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Bill Summary · HB 242

HB 242 — Add Psychiatric Hospitals to Medicaid Healthcare Access and Stabilization Program (HASP)

Status: Reported Favorably (Reptd Fav)
Introduced: (filed 2025) — Effective: when enacted (per bill text)

Purpose / Intent

HB 242 would expand North Carolina’s Medicaid Healthcare Access and Stabilization Program (HASP) to include qualifying freestanding psychiatric hospitals. The goal is to permit Medicaid-directed payments to these psychiatric hospitals (similar to payments already made to acute care hospitals), funded by hospital assessments, to stabilize financing and improve access to inpatient psychiatric services.

Key provisions

  • Adds freestanding psychiatric hospitals to the definition of hospitals eligible for HASP reimbursements by amending G.S. 108A‑148.1(a).
    • A “qualifying freestanding psychiatric hospital” must be licensed under Article 2 of Chapter 122C, primarily provide inpatient psychiatric services under physician supervision, be non‑state‑owned, be Medicare‑certified, and submit Hospital Cost Report Information System (HCRIS) cost reports to CMS.
  • Directs the Department of Health and Human Services (DHHS) to submit a 42 C.F.R. § 438.6(c) preprint to CMS requesting approval to add freestanding psychiatric hospitals to HASP (CMS approval required).
  • Creates statutory structure for a new freestanding psychiatric hospital assessment:
    • Adds a freestanding psychiatric hospital modernized assessment (new G.S. 108A‑146.4) to be applied quarterly as a percentage of each hospital’s costs.
    • Incorporates a “modernized freestanding psychiatric hospital HASP component” into the statute that defines total modernized nonfederal receipts and the aggregate assessment collection amount (amendments to G.S. 108A‑146.5 and related sections).
  • Defines HASP directed payments to prepaid health plans (PHPs) for use in increasing hospital reimbursements and covering associated premium/insurance regulatory charges.
  • Retains the HASP mechanism that uses assessments on hospitals to generate the non‑federal share of Medicaid directed payments.

Who is affected

  • Freestanding psychiatric hospitals (Medicare‑certified inpatient psychiatric facilities) — become eligible to receive increased HASP reimbursements but will also be subject to the new assessment.
  • Acute care hospitals and existing HASP participants — program mechanics and funding pools are updated to incorporate psychiatric hospitals.
  • Prepaid health plans (PHPs)/Medicaid managed care plans — continue to be the payment conduit for directed payments to hospitals.
  • DHHS and state Medicaid program — responsible for seeking CMS approval and implementing assessment/payment calculations.
  • Medicaid program finances — payments to psychiatric hospitals would increase, funded by hospital assessments (net fiscal impact depends on program design and CMS approval).

Procedural / timeline notes

  • The bill takes effect when it becomes law (SECTION 1.(c)).
  • Implementation requires CMS approval of the 438.6(c) preprint before directed payments to psychiatric hospitals can begin.
  • Quarterly assessment percentages and HASP payment components are calculated administratively under the amended statute once the program is approved.

Potential impacts / considerations

  • Financial: Intended to increase reimbursements to freestanding psychiatric hospitals while using hospital assessments to provide the non‑federal share; specific dollar impacts are not provided in the bill text.
  • Access & stability: May improve financial stability of psychiatric inpatient providers and help preserve/increase access to inpatient psychiatric care for Medicaid enrollees.
  • Administrative: Requires DHHS rulemaking, reporting, and new quarterly assessment calculations; program changes hinge on CMS authorization.

Compiled from official sources — confirm details with the bill’s official record.

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