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Bill Summary · SB 727

Summary — SB 727: “Number of Medicaid Standard Plan Contracts” (North Carolina, 2025)

Status: Introduced March 25, 2025; Passed 1st Reading.
Primary sponsor (bill text): Sen. Burgin. Effective date: “when it becomes law.”

Purpose / intent

SB 727 revises how the State awards managed‑care contracts (called “standard benefit plan” contracts) to deliver Medicaid services. The bill specifies the number and types of contracts the Division of Health Benefits (DHB) must award for initial and future procurement cycles, and sets rules for awarding regional contracts to provider‑led entities (PLEs).

Key provisions

  • Amendments to statute: modifies G.S. 108D‑1 (definitions) and G.S. 108D‑45 (number/nature of contracts).
  • Definitions: cross‑references commercial plans and provider‑led entities (PLEs) per G.S. 58‑93‑5.
  • Initial award cycle (subsection (a)):
    • (a)(1) Requires four statewide contracts between DHB and PHPs (prepaid health plans) to provide Medicaid coverage statewide.
    • (a)(2) Authorizes up to 12 additional contracts with PLEs to cover regions specified by DHB. These regional PLE contracts are supplemental to the four statewide PHP contracts; each regional contract must cover all Medicaid services throughout the region. A PLE may bid for multiple regional contracts if the regions are contiguous.
    • (a)(4) Allows initial capitated PHP contracts to be awarded on staggered terms of 3–5 years to reduce risk of coverage gaps if a contract terminates.
  • Subsequent award cycles (subsection (b)):
    • (b)(1) Requires four statewide contracts between DHB and commercial plans for statewide Medicaid coverage.
    • (b)(2) Limits PLE awards in subsequent cycles to up to four contracts (regional or statewide) in addition to the four statewide commercial contracts, with detailed rules:
    • (a) PLE contracts add to the four statewide contracts.
    • (b) Each regional PLE contract must cover the entire region’s Medicaid services.
    • (c) PLEs may bid for multiple contiguous regions.
    • (d) If fewer than four PLEs submit timely, qualifying RFP responses, all qualifying PLEs that applied shall be awarded a standard benefit plan contract (regional or statewide) based on their proposed service area.
    • (e) If four or more qualifying PLEs apply, DHB shall award four standard benefit plan contracts to PLEs (regional or statewide) based on proposed service areas.

Who is affected

  • Medicaid enrollees: potential changes in plan options, regional availability of PLEs versus statewide plans.
  • Division of Health Benefits (DHHS/DHB): procurement responsibilities, award and oversight of specified numbers of contracts.
  • Managed care organizations: commercial prepaid health plans (PHPs), provider‑led entities (PLEs), and other bidders.
  • Providers and local health systems: PLE awards could shift plan networks and care‑delivery arrangements regionally.
  • State oversight and procurement operations: adjustments to RFP and award processes; contract term management.

Timeline / procedural notes

  • The bill takes effect upon becoming law.
  • Initial vs. subsequent award cycles are treated separately: a larger, more PLE‑friendly structure is allowed for the initial procurement (up to 12 regional PLE contracts), while later cycles cap PLE contracts at up to four (with contingencies depending on RFP responses).
  • Staggered contract term authority (3–5 years) is intended to reduce risk of simultaneous contract expiration and coverage disruption.

Potential impacts (practical considerations)

  • Market structure: the bill aims to balance statewide commercial plans with opportunities for regional PLEs; initial larger PLE allocation may encourage local, provider‑led participation.
  • Competition and access: increased PLE participation (especially initially) could expand local plan options, but later caps may consolidate awards.
  • Continuity and administrative complexity: staggered terms and mixed statewide/regional contracts require active oversight to prevent coverage gaps and ensure network adequacy.
  • Beneficiary experience: plan choice and network composition could change regionally depending on which PLEs are awarded contracts.

For full statutory text and precise statutory references, see proposed amendments to G.S. 108D‑1 and G.S. 108D‑45 in the bill.

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

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