eligible for renewal. Except as provided in subsection (e2) of this section, the Secretary shall not (i) enroll as a new provider in the North Carolina Medicaid or North Carolina Health Choice programs, (ii) revalidate as an enrolled provider in the Medicaid or NC Health Choice programs during the period of the license revocation or suspension, or (iii) issue a license for a new facility or a new service to any applicant meeting any of the following criteria: The applicant was the owner, principal, or affiliate of a licensable facility under Chapter 122C, Chapter 131D, or Article 7 of Chapter 110 of the General Statutes that had its license revoked until 60 months after the date of the revocation. The applicant is the owner, principal, or affiliate of a licensable facility that was assessed a penalty for a Type A or Type B violation under Article 3 of this Chapter, or any combination thereof, and any one of the following conditions exist: A single violation has been assessed in the six months prior to the application. Two violations have been assessed in the 18 months prior to the application and 18 months have not passed from the date of the most recent violation. Three violations have been assessed in the 36 months prior to the application and 36 months have not passed from the date of the most recent violation. Four or more violations have been assessed in the 60 months prior to application and 60 months have not passed from the date of the most recent violation. The applicant is the owner, principal, or affiliate of a licensable facility that had its license summarily suspended or downgraded to provisional status as a result of violations under G.S. 122C 24.1(a) until 60 months after the date of reinstatement or restoration of the license. The applicant is the owner, principal, or affiliate of a licensable facility that had its license summarily suspended or downgraded to provisional status as a result of violations under Article 1A of Chapter 131D of the General Statutes until 60 months after the date of reinstatement or restoration of the license. The Secretary may enroll a provider described in subsection (e1) of this section if any of the following circumstances apply: The applicant is an area program or county program providing services under G.S. 122C-141, and there is no other provider of the service in the catchment area. The Secretary finds that the area program or county program has shown good cause by clear and convincing evidence why the enrollment should be allowed. Licensure or enrollment shall be denied if an applicant's history as a provider under Chapter 131D, Chapter 122C, or Article 7 of Chapter 110 of the General Statutes is such that the Secretary has concluded the applicant will likely be unable to comply with licensing or enrollment statutes, rules, or regulations. In the event the Secretary denies licensure or enrollment under this subsection, the reasons for the denial and appeal rights pursuant to Article 3 of Chapter 150B shall be given to the provider in writing. Upon written application and in accordance with rules of the Commission, the Secretary may for good cause waive any of the rules implementing this Article, so long as those rules do not affect the health, safety, or welfare of the individuals within the licensable facility. Decisions made pursuant to this subsection may be appealed to the Commission for a hearing in accordance with Chapter 150B of the General Statutes. The Secretary may suspend the admission of any new clients to a facility licensed under this Article where the conditions of the facility are detrimental to the health or safety of the clients. This suspension shall be for the period determined by the Secretary and shall remain in effect until the Secretary is satisfied that conditions or circumstances merit removal of the suspension. In suspending admissions under this subsection, the Secretary shall consider the following factors: The degree of sanctions necessary to ensure compliance with this section and rules adopted to implement this subsection. The character and degree of impact of the conditions at the facility on the health or safety of its clients. The Department shall charge facilities licensed under this Chapter a nonrefundable annual base license fee plus a nonrefundable annual per-bed fee as follows: A social setting detoxification facility or medical detoxification facility subject to licensure under this Chapter shall not deny admission or treatment to an individual based solely on the individual's inability to pay. The Secretary may issue a provisional license for a period up to six months to a person obtaining the initial license for a facility. The licensee must demonstrate substantial compliance prior to being issued a full license. A provisional license for a period not to exceed six months may be granted by the Secretary to a person that is temporarily unable to comply with a rule when the noncompliance does not present an immediate threat to the health and safety of the individuals in the licensable facility. During this period the licensable facility shall correct the noncompliance based on a plan submitted to and approved by the Secretary. A provisional license for an additional period of time to meet the noncompliance shall not be issued. A facility may contest a suspension of admissions under this subsection in accordance with Chapter 150B of the General Statutes. In contesting the suspension of admissions, the facility must file a petition for a contested case within 20 days after the Department mails notice of suspension of admissions to the licensee. Type of Facility Number of Beds Base Fee Per-Bed Fee Facilities (non-ICF/IID): 0 beds $215.00 $0 1 to 6 beds $305.00 $0 More than 6 beds $475.00 $17.50 ICF/IID Only: 1 to 6 beds $845.00 $0 More than 6 beds $800.00 $17.50 History (1899, c. 1, s. 60; Rev., s. 4600; C.S., s. 6219; 1945, c. 952, s. 41; 1957, c. 100, ss. 1, 4; 1963, c. 813, s. 1; c. 1166, s. 7; 1965, c. 1178, ss. 1-3; 1969, c. 954; 1973, c. 476, ss. 133, 152; 1977, c. 679, s. 7; 1981, c. 51, s. 3; 1983, c. 718, ss. 1, 4; 1985, c. 589, s. 2; 1985 (Reg. Sess., 1986), c. 863, s. 8; 1987, c. 345, ss. 3, 4; 1989, c. 625, s. 6; 2000-55, s. 3; 2002-164, s. 4.1; 2003-284, s. 34.8(a); 2003-294, s. 2; 2003-390, s. 3; 2005-276, ss. 41.2(h), 10.40A(d); 2006-66, s. 10.23; 2009-451, s. 10.76(f); 2021-77, ss. 2, 7.1(b); 2021-88, s. 9(h).) Comprehensive Treatment Services Program. - Session Laws 2007-323, ss. 10.10(a)-(h), (j), (k), provide: "(a) The Department of Health and Human Services shall continue the Comprehensive Treatment Services Program for children at risk for institutionalization or other out-of-home placement. The Program shall be implemented by the Department in consultation with the Department of Juvenile Justice and Delinquency Prevention [now the Division of Juvenile Justice of the Department of Public Safety], the Department of Public Instruction, and other affected State agencies. The purpose of the Program is to provide appropriate and medically necessary nonresidential and residential treatment alternatives for children at risk of institutionalization or other out-of-home placement. Program funds shall be targeted for non-Medicaid eligible children. Program funds may also be used to expand a system-of-care approach for services to children and their families statewide. The program shall include the following: "(1) Behavioral health screening for all children at risk of institutionalization or other out-of-home placement. "(2) Appropriate and medically necessary nonresidential and residential services for children within the child mental health deaf and hard of hearing target population. "(3) Appropriate and medically necessary nonresidential and residential treatment services, including placements for sexually aggressive youth. "(4) Appropriate and medically necessary nonresidential and residential treatment services, including placements for youth needing substance abuse treatment services and children with serious emotional disturbances. "(5) Multidisciplinary case management services, as needed. "(6) A system of utilization review specific to the nature and design of the Program. "(7) Mechanisms to ensure that children are not placed in department of social services custody for the purpose of obtaining mental health residential treatment services. "(8) Mechanisms to maximize current State and local funds and to expand use of Medicaid funds to accomplish the intent of this Program. "(9) Other appropriate components to accomplish the Program's purpose. "(10) The Secretary of the Department of Health and Human Services may enter into contracts with residential service providers. "(11) A system of identifying and tracking children placed outside of the family unit in group homes, therapeutic foster care home settings, and other out-of-home placements. "(12) The development of a strong infrastructure of interagency collaboration. "(13) Individualized strengths-based care. "(b) In order to ensure that children at risk for institutionalization or other out-of-home placement are appropriately served by the mental health, developmental disabilities, and substance abuse services system, the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, shall do the following with respect to services provided to these children: "(1) Provide only those treatment services that are medically necessary. "(2) Implement utilization review of services provided. "(3) Adopt the following guiding principles for the provision of services: "a. Service delivery system must be outcome-oriented and evaluation-based. "b. Services should be delivered as close as possible to the child's home. "c. Services selected should be those that are most efficient in terms of cost and effectiveness. "d. Services should not be provided solely for the convenience of the provider or the client. "e. Families and consumers should be involved in decision making throughout treatment planning and delivery. "f. Services shall be specified, delivered, and monitored through a unified Child and Family Plan incorporating the principles of one-child-one-team-one-plan. "g. Out-of-home placements for children shall be a last resort and shall include concrete plans to bring the children back to a stable, permanent home, their schools, and their community. "(4) Implement all of the following cost-reduction strategies: "a. Preauthorization for all services except emergency services. "b. Levels of care to assist in the development of treatment plans. "c. Clinically appropriate services. "(c) The Department shall collaborate with other affected State agencies such as the Department of Juvenile Justice and Delinquency Prevention, the Department of Public Instruction, the Administrative Office of the Courts, and with local departments of social services, area mental health programs, and local education agencies to eliminate cost shifting and facilitate cost-sharing among these governmental agencies with respect to the treatment and placement services. "(d) The Department shall not allocate funds appropriated for Program services until a Memorandum of Agreement has been executed between the Department of Health and Human Services, the Department of Public Instruction, and other affected State agencies. The Memorandum of Agreement shall address specifically the roles and responsibilities of the various departmental divisions and affected State agencies involved in the administration, financing, care, and placement of children at risk of institutionalization or other out-of-home placement. The Department shall not allocate funds appropriated in this act for the Program until the Memoranda of Agreement between local departments of social services, area mental health programs, local education agencies, the Administrative Office of the Courts, and the Department of Juvenile Justice and Delinquency Prevention, as appropriate, are executed to effectuate the purpose of the Program. The Memoranda of Agreement shall address issues pertinent to local implementation of the Program, including provision for the immediate availability of student records to a local school administrative unit receiving a child placed in a residential setting outside the child's home county. "(e) Notwithstanding any other provision of law to the contrary, services under the Comprehensive Treatment Services Program are not an entitlement for non-Medicaid eligible children served by the Program. "(f) Of the funds appropriated in this act for the Comprehensive Treatment Services Program, the Department of Health and Human Services shall establish a reserve of three percent (3%) to ensure availability of these funds to address specialized needs for children with unique or highly complex problems. "(g) The Department of Health and Human Services, in conjunction with the Department of Juvenile Justice and Delinquency Prevention, the Department of Public Instruction, and other affected agencies, shall report on the following Program information: "(1) The number and other demographic information of children served. "(2) The amount and source of funds expended to implement the Program. "(3) Information regarding the number of children screened, specific placement of children, including the placement of children in programs or facilities outside of the child's home county, and treatment needs of children served. "(4) The average length of stay in residential treatment, transition, and return to home. "(5) The number of children diverted from institutions or other out-of-home placements such as training schools and State psychiatric hospitals and a description of the services provided. "(6) Recommendations on other areas of the Program that need to be improved. "(7) Other information relevant to successful implementation of the Program. "(h) The Department shall report on the following Program funding information: "(1) The amount of Program funding allocated and expended by each LME. "(2) The amount of Program funds each LME transferred out of the Program to serve purposes other than those outlined by this Program and an explanation of why LMEs transferred the funding. "(3) Recommendations to improve the penetration rate of Program funds to serve the intended populations across the State. "(j) Upon approval of the Legislative Services Commission, the Legislative Services Officer shall assign professional and clerical staff to assist in the work of the Task Force. Professional staff shall be those assigned to subject areas or agencies involving child-serving programs administered by the Department of Health and Human Services, the Department of Juvenile Justice and Delinquency Prevention, the Administrative Office of the Courts, and the Department of Public Instruction. Clerical staff shall be furnished to the Task Force through the offices of the House of Representatives and Senate Directors of Legislative Assistants. "(k) The Department shall report on April 1, 2008, and April 1, 2009, on the implementation of subsections (a) through (h) of this section. The reports required under this subsection shall be made to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, the Joint Legislative Oversight Committee on Mental Health, Developmental Disabilities, and Substance Abuse Services, and the Fiscal Research Division." For similar provisions, see 2003-294, s. 6(a), and 2005-276, s. 10.25(a)-(g) and (m). Editor's Note. - Session Laws 2003-284, s. 48.1, provides: "Parts 32 through 47 of this act do not affect the rights or liabilities of the State, a taxpayer, or another person arising under a statute amended or repealed by those parts before the effective date of its amendment or repeal; nor do they affect the right to any refund or credit of a tax that accrued under the amended or repealed statute before the effective date of its amendment or repeal." Session Laws 2003-284, s. 1.2, provides: "This act shall be known as the 'Current Operations and Capital Improvements Appropriations Act of 2003'." Session Laws 2003-284, s. 49.3, provides: "Except for statutory changes or other provisions that clearly indicate an intention to have effects beyond the 2003-2005 fiscal biennium, the textual provisions of this act apply only to funds appropriated for, and activities occurring during, the 2003-2005 fiscal biennium." Session Laws 2003-284, s. 49.5, is a severability clause. Subsection (i) was originally enacted as subsection (h) by Session Laws 2003-390, s. 3. It was redesignated at the direction of the Revisor of Statutes. Session Laws 2006-66, s. 1.2, provides: "This act shall be known as 'The Current Operations and Capital Improvements Appropriations Act of 2006'." Session Laws 2006-66, s. 28.6 is a severability clause. Session Laws 2003-390, s. 4, made the addition of subsection (i) applicable to social setting detoxification facilities and medical detoxification facilities licensed on and after the effective date of this act. The act was effective when it became law, and was approved by the Governor on August 7, 2003. Session Laws 2007-323, s. 1.2, provides: "This act shall be known as the 'Current Operations and Capital Improvements Appropriations Act of 2007'." Session Laws 2007-323, s. 32.3, provides: "Except for statutory changes or other provisions that clearly indicate an intention to have effects beyond the 2007-2009 fiscal biennium, the textual provisions of this act apply only to funds appropriated for, and activities occurring during, the 2007-2009 fiscal biennium." Session Laws 2007-323, s. 32.5, is a severability clause. Session Laws 2021-77, s. 7.1(d), made the amendments to subsection (e1) of this section by Session Laws 2021-77, s. 7.1(b), effective July 2, 2021, and applicable to cease and desist letters sent by the Department of Health and Human Services on or after that date. Effect of Amendments. - Session Laws 2005-276, ss. 10.40A(d), effective July 1, 2005, and 41.2(h), effective October 1, 2005, rewrote subsection (e); and in subsection (h), increased the base fees and per-bed fees. Session Laws 2006-66, s. 10.23, effective July 1, 2006, in subsection (h), deleted "that have licensed beds" following "under this Chapter," and rewrote the table listing the per-bed fees. Session Laws 2009-451, s. 10.76(f), effective the seventh calendar day after the date this act becomes law [August 14, 2009], in subsection (h), in the "Base Fee" column, substituted "$215.00" for "$175.00," "$305.00" for "$250.00," "$475.00" for "$350.00," "$845.00" for "$650.00," and "$800.00" for "$650.00", and in the "Per-Bed Fee" column substituted "$17.50" for "$12.50" twice. Session Laws 2021-77, s. 2, effective July 2, 2021, substituted "by filing a contested case under Article 3 of Chapter 150B " for "to the Commission for a hearing in accordance with Chapter 150B " in subsection (f). Session Laws 2021-77, s. 7.1(b), rewrote subsection (e1). For effective date and applicability, see editor's note. Session Laws 2021-88, s. 9(h), effective July 22, 2021, rewrote subsection (a); substituted "is not transferrable” for "shall not be transferrable” in subsection (b); substituted "that intends” for "who intends” in subsection (c); in subsection (d), in the first sentence, deleted "the authority of” preceding "this section” and substituted "are valid” for "shall be valid”; substituted "that is temporarily” for "who is temporarily,” and "shall not be” for "may not be” in the last paragraph of subsection (e); inserted "of the General Statutes” in subdivisions (e1)(1), and (e1)(4); rewrote subsection (e3); substituted "so long as” for "provided” in subsection (f); substituted "subsection” for "subsection, and” in subdivision (g)(1); and substituted "(non-ICF/IID)” for "(non-ICF/MR), and "ICF/IID” for "ICF/MR” in subsection (h).