S 527

GENERAL ASSEMBLY OF NORTH CAROLINA
  SESSION 2025
 S  2
  SENATE BILL 527
  Health Care Committee Substitute Adopted 4/17/25
 Short Title:   Modify Laws Applicable to LME/MCOs.  (Public)
 Sponsors:
 Referred to:
  March 26, 2025
1A BILL TO BE ENTITLED
2 AN     ACT TO MODIFY LAWS APPLICABLE TO LOCAL MANAGEMENT
3     ENTITIES/MANAGED CARE ORGANIZATIONS.
4 The General Assembly of North Carolina enacts:
5SECTION 1.(a) G.S. 122C-154 reads as rewritten:
6 "§ 122C-154. Personnel.
7     (a)     Employees under the direct supervision of the area director are employees of the area
8 authority.
9     (b)     As used in this section, the term "area authority senior management" means the area
10 director and the employees who are key personnel designated under G.S. 122C-121.1 in the
11 following roles, or substantially equivalent positions: chief executive officer, chief financial
12 officer, chief operating officer, chief compliance officer, chief information security officer, and
13 chief risk officer.
14     (c)     The area authority shall establish a salary plan that sets the salaries for employees of
15 the area authority. The salary plan for area authority senior management employees shall be in
16 compliance with Chapter 126 of the General Statutes.
17     (d)     For the purpose of personnel administration, Chapter 126 of the General Statutes
18 applies unless otherwise provided in this Article. Article or in Chapter 126 of the General
19 Statutes. Notwithstanding G.S. 126-9(b), an area authority senior management employee of an
20 area authority may be paid a salary that is in excess of the salary ranges established by the State
21 Human Resources Commission. Any salary for an area authority senior management employee
22 that is higher than the maximum of the applicable salary range shall be supported by
23 documentation of comparable salaries in comparable operations within the region and shall also
24 include the specific amount the board proposes to pay the employee. The area board shall not
25 authorize any salary adjustment for an area authority senior management employee that is above
26 the normal allowable salary range without obtaining prior approval from the Director of the
27 Office of State Human Resources."
28SECTION 1.(b) G.S. 122C-156 reads as rewritten:
29 "§ 122C-156. Salary plan for employees of the area authority.
30     (a)     The area authority shall establish a salary plan which shall set the salaries for
31 employees of the area authority. The salary plan shall be in compliance with Chapter 126 of the
32 General Statutes. In a multi-county area, the salary plan shall not exceed the highest paying salary
33 plan of any county in that area. In a single-county area, the salary plan shall not exceed the
34 county's salary plan. The salary plan limitations set forth in this section may be exceeded only if
35 the area authority and the board or boards of county commissioners, as the case may be, jointly
36 agree to exceed these limitations.
  *S527-v-2*
 General Assembly Of North Carolina  Session 2025
1    …."
2SECTION 1.(c) G.S. 122C-121 reads as rewritten:
3 "§ 122C-121. Area director.
4      …
5      (a1) The area board shall establish the area director's salary under Article 3 of Chapter 126
6 of the General Statutes. Notwithstanding G.S. 126-9(b), an area director may be paid a salary
7 that is in excess of the salary ranges established by the State Human Resources Commission.
8 Any salary that is higher than the maximum of the applicable salary range shall be supported by
9 documentation of comparable salaries in comparable operations within the region and shall also
10 include the specific amount the board proposes to pay the director. The area board shall not
11 authorize any salary adjustment that is above the normal allowable salary range without obtaining
12 prior approval from the Director of the Office of State Human Resources.Commission, as
13 provided in G.S. 122C-154.
14      …."
15SECTION 1.(d) This section applies to salary plans beginning on July 1, 2025.
16SECTION 2. G.S. 126-5 reads as rewritten:
17 "§ 126-5. Employees subject to Chapter; exemptions.
18      (a)    This Chapter applies to all of the following:
19(1)    All State employees not exempted by this section.
20(2)    All employees of the following local entities:
21a.      Area mental health, developmental disabilities, and substance abuse
22authorities, except as otherwise provided in Chapter 122C of the
23General Statutes.
24…
25(4)    Employees of an area authority, as defined under G.S. 122C-3, except as
26otherwise provided in Chapter 122C of the General Statutes or otherwise
27exempted by this section.
28      …
29      (c11) The following are exempt from (i) the classification and compensation rules
30 established by the State Human Resources Commission pursuant to G.S. 126-4(1) through (4);
31 (ii) G.S. 126-4(5) only as it applies to hours and days of work, vacation, and sick leave; (iii)
32 G.S. 126-4(6) only as it applies to promotion and transfer; (iv) G.S. 126-4(10) only as it applies
33 to the prohibition of the establishment of incentive pay programs; and (v) Article 2 of Chapter
34 126 of the General Statutes, except for G.S. 126-7.1:
35…
36(5)    Employees of area authorities, as defined under G.S. 122C-3, other than area
37authority senior management, as defined under G.S. 122C-154.
38      …."
39SECTION 3. G.S. 108D-60(a)(5) reads as rewritten:
40"(5) LME/MCOs operating BH IDD tailored plans shall may contract with an
41entity that holds a PHP license and that covers the services required to be
42covered under a standard benefit plan contract."
43SECTION 4. Except as otherwise provided, this act is effective when it becomes
44 law.
 Page 2  Senate Bill 527-Second Edition