North Carolina § 131E-178 - Activities requiring certificate of need.

§ 131E-178. Activities requiring certificate of need.

No person shall offer or develop a new institutional health service without first obtaining a certificate of need from the Department; provided, however, no person who provides gastrointestinal endoscopy procedures in one or more gastrointestinal endoscopy rooms located in a nonlicensed setting, shall be required to obtain a certificate of need to license that setting as an ambulatory surgical facility with the existing number of gastrointestinal endoscopy rooms, provided that: The license application is postmarked for delivery to the Division of Health Service Regulation by December 31, 2006; The applicant verifies, by affidavit submitted to the Division of Health Service Regulation within 60 days of the effective date of this act, that the facility is in operation as of the effective date of this act or that the completed application for the building permit for the facility was submitted by the effective date of this act; The facility has been accredited by The Accreditation Association for Ambulatory Health Care, The Joint Commission on Accreditation of Healthcare Organizations, or The American Association for Accreditation of Ambulatory Surgical Facilities by the time the license application is postmarked for delivery to the Division of Health Service Regulation of the Department; and The license application includes a commitment and plan for serving indigent and medically underserved populations. No person shall make an acquisition by donation, lease, transfer, or comparable arrangement without first obtaining a certificate of need from the Department, if the acquisition would have been a new institutional health service if it had been made by purchase. In determining whether an acquisition would have been a new institutional health service, the capital expenditure for the asset shall be deemed to be the fair market value of the asset or the cost of the asset, whichever is greater. No person shall incur an obligation for a capital expenditure which is a new institutional health service without first obtaining a certificate of need from the Department. An obligation for a capital expenditure is incurred when: An enforceable contract, excepting contracts which are expressly contingent upon issuance of a certificate of need, is entered into by a person for the construction, acquisition, lease or financing of a capital asset; A person takes formal action to commit funds for a construction project undertaken as his own contractor; or In the case of donated property, the date on which the gift is completed. Where the estimated cost of a proposed capital expenditure, including the fair market value of equipment acquired by purchase, lease, transfer, or other comparable arrangement, is certified by a licensed architect or engineer to be equal to or less than the expenditure minimum for capital expenditure for new institutional health services, such expenditure shall be deemed not to exceed the amount for new institutional health services regardless of the actual amount expended, provided that the following conditions are met: The certified estimated cost is prepared in writing 60 days or more before the obligation for the capital expenditure is incurred. Certified cost estimates shall be available for inspection at the facility and sent to the Department upon its request. The facility on whose behalf the expenditure was made notifies the Department in writing within 30 days of the date on which such expenditure is made if the expenditure exceeds the expenditure minimum for capital expenditures. The notice shall include a copy of the certified cost estimate. The Department may grant certificates of need which permit capital expenditures only for predevelopment activities. Predevelopment activities include the preparation of architectural designs, plans, working drawings, or specifications, the preparation of studies and surveys, and the acquisition of a potential site. All other persons proposing to obtain a license to establish an ambulatory surgical facility for the provision of gastrointestinal endoscopy procedures shall be required to obtain a certificate of need. The annual State Medical Facilities Plan shall not include policies or need determinations that limit the number of gastrointestinal endoscopy rooms that may be approved. History (1977, 2nd Sess., c. 1182, s. 2; 1979, c. 876, s. 2; 1981, c. 651, s. 3; 1983, c. 775, s. 1; 1983 (Reg. Sess., 1984), c. 1110, s. 3; 1985, c. 740, s. 3; 1985 (Reg. Sess., 1986), c. 1001, s. 1; 1987, c. 511, s. 1; c. 768; 1991, c. 692, s. 3; 1993, c. 7, s. 4; 2005-346, s. 7; 2007-182, s. 1.) 1915(b)/(c) Medicaid Waivers. - Session Laws 2011-102, s. 2, provides: "The Department of Health and Human Services shall implement additional capitated 1915(b)(c) Medicaid waivers during the 2011-2012 fiscal year through a Request for Application (RFA) process for LME applicants who prove readiness. The Department shall consult with stakeholders during the approval process. The waiver program shall include all Medicaid-covered mental health, developmental disabilities, and substance abuse services. Expansion of the waiver is contingent upon approval by the Centers for Medicare and Medicaid Services." Session Laws 2011-264, s. 1, as amended by Session Laws 2012-151, s. 13, provides: "(a) The Department of Health and Human Services (Department) shall proceed with statewide restructuring of the management responsibilities for the delivery of services for individuals with mental illness, intellectual and developmental disabilities, and substance abuse disorders through expansion of the 1915(b)/(c) Medicaid Waiver. It is the intent of the General Assembly that expansion of the 1915(b)/(c) Medicaid Waiver will be completed by July 1, 2013, and will result in the establishment of a system that is capable of managing all public resources that may become available for mental health, intellectual and developmental disabilities, and substance abuse services, including federal block grant funds, federal funding for Medicaid and Health Choice, and all other public funding sources. In implementing the restructuring and expansion authorized in this section, the Department shall do all of the following: "(1) Establish accountability for the development and management of a local system that ensures easy access to care, the availability and delivery of necessary services, and continuity of care for consumers in need of mental health, intellectual and developmental disabilities, and substance abuse services. "(2) Maintain fidelity to the Piedmont Behavioral Health (PBH) demonstration model, a proven system for the operation of all public resources for mental health, developmental disabilities, and substance abuse services. "(3) Designate an area authority for mental health, developmental disabilities, and substance abuse services to assume responsibility for all aspects of Waiver management. The following operational models are acceptable: "a. Merger model: A single larger LME is formed from the merger of two or more LMEs. "b. Interlocal agreement among LMEs: A single LME is identified as the leader for all Waiver operations, financial management, and accountability for performance measures. "(4) Use managed care strategies, including care coordination and utilization management, to reduce the trend of escalating costs in the State Medicaid program while ensuring medically necessary care and deploy a system for the allocation of resources based on the reliable assessment of intensity of need. The Department shall design these strategies to efficiently direct consumers to appropriate services and to ensure that consumers receive no more and no less than the amount of services determined to be medically necessary and at the appropriate funding level. "(5) As the 1915(b)/(c) Medicaid Waiver expands statewide, phase out the current CAP-MR/DD Waiver as well as the utilization management functions currently performed by public and private contractors. "(6) Design the Innovations Waiver in such a way as to serve the maximum number of individuals with intellectual and developmental disabilities within aggregate funding. "(7) Require LMEs approved to operate a 1915(b)/(c) Medicaid Waiver to do all of the following: "a. Maintain a local presence in order to respond to the unique needs and priorities of localities. "b. Implement a process for feedback end exchange of information and ideas to ensure communication with consumers, families, providers, and stakeholders regarding disability-specific and general Waiver operations. "c. Establish and maintain systems for ongoing communication and coordination regarding the care of individuals with mental illness, intellectual and developmental disabilities, and substance abuse disorders with other organized systems such as local departments of social services, Community Care of North Carolina, hospitals, school systems, the Department of Juvenile Justice, and other community agencies. "d. Comply with the following operational requirements: "1. Maintain disability specific infrastructure and competency to address the clinical, treatment, rehabilitative, habilitative, and support needs of all disabilities covered by the 1915(b)/(c) Medicaid Waiver. "2. Maintain administrative and clinical functions, including requirements for customer service, quality management, due process, provider network development, information systems, financial reporting, and staffing. "3. Maintain full accountability for all aspects of Waiver operations and for meeting all contract requirements specified by the Department. The Department shall not require LMEs to subcontract any managed care functions or nonservice activities to other entities. However, LMEs that choose to subcontract managed care functions to other entities will be limited to the following: "I. Information systems. "II. Customer service (including call center) operations. "III. Claims processing. "IV. Provider, enrollment, credentialing, and monitoring. "V. Professional services. "VI. Treatment Plan development. "VII. Referral to services. "(b) By August 1, 2011, the Department shall select LMEs that have been assessed to meet minimum criteria for Waiver operations according to the requirements of RFA #2011-261 issued on April 1, 2011. "(c) The Department shall require LMEs that have not been approved by the Department to operate a 1915(b)/(c) Medicaid Waiver by January 1, 2013, to merge with or be aligned through an interlocal agreement with an LME that has been approved by the Department to operate a 1915(b)/(c) Medicaid Waiver. If any LME fails to comply with this requirement, or fails to meet performance requirements of an approved contract with the Department to operate a 1915(b)/(c) Medicaid Waiver, the Department shall assign responsibility for management of the 1915(b)/(c) Medicaid Waiver on behalf of the noncompliant LME to an LME that is successfully operating the Waiver and successfully meeting performance requirements of the contract with the Department. Those LMEs approved to operate the 1915(b)/(c) Medicaid Waiver under an interlocal agreement must have a single LME entity designated as responsible for all aspects of Waiver operations and solely responsible for meeting contract requirements. "(d) County governments are not financially liable for overspending or cost overruns associated with an area authority's operation of a 1915(b)/(c) Medicaid Waiver. County governments are not financially liable for overspending or cost overruns of Medicaid services associated with a county program or multicounty program's operation of a 1915(b)/(c) Medicaid Waiver beyond the county program or multicounty program's Medicaid risk reserve and Medicaid fund balance amounts. "(e) Providers of targeted case management under the CAP-MR/DD Waiver are qualified to provide the 1915(c) service known as Community Guide under the Innovations Waiver. During the first year of assuming responsibility for Waiver operations, LMEs shall offer to contract with providers that were previously approved to provide targeted case management to individuals with intellectual and developmental disabilities under the CAP-MR/DD Waiver, for the provision of Community Guide services. "(f) By December 31, 2011, the Department shall determine the feasibility of adding habilitation services to the State Medicaid Plan through the 1915(i) Option as a strategy to address the needs of Medicaid enrollees with IDD who are not enrolled in the Innovations Waiver and are not residing in an intermediate care facility for the mentally retarded (ICF-MR facility). "(g) The Department shall consider the impact on ICF-MR facilities included in the 1915(b)/(c) Medicaid Waiver to determine and, to the extent possible, minimize potential inconsistencies with the requirements of G.S. 131E-176 and G.S. 131E-178 without negatively impacting the viability and success of the 1915(b)/(c) Medicaid Waiver programs. "(h) The Department shall discontinue the pilot program to administer the Supports Intensity Scale to people with intellectual and developmental disabilities in non-Waiver LMEs. "(i) The Department shall establish written policies ensuring alignment of objectives and operational coordination of the 1915(b)/(c) Medicaid Waiver and the care of individuals with mental illness, intellectual and developmental disabilities, and substance abuse disorders with other organized systems under the auspices of the Department, including Community Care of North Carolina. "(j) In the development of the budget for the 2013-2015 fiscal biennium and subsequent biennia, the General Assembly shall consider a reinvestment of at least fifteen percent (15%) of the total projected State savings for that biennium from the operation of the 1915(b)/(c) Waiver, for the purpose of expanding the number of consumers served by the Innovations 1915(c) Medicaid Waiver, or for the purpose of expanding other services that are designed to meet the needs of individuals with intellectual and developmental disabilities. "(k) By October 1, 2011, the Department, in coordination with the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, the Division of Medical Assistance, LMEs, PBH, and with stakeholder input, shall submit to the appropriate Oversight Committee of the General Assembly a strategic plan delineating specific strategies and agency responsibilities for the achievement of the objectives and deadlines set forth in this Act. "( l ) The Department shall submit status reports to the General Assembly on the restructuring and expansion authorized in this section on January 1, 2012, April 1, 2012, October 1, 2012, February 1, 2013, and October 1, 2013." For provisions pertaining to actions by the Secretary to ensure effective management of behavioral health services under the 1915(b)/(c) Medicaid Waiver, see G.S. 122C-124.2 , as added by Session Laws 2013-85, s. 2, effective June 12, 2013. Session Laws 2012-171, ss. 1-3, provide: "SECTION 1. Qualified provider. - The Department of Health and Human Services (Department) shall ensure that Critical Access Behavioral Health Agencies (CABHAs) are the only providers of the following Medicaid services: (i) Community Support Team; (ii) Intensive In-Home; and (iii) Child and Adolescent Day Treatment. CABHAs shall provide these services in accordance with all of the following: "(1) State statutory requirements regulating the provision of mental health and substance abuse services in Chapter 122C of the General Statutes. "(2) Chapters 21 through 25 and Chapter 27 of Title 10A of the North Carolina Administrative Code. "(3) Clinical policy requirements specified in Medicaid Clinical Coverage Policy, Section 8, and in the 1915(b) MH/DD/SAS Health Plan Waiver. "(4) Federal Medicaid policy as outlined in 42 C.F.R. Chapter IV, Subchapter C. "SECTION 2. Required services. - Each CABHA shall, at a minimum, provide comprehensive clinical assessment, medication management, outpatient therapy, and at least two of the following listed services within an age and disability-specific continuum: "(1) Intensive In-Home. "(2) Community Support Team. "(3) Child and Adolescent Day Treatment. "(4) Substance Abuse Intensive Outpatient Program. "(5) Substance Abuse Comprehensive Outpatient Treatment. "(6) Child and Adolescent Residential Treatment Level II - Family and Program Type, Level III, or Level IV (provision of multiple residential service levels counts as one service). "(7) Psychosocial Rehabilitation. "(8) Assertive Community Treatment Team. "(9) Multi-Systemic Therapy. "(10) Partial Hospitalization. "(11) Substance Abuse Medically Monitored Community Residential Treatment. "(12) Substance Abuse Non-Medical Community Residential Treatment. "(13) Outpatient Opioid Treatment. "(14) Any other mental health or substance abuse service required to be delivered by a CABHA as set forth in the North Carolina State Plan of Medical Assistance as approved by the Centers for Medicare and Medicaid Services (CMS) or in a waiver approved by CMS pursuant to 42 U.S.C. § 1915(b). "SECTION 3. Staffing. - In accordance with the North Carolina State Plan of Medical Assistance, the Department shall ensure each CABHA meet the following staffing requirements: "(1) A medical director who is a medical doctor licensed in North Carolina, enrolled as a provider, and in good standing with the Division of Medical Assistance. The medical director shall provide medical, clinical, and quality management oversight of the agency's CABHA services described in Section 2 of this act. "(2) A clinical director who shall be one of the following licensed or certified providers: "a. Licensed medical doctor. "b. Licensed psychologist. "c. Licensed clinical social worker. "d. Licensed psychological associate. "e. Licensed professional counselor. "f. Licensed marriage and family therapist. "g. Licensed nurse practitioner. "h. Licensed clinical addiction specialist. "i. Certified clinical supervisor. "(3) A quality managementraining director who shall have any training or experience in quality management or training." Editor's Note. - Session Laws 1983 (Reg. Sess., 1984), c. 1110, s. 17, provided that the enactment of ss. 1 through 3 of the act (which amended G.S. 131E-176 and 131E-178) should not be construed as requiring a facility which had obtained prior to June 30, 1984, a certificate of need for such use under prior law to obtain a new certificate of need on account of the special inclusion of chemical dependency treatment facilities in Article 9 of Chapter 131E . Session Laws 2005-346, s. 9, provides: "Nothing in Sections 2 through 10 of this act shall be construed to represent legislative intent as to the circumstances under which Medicare or Medicaid certification may be obtained for a provider of ambulatory surgery services." Effect of Amendments. - Session Laws 2005-346, s. 7, effective August 31, 2005, rewrote subsection (a). Session Laws 2007-182, s. 1, effective July 5, 2007, substituted "Division of Health Service Regulation" for "Division of Facility Services" in subdivisions (a)(1), (a)(2), and (a)(3).