North Carolina

SUMMARY

North Carolina has made recent strides in health care transparency by requiring the NC Department of Health and Human Services to publish charge information relating to the most frequently reported admissions. However, the state lacks a legislated website such as an APCD to enable consumers to make side-by-side price comparisons between providers, and consequently earned an F from the Catalyst for Payment Reform group on the 2016 Report Card on State Price Transparency Laws. The federal government has also been active in enforcing antitrust law North Carolina. Most recently, in June 2016, the Department of Justice filed a civil suit in federal court in North Carolina against Carolinas Healthcare System, alleging that the provider uses anticompetitive, illegal anti-steering clauses in its contracts with insurers, which prohibit commercial health insurers in the Charlotte area from offering patients financial benefits to use less-expensive healthcare services offered by CHS’s competitors.

 

LEGISLATION/REGULATION

Legislative Calendar

North Carolina’s current regular legislative session runs from 1/11/2017 – mid July 2017

 

Recent Legislative Developments

Healthcare Transparency

2017 HB466 AN ACT RELATING TO THE REGULATION OF PHARMACY BENEFIT MANAGERS: gives pharmacies or pharmacists the right to provide an individual covered by a health plan their cost share for a prescription drug. Neither a pharmacy nor a pharmacist shall be penalized by a pharmacy’s benefits manager for discussing any information described in this section or for selling a lower-priced drug to the insured person if available. Prohibits a pharmacy benefit manager to charge, or attempt to collect from an insured person’s copayment that exceeds the total submitted charges by the network pharmacy. Passed  Signed by the governor 7/18/2017.
SB543 “HEALTH INSURANCE CLAIMS TRANSPARENCY ACT”: would require that within thirteen days that a health insurance issuer receives a written request for a written report of claim information from a plan, plan sponsor, or plan administrator, the health insurance issuer provide the request party the report in the form of a written report, an electronic file transmitted by secure electronic mail or file transfer protocol site, or by making the required information available through a secure Web site or Web portal system. A report of claim information must include all of the following information: aggregate paid claims experience by month, including claims experience for medical, dental, and pharmacy benefits as applicable, total premium paid by month, total number of covered employees on a monthly basis by coverage tiers, the total dollar amount of claims pending as of the date of the report, a separate description and individual claims report for any individual whose total paid claims exceed $15,000 during the 12 month preceding the date of the report. Inactive— Died.

 

Healthcare Cost

2017 HB640 AN ACT EXEMPTING AMBULATORY AND CERTAIN ACTIVITIES IN SMALLER COMMUNTY HOSPITALS FROM CERTIFICATE OF NEED REVIEW: would exempt from certificate of need review the construction, acquisition, or establishment of an ambulatory surgical facility, provided that all the following criteria are met: a physician or physician group licensed to practice makes every effort to enter a joint venture for the construction, development, acquisition, or establishment of the ambulatory surgical facility with an acute care or critical access hospital license and are unable to make an agreement. In this case the physician or physician group must send a written notification of this inability to the Department. The ambulatory surgical facility must have an agreement with a hospital within a reasonable distance from the facility, or the medical staff at the ambulatory surgical facility must have hospital privileges or other documented arrangements with a hospital that are deemed sufficient by the Department to ensure that inpatient hospital services will be available to  address any medical complications that require a patient of the ambulatory surgical facility to be admitted to a hospital for inpatient care. The ambulatory surgical facility must have the capability to immediately transfer a patient to a hospital with adequate emergency room services and that is within a reasonable distance from the facility. Inactive— Died.

 

 

Healthcare Markets

  • None identified.

 

 

Key Statutes

We compile state statutes relate to healthcare price and competition, including healthcare transparency, markets, and costs. For a complete listing of all health related statutes visit the State Health Practice Database for Research.

 

Transparency in Healthcare

  • C. Gen. Stat. § 131E-214.1 through 214.4 requires that all hospitals and freestanding ambulatory surgical facilities submit patient data to the Department of Health necessary to review and compare charges, utilization patterns, and quality of medical services. The data shall form the basis of a medical care database for consumers, providers, regulators, and insurers.

 

  • C. Gen. Stat. § 131E-214.11 through 214.14, the “Health Care Cost Reduction and Transparency Act of 2013,” aims to improve transparency in health care costs by mandating that the Department of Health and Human Services publish on the internet the most current price information it receives from facilities on the cost of the most common surgical and imaging procedures.

 

  • C. Gen. Stat. § 90-413.1 through 449 the “North Carolina Health Information Exchange Act,” creates the North Carolina Health Information Exchange (NC HIE). Any hospital that has an electronic health record system may connect to the NC HIE and submit individual patient demographic and clinical data on services paid for with Medicaid funds. The purpose of the system is to provide for a clearinghouse of data to improve healthcare coordination and promote cost-containment; however, participation in the system is voluntary and facilities may opt-out in the future.

 

  • C. Gen. Stat. § 131E-97.3 when a hospital is requested to disclose a contract, they may redact portions of a contract or refuse to disclose the document in its entirety if they believe in good faith the portion or entire contract constitutes competitive health information.

 

  • C. Gen. Stat. § 131E-91 states that hospitals and facilities must provide an itemized bill in clear and understandable language to patients upon request, and gives hospitals 45 days to reimburse patients for overbilling. The law also provides for rules to prevent against abusive collections agency processes.

 

Healthcare Contracts

  • C. Gen. Stat. § 58-50-295 prohibits most-favored nations (MFN) clauses in a contract between a health insurance carrier and a health care provider. A most-favored nations clause is a type of contractual provision that requires that the provider give the health carrier a rate equal to or lower than the most favorable between the provider and any other health insurance carrier. A most-favored nation clause in a healthcare contract can prevent smaller insurance carriers with less market power from competing on price.

 

Healthcare Markets

  • C. Gen. Stat. §§ 131E-175 et seq. “prohibits health care providers from acquiring, replacing, or adding to their facilities and equipment, except in specified circumstances, without the prior approval of the Department of Health and Human Services” through the state’s Certificate of Need process. A Certificate of Need regime aims to reduce healthcare overheard by reducing unnecessary or duplicative services, but can be anticompetitive by increasing regulatory barriers for new entrants.

 

  • C. Gen. Stat. §§ 58-51-85, 58-65-40, 58-67-50 no individual, group or blanket health insurance policy may be issued in North Carolina without prior approval from the Commissioner of Insurance. North Carolina requires rate review for all individual rate revisions, group Medicare Supplemental insurance, and medical service corporation rates.

 

FY 2018-2019 BUDGET

North Carolina enacts budgets on a two-year cycle, beginning July 1 of each odd-numbered year. North Carolina’s new Biennial Budget will take effect on July 1, 2017 and is valid through June 30, 2019. To view North Carolina’s FY 2018-2019 Budget, click here.

 

LITIGATION/ENFORCEMENT

  • On June 9, 2016, DOJ filed a civil suit in federal court in North Carolina against Carolinas Healthcare System, alleging that the provider uses anticompetitive, illegal anti-steering clauses in its contracts with insurers, which prohibit commercial health insurers in the Charlotte area from offering patients financial benefits to use less-expensive healthcare services offered by CHS’s competitors. Read the complaint and DOJ Press Release.

 

  • On October 14, 2014, the U.S. Supreme Court issued its decision in North Carolina Dental Board v. FTC. The question presented there is whether the state action doctrine, which may immunize state actors from federal antitrust scrutiny, extends to a board made up of mostly private actors who are actively preventing competition in the teeth whitening services market. The Court held that because a controlling number of the Board’s decision-makers are active market participants in the occupation the Board regulates, the Board can invoke state-action antitrust immunity only if it was subject to active supervision by the State, and the North Carolina Dental Board did not meet that requirement is not met.

 

KEY RESOURCES

North Carolina General Assembly

North Carolina Department of Justice

North Carolina Department of Insurance