2005 North Carolina Code - General Statutes Article 3 - Other Teacher, Employee Benefits; Child Health Benefits.

Article 3.

Other Teacher, Employee Benefits; Child Health Benefits.

Part 1.� General Provisions.

§§ 135‑32 through 135‑33.1:� Repealed by Session Laws 1981 (Regular Session, 1982), c. 1398, s. 1.

 

§ 135‑34: Repealed by Session Laws 1987, c.� 738, s. 29(l).

 

§ 135‑35: Repealed by Session Laws 1981, c.� 859, s. 13.17; 1981 (Regular Session, 1982), c. 1398, s. 1.

 

§ 135‑36: Repealed by Session Laws 1981 (Regular Session, 1982), c.� 1398, s. 1.

 

§ 135‑37.� Confidentiality.

Any information as herein described in this section which is in the possession of the Executive Administrator and the Board of Trustees of the Teachers' and State Employees' Comprehensive Major Medical Plan or its Claims Processor under the Teachers' and State Employees' Comprehensive Major Medical Plan shall be confidential and shall be exempt from the provisions of Chapter 132 of the General Statutes or any other provision requiring information and records held by State agencies to be made public or accessible to the public. This section shall apply to all information concerning individuals, including the fact of coverage or noncoverage, whether or not a claim has been filed, medical information, whether or not a claim has been paid, and any other information or materials concerning a plan participant. Provided, however, such information may be released to the State Auditor, or to the Attorney General, or to the persons designated under G.S. 135‑39.3 in furtherance of their statutory duties and responsibilities, or to such persons or organizations as may be designated and approved by the Executive Administrator and Board of Trustees of the Teachers' and State Employees' Comprehensive Major Medical Plan, but any information so released shall remain confidential as stated above and any party obtaining such information shall assume the same level of responsibility for maintaining such confidentiality as that of the Executive Administrator and Board of Trustees of the Teachers' and State Employees' Comprehensive Major Medical Plan. (1981, c. 355; 1981 (Reg. Sess., 1982), c. 1398, ss. 3, 4; 1983, c. 922, s. 21.10; 1985, c. 732, s. 38; 1985 (Reg. Sess., 1986), c. 1020, s. 20.)

 

§ 135‑38.� Committee on Employee Hospital and Medical Benefits.

(a)������ The Committee on Employee Hospital and Medical Benefits shall consist of 12 members as follows:

(1)������ The President Pro Tempore of the Senate or a designee thereof;

(2)������ Repealed by Session Laws 1995, c. 229, s. 1.

(2a)���� The Speaker of the House of Representatives or a designee thereof;

(3)������ Repealed by Session Laws 1995, c. 229, s. 1.

(3a)���� Five members of the Senate appointed by the President Pro Tempore of the Senate; and

(4)������ Repealed by Session Laws 1995, c. 229, s. 1.

(4a)���� Five members of the House of Representatives appointed by the Speaker.

(5),����� (6) Repealed by Session Laws 1995, c. 229, s. 1.

(7)������ through (10) Repealed by Session Laws 1989 (Regular Session, 1990), c. 1038, s. 19.1.

(11)���� Repealed by Session Laws 1995, c. 229, s. 1.

(b)������ The President Pro Tempore of the Senate and the Speaker of the House of Representatives, or their designees, shall remain on the Committee for the duration of their terms in those offices. Terms of the other Committee members are for two years and begin on January 15 of each odd‑numbered year, except the terms of the initial members, which begin on appointment and expire January 14, 1997. Members may complete a term of service on the Committee even if they do not seek reelection or are not reelected to the General Assembly, but resignation or removal from service in the General Assembly constitutes resignation or removal from service on the Committee. Members shall serve until their successors are appointed.

(c)������ The Committee shall review programs of hospital, medical and related care provided by Part 3 and Part 5 of this Article and programs of long‑term care benefits provided by Part 4 of this Article as recommended by the Executive Administrator and Board of Trustees of the Plan. The Executive Administrator and the Board of Trustees shall provide the Committee with any information or assistance requested by the Committee in performing its duties under this Article. The Committee shall meet not less than once each quarter to review the actions of the Executive Administrator and Board of Trustees. At each meeting, the Executive Administrator shall report to the Committee on any administrative and medical policies which have been issued as rules and regulations in accordance with G.S. 135‑39.8, and on any benefit denials, resulting from the policies, which have been appealed to the Board of Trustees.

(d)������ The time members spend on Committee business shall be considered official legislative business for purposes of G.S. 120‑3. (1981, c. 859, s. 13.18; 1981 (Reg. Sess., 1982), c. 1398, s. 5; 1983, c. 452, ss. 1, 2; 1985, c. 732, s. 45; 1987, c. 61; c. 857, s. 1; 1989 (Reg. Sess., 1990), c. 1038, s. 19.1; 1991, c. 739, s. 21; 1995, c. 229, s. 1; 1997‑278, s. 2; 1997‑468, s. 1; 1998‑1, s. 4(b).)

 

Part 2. Administrative Structure.

§ 135‑39.� Board of Trustees established.

(a)������ There is hereby established the Board of Trustees of the Teachers' and State Employees' Comprehensive Major Medical Plan.

(a1)���� The Board of Trustees of the Teachers' and State Employees' Comprehensive Major Medical Plan shall consist of nine members.

(b)������ Three members shall be appointed by the Governor. Of the initial members, one shall serve a term to expire June 30, 1983, and two shall serve terms to expire June 30, 1984. Subsequent terms shall be for two years. Vacancies shall be filled by the Governor. Of the members appointed by the Governor, one shall be either:

(1)������ An employee of a State department, agency, or institution;

(2)������ A teacher employed by a North Carolina public school system;

(3)������ A retired employee of a State department, agency, or institution; or

(4)������ A retired teacher from a North Carolina public school system.

(c)������ Three members shall be appointed by the General Assembly upon the recommendation of the Speaker of the House of Representatives in accordance with G.S. 120‑121. Of the initial members, two shall serve terms expiring June 30, 1983, and one shall serve a term expiring June 30, 1984. Vacancies shall be filled in accordance with G.S. 120‑122.

(d)������ Three members shall be appointed by the General Assembly upon the recommendation of the President Pro Tempore of the Senate in accordance with G.S. 120‑121. Of the initial members, two shall serve terms expiring June 30, 1983, and one shall serve a term expiring June 30, 1984. Vacancies shall be filled in accordance with G.S. 120‑122.

(d1)���� Repealed by Session Laws 1985, c. 732, s. 60.

(e)������ The Governor shall have the power to remove any member appointed by him under subsection (b). The General Assembly may remove any member appointed under subsections (c) or (d).

(f)������� The members of the Board of Trustees shall receive one hundred dollars ($100.00) per day, except employees eligible to enroll in the Plan, whenever the full Board of Trustees holds a public session, and travel allowances under G.S. 138‑6 when traveling to and from meetings of the Board of Trustees or hearings under G.S. 135‑39.7, but shall not receive any subsistence allowance or per diem under G.S. 138‑5, except when holding a meeting or hearing where this section does not provide for payment of one hundred dollars ($100.00) per day.

(g)������ Repealed by Session Laws 2002‑126, s. 28.16(a), effective October 1, 2002, and applicable to appointments and reappointments made on and after that date.

(h)������ No member of the Board of Trustees may serve more than three consecutive two‑year terms.

(i)������� Meetings of the Board of Trustees may be called by the Executive Administrator, the Chairman, or by any three members. (1981 (Reg. Sess., 1982), c. 1398, s. 6; 1983, c. 922, s. 1; 1985, c. 732, ss. 2‑5, 8, 11, 42, 59, 60; 1985 (Reg. Sess., 1986), c. 1020, s. 1; 1987, c. 857, s. 2; 1995, c. 490, s. 56; 2002‑126, s. 28.16(a).)

 

§ 135‑39.1.� Auditing of the Plan.

The Board of Trustees and the Executive Administrator of the Teachers' and State Employees' Comprehensive Major Medical Plan and the Claims Processor shall be subject to the oversight of the State Auditor pursuant to Article 5A of Chapter 147 of the General Statutes. (1981 (Reg. Sess., 1982), c. 1398, s. 6; 1983, c. 913, s. 24; 1985, c. 732, s. 46; 1985 (Reg. Sess., 1986), c. 1020, p. 20.)

 

§ 135‑39.2.� Officers, quorum, meetings.

(a)������ The Board of Trustees shall elect from its own membership such officers as it sees fit.

(b)������ Six members of the Board of Trustees in office shall constitute a quorum. Decisions of the Board of Trustees shall be made by a majority vote of the Trustees present, except as otherwise provided in this Part.

(c)������ Meetings may be called by the Chairman, or at the written request of three members. (1981 (Reg. Sess., 1982), c. 1398, s. 6; 1987, c. 857, s. 3.)

 

§ 135‑39.3.� Oversight team.

(a)������ The Committee on Employee Hospital and Medical Benefits may use employees of the Legislative Services Office and may employ contractual services as approved by the Legislative Services Commission to monitor the Executive Administrator and Board of Trustees, the Claims Processor, and the Comprehensive Major Medical Plan. The Director of the Budget may use employees of the Office of State Budget and Management to monitor the Executive Administrator and Board of Trustees, the Claims Processor, and the Comprehensive Major Medical Plan. Such assistance to the Committee on Employee Hospital and Medical Benefits and to the Director of the Budget shall comprise an oversight team.

(b)������ The oversight team shall, jointly or individually, have access to all records of the Board of Trustees, the Executive Administrator, the Claims Processor, and the Comprehensive Major Medical Plan. They shall, jointly or individually, be entitled to attend all meetings of the Board of Trustees.

(c)������ The oversight team shall report to the Committee on Employee Hospital and Medical Benefits when requested by the Committee. (1981 (Reg. Sess., 1982), c. 1398, s. 6; 1985, c. 732, ss. 47, 67; 1985 (Reg. Sess., 1986), c. 1020, s. 20; 2000‑140, s. 93.1(a); 2001‑424, s. 12.2(b).)

 

§ 135‑39.3A:� Repealed by Session Laws 1987, c.� 857, s. 4.

 

§ 135‑39.4: Repealed by Session Laws 1985 (Regular Session, 1986), c.� 1020, s. 2.

 

§ 135‑39.4A.� Executive Administrator.

(a)������ The Plan shall have an Executive Administrator and a Deputy Executive Administrator. The Executive Administrator and the Deputy Executive Administrator positions are exempt from the provisions of Chapter 126 of the General Statutes as provided in G.S. 126‑5(c1).

(b)������ The Executive Administrator shall be appointed by the Commissioner of Insurance. The term of employment and salary of the Executive Administrator shall be set by the Commissioner of Insurance upon the advice of an executive committee of the Committee on Employee Hospital and Medical Benefits.

The Executive Administrator may be removed from office by the Commissioner of Insurance, upon the advice of an executive committee of the Committee on Employee Hospital and Medical Benefits, and any vacancy in the office of Executive Administrator may be filled by the Commissioner of Insurance with the term of employment and salary set upon the advice of an executive committee of the Committee on Employee Hospital and Medical Benefits.

(c)������ to (e) Repealed by Session Laws 1987, c. 857, s. 5.

(f)������� The Executive Administrator shall appoint the Deputy Executive Administrator and may employ such clerical and professional staff, and such other assistance as may be necessary to assist the Executive Administrator and the Board of Trustees in carrying out their duties and responsibilities under this Article. The Executive Administrator may designate managerial, professional, or policy‑making positions as exempt from the State Personnel Act. The Executive Administrator may also negotiate, renegotiate and execute contracts with third parties in the performance of his duties and responsibilities under this Article; provided any contract negotiations, renegotiations and execution with a Claims Processor, with an optional hospital and medical benefit plan or program authorized under G.S. 135‑39.5B, with a preferred provider of institutional or professional hospital and medical care, or with a pharmacy benefit manager shall be done only after consultation with the Committee on Employee Hospital and Medical Benefits.

(g)������ The Executive Administrator shall be responsible for:

(1)������ Cost management programs;

(2)������ Education and illness prevention programs;

(3)������ Training programs for Health Benefit Representatives;

(4)������ Membership functions;

(5)������ Long‑range planning;

(6)������ Provider and participant relations; and

(7)������ Communications.

Managed care practices used by the Executive Administrator in cost management programs are subject to the requirements of G.S. 58‑3‑191, 58‑3‑221, 58‑3‑223, 58‑3‑235, 58‑3‑240, 58‑3‑245, 58‑3‑250, 58‑3‑265, 58‑67‑88, and 58‑50‑30.

(h)������ The Executive Administrator shall make reports and recommendations on the Plan to the President of the Senate, the Speaker of the House of Representatives and the Committee on Employee Hospital and Medical Benefits. (1985, c. 732, s. 10; 1985 (Reg. Sess., 1986), c. 1020, s. 20; 1987, c. 857, s. 5; 1991, c. 427, s. 2; 2000‑141, s. 2; 2001‑446, s. 6; 2004‑124, s. 31.27(a); 2005‑276, ss. 29.33(c), 29.34(a).)

 

§ 135‑39.5.� Powers and duties of the Executive Administrator and Board of Trustees.

The Executive Administrator and Board of Trustees of the Teachers' and State Employees' Comprehensive Major Medical Plan shall have the following powers and duties:

(1)������ Supervising and monitoring of the Claims Processor.

(2)������ Providing for enrollment of employees in the Plan.

(3)������ Communicating with employees enrolled under the Plan.

(4)������ Communicating with health care providers providing services under the Plan.

(5)������ Making payments at appropriate intervals to the Claims Processor for benefit costs and administrative costs.

(6)������ Conducting administrative reviews under G.S. 135‑39.7.

(7)������ Annually assessing the performance of the Claims Processor.

(8)������ Preparing and submitting to the Governor and the General Assembly cost estimates for the health benefits plan, including those required by Article 15 of Chapter 120 of the General Statutes.

(9)������ Recommending to the Governor and the General Assembly changes or additions to the health benefits program and health care cost containment programs, together with statements of financial and actuarial effects as required by Article 15 of Chapter 120 of the General Statutes.

(10)���� Working with State employee groups to improve health benefit programs.

(11)���� Repealed by Session Laws 1985, c. 732, s. 9.

(12)���� Determining basis of payments to health care providers, including payments in accordance with G.S. 58‑50‑56. The Plan shall comply with G.S. 58‑3‑225.

(13)���� Requiring bonding of the Claims Processor in the handling of State funds.

(14)���� Repealed by Session Laws 1985, c. 732, s. 7.

(15)���� In case of termination of the contract under G.S. 135‑39.5A, to select a new Claims Processor, after competitive bidding procedures approved by the Department of Administration.

(16)���� Notwithstanding the provisions of Part 3 of this Article, to formulate and implement cost‑containment measures which are not in direct conflict with that Part.

(17)���� Implementing pilot programs necessary to evaluate proposed cost containment measures which are not in direct conflict with Part 3 of this Article, and expending funds necessary for the implementation of such programs.

(18)���� Authorizing coverage for alternative forms of care not otherwise provided by the Plan in individual cases when medically necessary, medically equivalent to services covered by the Plan, and when such alternatives would be less costly than would have been otherwise.

(19)���� Establishing and operating a hospital and other provider bill audit program and a fraud detection program.

(20)���� Determining administrative and medical policies that are not in direct conflict with Part 3 of this Article upon the advice of the Claims Processor and upon the advice of the Plan's consulting actuary when Plan costs are involved.

(21)���� Supervising the payment of claims and all other disbursements under this Article, including the recovery of any disbursements that are not made in accordance with the provisions of this Article.

(22)���� Implementing and administering a program of long‑term care benefits pursuant to Part 4 of this Article.

(23)���� Implementing and administering a program of child health insurance benefits pursuant to Part 5 of this Article.

(24)���� Implementing and administering a case management and disease management program.

(25)���� Implementing and administering a pharmacy benefit management program through a third‑party contract awarded after receiving competitive quotes.

(26)���� Increasing annually the amount of the annual deductible and annual aggregate maximum deductible. The increase shall be established by determining the ratio of the CPI‑Medical Index to such index one year earlier. If the ratio indicates an increase in the CPI‑Medical Index, then the amount of the annual deductible and annual aggregate maximum deductible may be increased by not more than the percentage increase in the CPI‑Medical Index. As used in this subdivision, the term "CPI‑Medical Index" means the U.S. Consumer Price Index for All Urban Consumers for Total Medical Care.

(27)���� The Executive Administrator may establish pilot programs to measure potential cost savings and improvements in patient care available through local, provider‑driven medical management. (1981 (Reg. Sess., 1982), c. 1398, s. 6; 1983, c. 922, s. 2; 1985, c. 732, ss. 7, 9, 23, 24, 50; 1985 (Reg. Sess., 1986), c. 1020, ss. 3, 20; 1987, c. 857, ss. 6, 7; 1987 (Reg. Sess., 1988), c. 1091, s. 5; 1989, c. 752, s. 22(a); 1991, c. 427, s. 3; 1993 (Reg. Sess., 1994), c. 679, s. 10.3; 1997‑468, s. 2; 1997‑519, s. 3.15; 1998‑1, s. 4(c); 2000‑141, s. 3; 2001‑253, ss. 1(q), 1(a); 2001‑487, s. 85.5.)

 

§ 135‑39.5A.� Termination.

The Executive Administrator and Board of Trustees may terminate the contract with the Claims Processor as provided in the request for proposal. (1981 (Reg. Sess., 1982), c. 1398, s. 6; 1985, c. 732, s. 51; 1985 (Reg. Sess., 1986), c. 1020, s. 20.)

 

§ 135‑39.5B.� Optional plans.

(a)������ The Executive Administrator and Board of Trustees may, after consultation with the Committee on Employee Hospital and Medical Benefits, provide for optional prepaid hospital and medical benefits plans. Benefits offered under such optional plans shall be comparable to those offered under the Plan. The amounts of State funds contributed for such optional plans shall not be more than the amounts contributed for each person eligible under G.S. 135‑40.2 on a noncontributory Employee Only basis, with the person selecting an optional plan paying any excess, if necessary. The amount of State funds contributed to such optional plans shall also not exceed the amount of an optional plan's cost for Employee Only coverage. The Executive Administrator and Board of Trustees are authorized to assess and collect fees from participating optional plans provided by this section for administrative purposes and for risk management purposes. Such fees may be based upon the enrollees' risk factors and the number and types of contracts enrolled by each participating optional plan, and may be collected by the Plan in a manner prescribed by the Executive Administrator and Board of Trustees. In no instance shall benefits be paid under Part 3 of this Article for persons enrolled in an optional prepaid hospital and medical benefit plan authorized under this section on and after the effective date of enrollment in the optional prepaid plan, except in cases of continuous hospital confinement approved by the Executive Administrator.

(b)������ The Executive Administrator and Board of Trustees may, after consulting with the Committee on Employee Hospital and Medical Benefits, adopt an arrangement for an optional hospital and medical benefits program other than the one specified in subsection (a) of this section. The optional program may include one that is purchased or underwritten by the State and may be a PPO or other type optional program. Optional programs under this section are not subject to benefits and cost‑sharing requirements under G.S. 135‑40.5 through G.S. 135‑40.9. The Executive Administrator and Board of Trustees may set premium rates for coverage under an optional program on a partially contributory basis, provided that the amounts of State funds contributed for coverage on a partially contributory basis shall not be more than the Plan's total noncontributory premium for Employee Only coverage, with the person selecting the optional program coverage paying the balance of the partially contributory premium not paid by the Plan. The amount of State funds contributed for purchased optional programs shall not exceed the amount of a purchased optional program's cost for Employee Only coverage. Contracts for an optional program under this subsection are not subject to Article 3 of Chapter 143 of the General Statutes. (1981 (Reg. Sess., 1982), c. 1398, s. 6; 1985, c. 732, s. 37; 1985 (Reg. Sess., 1986), c. 1020, s. 6; 1987, c. 857, s. 8; 1991, c. 427, s. 4; c. 636, s. 15; 2005‑276, s. 29.33(a).)

 

§ 135‑39.6.� Special funds created.

(a)������ There are hereby established two special funds, to be known as the Public Employee Health Benefit Fund and the Health Benefit Reserve Fund for the payment of hospital and medical benefits.

All premiums, fees, charges, rebates, refunds or any other receipts including, but not limited to, earnings on investments, occurring or arising in connection with health benefits programs established by this Article, shall be deposited into the Public Employee Health Benefit Fund. Disbursements from the Fund shall include any and all amounts required to pay the benefits and administrative costs of such programs as may be determined by the Executive Administrator and Board of Trustees.

Any unencumbered balance in excess of prepaid premiums or charges in the Public Employee Health Benefit Fund at the end of each fiscal year shall be used first, to provide an actuarially determined Health Benefit Reserve Fund for incurred but unpresented claims, second, to reduce the premiums required in providing the benefits of the health benefits programs, and third to improve the plan, as may be provided by the General Assembly. The balance in the Health Benefits Reserve Fund may be transferred from time to time to the Public Employee Health Benefit Fund to provide for any deficiency occurring therein.

The Public Employee Health Benefit Fund and the Health Benefit Reserve Fund shall be deposited with the State Treasurer and invested as provided in G.S. 147‑69.2 and 147‑69.3.

(b)������ Disbursement from the Public Employee Health Benefit Fund may be made by warrant drawn on the State Treasurer by the Executive Administrator, or the Executive Administrator and Board of Trustees may by contract authorize the Claims Processor to draw the warrant.

(c)������ Separate and apart from the special funds authorized by subsections (a) and (b) of this section, there shall be a Public Employee Long‑Term Care Benefit Fund if the long‑term care benefits provided by Part 4 of this Article are administered on a self‑insured basis.

(d)������ Separate and apart from the special funds authorized by subsections (a), (b), and (c) of this section, there shall be a Child Health Insurance Fund. All premium receipts or any other receipts, including earnings on investments, occurring or arising in connection with acute medical care benefits provided under the Health Insurance Program for Children shall be deposited into the Child Health Insurance Fund. Disbursements from the Child Health Insurance Fund shall include any and all amounts required to pay the benefits and administrative costs of the Health Insurance Program for Children as may be determined by the Executive Administrator and Board of Trustees. (1981 (Reg. Sess., 1982), c. 1398, s. 6; 1985, c. 732, ss. 43, 63; 1985 (Reg. Sess., 1986), c. 1020, s. 20; 1997‑468, s. 3; 1998‑1, s. 4(d).)

 

§ 135‑39.6A.� Premiums set.

(a)������ The Executive Administrator and Board of Trustees shall, from time to time, establish premium rates for the Comprehensive Major Medical Plan except as they may be established by the General Assembly in the Current Operations Appropriations Act, and establish regulations for payment of the premiums. Premium rates shall be established for coverages where Medicare is the primary payer of health benefits separate and apart from the rates established for coverages where Medicare is not the primary payer of health benefits.

(b)������ The Executive Administrator and Board of Trustees shall establish separate premium rates for the long‑term care benefits provided by Part 4 of this Article if the benefits are administered on a self‑insured basis.

(c)������ The Executive Administrator and Board of Trustees shall establish premium rates for benefits provided under Part 5 of this Article. The Department of Health and Human Services shall, from State and federal appropriations and from any other funds made available for the Health Insurance Program for Children established under Part 8 of Article 2 of Chapter 108A of the General Statutes, make payments to the North Carolina Teachers' and State Employees' Comprehensive Major Medical Plan as determined by the Plan for its administration, claims processing, and other services authorized to provide coverage for acute medical care for children eligible for benefits provided under Part 5 of this Article.

(d)������ (Effective until June 30, 2006) In setting premiums for firemen, rescue squad workers, and members of the national guard, and their eligible dependents, the Executive Administrator and Board of Trustees shall establish rates separate from those affecting active and retired teachers, State employees, and their dependents enrolled in the Plan. In setting premiums for employees of the North Carolina Symphony Society, Inc., and their eligible dependents, the Executive Administrator and Board of Trustees shall establish rates separate from those affecting active teachers and State employees and their dependents enrolled in the Plan. These separate premium rates shall include rate factors for incurred but unreported claim costs, for the effects of adverse selection from voluntary participation in the Plan, and for any other actuarially determined measures needed to protect the financial integrity of the Plan for the benefit of its served employees, retired employees, and their eligible dependents.

(d)������ (Effective June 30, 2006) In setting premiums for firemen, rescue squad workers, and members of the national guard, and their eligible dependents, the Executive Administrator and Board of Trustees shall establish rates separate from those affecting other members of the Plan. These separate premium rates shall include rate factors for incurred but unreported claim costs, for the effects of adverse selection from voluntary participation in the Plan, and for any other actuarially determined measures needed to protect the financial integrity of the Plan for the benefit of its served employees, retired employees, and their eligible dependents.

(e)������ The total amount of premiums due the Plan from charter schools as employing units, including amounts withheld from the compensation of Plan members, that is not remitted to the Plan by the fifteenth day of the month following the due date of remittance shall be assessed interest of one and one‑half percent (1 �%) of the amount due the Plan, per month or fraction thereof, beginning with the sixteenth day of the month following the due date of the remittance. The interest authorized by this section shall be assessed until the premium payment plus the accrued interest amount is remitted to the Plan. The remittance of premium payments under this section shall be presumed to have been made if the remittance is postmarked in the United States mail on a date not later than the fifteenth day of the month following the due date of the remittance. (1981 (Reg. Sess., 1982), c. 1398, s. 6; 1985, c. 732, s. 52; 1991, c. 427, s. 5; 1997‑468, s. 4; 1998‑1, s. 4(e); 1999‑237, s. 28.29(h); 2003‑69, s. 2; 2004‑124, s. 31.21(c); 2005‑276, s. 29.31(e).)

 

§ 135‑39.7.� Administrative review.

(a)������ If, after exhaustion of internal appeal handling as outlined in the contract with the Claims Processor any person is aggrieved, the Claims Processor shall bring the matter to the attention of the Executive Administrator and Board of Trustees, which shall promptly decide whether the subject matter of the appeal is a determination subject to external review under Part 4 of Article 50 of Chapter 58 of the General Statutes. The Executive Administrator and Board of Trustees shall inform the aggrieved person and the aggrieved person's provider of the decision and shall provide the aggrieved person notice of the aggrieved person's right to appeal that decision as provided in this subsection. If the Executive Administrator and Board of Trustees decide that the subject matter of the appeal is not a determination subject to external review, then the Executive Administrator and Board of Trustees may make a binding decision on the matter in accordance with procedures established by the Executive Administrator and Board of Trustees. The Executive Administrator and Board of Trustees shall provide a written summary of the decisions made pursuant to this section to all employing units, all health benefit representatives, the oversight team provided for in G.S. 135‑39.3, all relevant health care providers affected by a decision, and to any other parties requesting a written summary and approved by the Executive Administrator and Board of Trustees to receive a summary immediately following the issuance of a decision. A decision by the Executive Administrator and Board of Trustees that a matter raised on internal appeal is a determination subject to external review as provided in subsection (b) of this section may be contested by the aggrieved person under Chapter 150B of the General Statutes. The person contesting the decision may proceed with external review pending a decision in the contested case under Chapter 150B of the General Statutes.

(b)������ The Executive Administrator and Board of Trustees shall adopt and implement utilization review and internal grievance procedures that are substantially equivalent to those required under G.S. 58‑50‑61 and G.S. 58‑50‑62. External review of determinations shall be conducted in accordance with Part 4 of Article 50 of Chapter 58 of the General Statutes. As used in this section, "determination" is a decision by the Executive Administrator and Board of Trustees, the Plan's designated utilization review organization, or a self‑funded health maintenance organization administrated by or under contract with the Plan that an admission, availability of care, continued stay, or other health care service has been reviewed and, based upon information provided, does not meet the Plan's requirements for medical necessity, appropriateness, health care setting, or level of care or effectiveness, and the requested service is therefore denied, reduced, or terminated. (1981 (Reg. Sess., 1982), c. 1398, s. 6; 1985, c. 732, s. 53; 1985 (Reg. Sess., 1986), c. 1020, s. 20; 1991, c. 427, s. 6; 2001‑446, s. 5(e).)

 

§ 135‑39.8.� Rules and regulations.

The Executive Administrator and Board of Trustees may issue rules and regulations to implement Parts 2, 3, 4, and 5 of this Article. The Executive Administrator and Board of Trustees shall provide to all employing units, all health benefit representatives, the oversight team provided for in G.S. 135‑39.3, all relevant health care providers affected by a rule or regulation, and to any other persons requesting a written description and approved by the Executive Administrator and Board of Trustees written notice and an opportunity to comment not later than 30 days prior to adopting, amending, or rescinding a rule or regulation, unless immediate adoption of the rule or regulation without notice is necessary in order to fully effectuate the purpose of the rule or regulation. Rules and regulations of the Board of Trustees shall remain in effect until amended or repealed by the Executive Administrator and Board of Trustees. The Executive Administrator and Board of Trustees shall provide a written description of the rules and regulations issued under this section to all employing units, all health benefit representatives, the oversight team provided for in G.S. 135‑39.3, all relevant health care providers affected by a rule or regulation, and to any other persons requesting a written description and approved by the Executive Administrator and Board of Trustees on a timely basis. (1981 (Reg. Sess., 1982), c. 1398, s. 6; 1985, c. 732, s. 54; 1991, c. 427, s. 7; 1997‑278, s. 3; 1997‑468, s. 5; 1998‑1, s. 4(f); 2001‑253, s. 1(r).)

 

§ 135‑39.9.� Reports to the General Assembly.

(a)������ The Executive Administrator and Board of Trustees shall report to the General Assembly at such times and in such forms as shall be provided by the Committee on Employee Hospital and Medical Benefits.

(b)������ Repealed by Session Laws 1985, c. 732, s. 55.1, effective July 12, 1985.

(c)������ Repealed by Session Laws 1985 (Reg. Sess., 1986), c. 1020, s. 7, effective July 1, 1986. (1981 (Reg. Sess., 1982), c. 1398, s. 6; 1985, c. 732, ss. 55, 55.1; 1985 (Reg. Sess., 1986), c. 1020, s. 7.)

 

§ 135‑39.10.� Meaning of "Executive Administrator and Board of Trustees".

Whenever in this Article the words "Executive Administrator and Board of Trustees" appear, they mean that the Executive Administrator shall have the power, duty, right, responsibility, privilege or other function mentioned, after consulting with the Board of Trustees of the Teachers' and State Employees' Comprehensive Major Medical Plan. (1985, c. 732, s. 57; 1991, c. 427, s. 8.)

 

§ 135‑39.11.� Contract disputes.

A dispute involving the performance, terms, or conditions of a contract between the Plan and an entity under contract with the Plan is not a contested case under Article 3 of Chapter 150B of the General Statutes. (2001‑192, s. 2.)

 

Part 3.� Comprehensive Major Medical Plan.

§ 135‑40.� Undertaking.

(a)������ The State of North Carolina undertakes to make available a Comprehensive Major Medical Plan (hereinafter called the "Plan") exclusively for the benefit of its employees, retired employees and certain of their dependents which will pay benefits in accordance with the terms hereof. The Plan shall have all the powers and privileges of a corporation and shall be known as the North Carolina Teachers' and State Employees' Comprehensive Major Medical Plan. The Executive Administrator and Board of Trustees shall carry out their duties and responsibilities as fiduciaries for the Plan.

(a1)���� The State of North Carolina deems it to be in the public interest for North Carolina firemen, rescue squad workers, and members of the national guard, and certain of their dependents, who are not eligible for any other type of comprehensive group health insurance or other comprehensive group health benefits, and who have been without any form of group health insurance or other comprehensive group health benefit coverage for at least six months, to be given the opportunity to participate in the benefits provided by the North Carolina Teachers' and State Employees' Comprehensive Major Medical Plan. Coverage under the Plan shall be voluntary for eligible firemen, rescue squad workers, and members of the national guard who elect participation in the Plan for themselves and their eligible dependents.

(b)������ The Plan benefits will be provided under contracts between the State and the Claims Processor selected by the State. Claims Processor refers to the administrator, third party administrator or other party contracting with the State to administer the Plan benefits. Such contracts shall include the substance of G.S. 135‑40.1 through G.S. 135‑40.13 and the description of Plan in the request for proposal, and shall be administered by the respective Claims Processor of the State which will determine benefits and other questions arising thereunder. The contracts necessarily will conform to applicable State laws. If any of the provisions of G.S. 135‑40.1 through G.S. 135‑40.13 and the request for proposals must be modified for inclusion in the contract because of State laws, such modification will be made.

(c)������ Payroll deduction shall be available for coverage under this Part or under G.S. 135‑39.5B of amounts not paid by the State.

(d)������ Notwithstanding any other provisions of the Plan, the Executive Administrator and Board of Trustees are specifically authorized to use all appropriate means to secure tax qualification of the Plan under any applicable provisions of the Internal Revenue Code of 1954 as amended. The Executive Administrator and Board of Trustees shall furthermore comply with all applicable provisions of the Internal Revenue Code as amended, to the extent that this compliance is not prohibited by this Article. (1981 (Reg. Sess., 1982), c. 1398, s. 6; 1985, c. 732, ss. 44, 61; 1985 (Reg. Sess., 1986), c. 1020, ss. 8, 20; 1989, c. 752, s. 22(b); 1999‑237, s. 28.29(a).)

 

§ 135‑40.1.� General definitions.

As used in Parts 2 and 3 of this Article, the following terms have the meaning specified as follows:

(1)������ Chemical Dependency. � The term "chemical dependency" means the pathological use or abuse of alcohol or other drugs in a manner or to a degree that produces an impairment in personal, social or occupational functioning and which may, but need not, include a pattern of tolerance and withdrawal.

(1a)���� Covered Services. � Any medically necessary, reasonable, and customary items of service, at least a portion of the expense of which is covered under at least one of the plans covering the person for whom claim is made or service provided. It shall be synonymous with allowable expenses, and with benefit or benefits.

(1b)���� Clinical Trials. � Patient research studies designed to evaluate new treatments, including prescription drugs. Regardless of the type of trial phases covered by the Plan, all covered trials must involve the treatment of life‑threatening medical conditions, must be clearly superior to available noninvestigational treatment alternatives, and must have clinical and preclinical data that shows the trials will be at least as effective as noninvestigational alternatives. Trials must also involve determinations by treating physicians, relevant scientific data, and opinions of experts in relevant fields of medicine. Covered trials must be approved by the National Institutes of Health, a National Institutes of Health cooperative group or center, the U. S. Food and Drug Administration, the U.S. Department of Defense, or the U.S. Department of Veterans Affairs. The Plan may also cover clinical trials sponsored by other entities. Trials must also be approved by applicable qualified institutional review boards. All covered trials must be conducted in and by facilities and personnel that maintain a high level of expertise because of their training, experience, and volume of patients. To be covered by the Plan, patients participating in clinical trials must meet substantially all protocol requirements of the trials and exercise informed consent in the trials. Only medically necessary costs of health care services involved in treatments provided to patients for the purpose of the trials are covered by the Plan to the extent that such costs are not customarily funded by national agencies, commercial manufacturers, distributors, or other such providers. Clinical trial costs not covered by the Plan include, but are not limited to, the costs of services that are not health care services and costs associated with managing research in the trials. The Plan shall not exclude benefits for covered clinical trials if the proposed treatment is the only appropriate protocol for the condition being treated.

(2)������ Deductible. � Deductible shall mean an amount of covered expenses during a fiscal year which must be incurred after which benefits (subject to the deductible) becomes payable. The deductible for an employee, retired employee and/or his or her dependents shall be three hundred fifty dollars ($350.00) for each fiscal year.

����������� The deductible applies separately to each covered individual in each fiscal year, subject to an aggregate maximum of one thousand fifty dollars ($1,050) per employee and child(ren) or employee and family coverage contract in any fiscal year.

����������� If two or more family members are injured in the same accident only one deductible is required for charges related to that accident during the benefit period.

(3)������ Dependent Child. � A natural, legally adopted, or foster child of the employee and/or spouse, unmarried, up to the first of the month following his or her 19th birthday, whether or not the child is living with the employee, as long as the employee is legally responsible for such child's maintenance and support. Dependent child shall also include any child under age 19 who has reached his or her 18th birthday, provided the employee was legally responsible for such child's maintenance and support on his or her 18th birthday.

����������� A foster child is covered (i) if living in a regular parent‑child relationship with the expectation that the employee will continue to rear the child into adulthood, (ii) if at the time of enrollment, or at the time a foster child relationship is established, whichever occurs first, the employee applies for coverage for such child and submits evidence of a bona fide foster child relationship, identifying the foster child by name and setting forth all relevant aspects of the relationship, (iii) if the Claims Processor accepts the foster child as a participant through a separate written document identifying the foster child by name and specifically recognizing the foster child relationship, and (iv) if at the time a claim is incurred, the foster child relationship, as identified by the employee, continues to exist. Children placed in a home by a welfare agency which obtains control of, and provides for maintenance of, the child(ren), are not eligible participants.

����������� Coverage may be extended beyond the 19th birthday under the following conditions:

a.�������� If the dependent is a full‑time student, between the ages of 19 and 26, who is pursuing a course of study that represents at least the normal workload of a full‑time student at a school or college accredited by the state of jurisdiction.

b.�������� The dependent is physically or mentally incapacitated to the extent that he or she is incapable of earning a living and (i) such handicap developed or began to develop before the dependent's 19th birthday, or (ii) such handicap developed or began to develop before the dependent's 26th birthday if the dependent was covered by the Plan in accordance with G.S. 135‑40.1(3)a.

Dependent children of firemen, rescue squad workers, and members of the national guard are subject to the same terms and conditions as are other dependent children covered by this subdivision.

(4)������ Doctor. � A doctor of medicine, a doctor of osteopathy licensed to practice medicine or surgery by the Board of Medical Examiners of the state in which he or she practices, a doctor of dentistry, a doctor of podiatry or surgical chiropody, a doctor of optometry, a doctor of chiropractic, or a doctor of psychology who is licensed or certified in the State and has a doctorate practice degree in psychology and at least two years' clinical experience in a recognized health setting or has met the standards of the National Register of Health Services Providers in Psychology, each of whom is licensed to practice by the state in which he or she performs any service covered by this Plan, and who regularly charges and collects fees in his or her own right.

(5)������ Employee. � Any permanent full‑time or permanent part‑time regular employee (designated as half‑time or more) of an employing unit.

(6)������ (Effective until June 30, 2006) Employing Unit. � A North Carolina School System; Community College; State Department, Agency or Institution; Administrative Office of the Courts; or Association or Examining Board whose employees are eligible for membership in a State‑Supported Retirement System. An employing unit also shall mean a charter school in accordance with Part 6A of Chapter 115C of the General Statutes whose board of directors elects to become a participating employer in the Plan under G.S. 135‑40.3A. Bona fide fire departments, rescue or emergency medical service squads, and national guard units are deemed to be employing units for the purpose of providing benefits under this Article. The North Carolina Symphony Society, Inc., is deemed to be an employing unit for the purpose of providing benefits under this Article.

(6)������ (Effective June 30, 2006) Employing Unit. � A North Carolina School System; Community College; State Department, Agency or Institution; Administrative Office of the Courts; or Association or Examining Board whose employees are eligible for membership in a State‑Supported Retirement System. An employing unit also shall mean a charter school in accordance with Part 6A of Chapter 115C of the General Statutes whose board of directors elects to become a participating employer in the Plan under G.S. 135‑40.3A. Bona fide fire departments, rescue or emergency medical service squads, and national guard units are deemed to be employing units for the purpose of providing benefits under this Article.

(7)������ Enrollment. � New employees must enroll themselves and their dependents within 30 days from the date of employment or from first becoming eligible on a noncontributory basis. Coverage may become effective on the first day of the month following date of entry on payroll or on the first day of the following month. New employees not enrolling themselves and their dependents within 30 days, or not adding dependents when first eligible as provided herein may enroll on the first day of any month but will be subject to a 12‑month waiting period for preexisting health conditions, except for employees who elect to change their coverage in accordance with rules established by the Executive Administrator and Board of Trustees for optional prepaid hospital and medical benefit plans. Children born to covered employees having coverage type (2), or (3), as outlined in G.S. 135‑40.3(d) shall be automatically covered at the time of birth without any waiting period for preexisting health conditions. Children born to covered employees having coverage type (1) shall be automatically covered at birth without any waiting period for preexisting health conditions so long as the Claims Processor receives notification within 30 days of the date of birth that the employee desires to change from coverage (1) to coverage type (2), or (3), provided that the employee pays any additional premium required by the coverage type selected retroactive to the first day of the month in which the child was born.

����������� Newly acquired dependents (spouse/child) enrolled within 30 days of becoming an eligible dependent will not be subject to the 12‑month waiting period for preexisting conditions. A dependent can become qualified due to marriage, adoption, entering a foster child relationship, due to the divorce of a dependent child or the death of the spouse of a dependent child, and at the beginning of each legislative session (applies only to enrolled legislators). Effective date for newly acquired dependents if application was made within the 30 days can be the first day of the following month. Effective date for an adopted child can be date of adoption, or date of placement in the adoptive parent's home, or the first of the month following the date of adoption or placement. Firemen, rescue squad workers, and members of the national guard, and their eligible dependents are subject to the same terms and conditions as are new employees and their dependents covered by this subdivision. Enrollments in these circumstances must occur within 30 days of eligibility to enroll.

(7a)���� Experimental/Investigational Medical Procedures. � The use of a service, supply, drug, or device not recognized as standard medical care for the condition, disease, illness, or injury being treated as determined by the Executive Administrator and Board of Trustees upon the advice of the Claims Processor. Determinations are made after independent review of scientific data. Opinions of experts in a particular field and opinions and assessments of nationally recognized review organizations shall also be considered by the Plan but are not determinative or conclusive. The fact that an experimental/investigational treatment is the only available treatment for a particular condition will not result in coverage if the treatment is experimental/investigational in the treatment of the particular condition, nor is it relevant for purposes of coverage that the member has tried other more conventional therapies without success. The following criteria are the basis for determination that a service or supply is investigational:

a.�������� Services or supplies requiring federal or other governmental body approval, such as drugs and devices that do not have market approval from the Food and Drug Administration (FDA) or final approval from any other governmental regulatory body for use in treatment of the condition being treated, or are not recognized for the treatment of a condition in one of the standard reference compendia or in generally accepted peer‑reviewed medical literature;

b.�������� There is insufficient or inconclusive scientific evidence in peer review medical literature to permit the Plan's evaluation of the therapeutic value of the service or supply;

c.�������� There is inconclusive evidence that the service or supply has a beneficial effect on health outcomes;

d.�������� Is provided as part of a research or phase I clinical or phase II clinical trial not approved by the Plan;

e.�������� Are provided pursuant to a written protocol or other document that lists an evaluation of the service's safety, toxicity, or efficacy as among its objectives;

f.��������� Are subject to approval or review of an Institutional Review Board or other body that approves or reviews research; or

g.�������� Are provided pursuant to informed consent documents that describe the service as experimental, investigational, or part of a research study.

(7b)���� Fiscal Year. � The period beginning July 1 and ending on June 30 of the succeeding calendar year.

(7c)���� Firemen. � Eligible firemen as defined by G.S. 58‑86‑25 who belong to a bona fide fire department as defined by G.S. 58‑86‑25 and who are not eligible for any type of comprehensive group health insurance or other comprehensive group health benefit coverage and who have been without any form of group health insurance or other comprehensive group health benefit coverage for at least six months. Firemen shall also include members of the North Carolina Firemen and Rescue Squad Workers' Pension Fund who are in receipt of a monthly pension, who are not eligible for any type of comprehensive group health insurance or other comprehensive group health benefit coverage, and who have been without any form of group health insurance or other comprehensive group health benefit coverage for at least six months. Comprehensive group health insurance and other benefit coverage consists of inpatient and outpatient hospital and medical benefits, as well as other outpatient medical services, prescription drugs, medical supplies, and equipment that are generally available in the health insurance market. Comprehensive group health insurance and other benefit coverage includes Medicare benefits, CHAMPUS benefits, and other Uniformed Services benefits. North Carolina fire departments or their respective governing bodies shall certify the eligibility of their firemen to the Plan for their participation in its benefits prior to enrollment.

(8)������ Health Benefits Representative. � The employee designated by the employing unit to administer the Comprehensive Major Medical Plan for the unit and its employees. The HBR is responsible for enrolling new employees, reporting changes, explaining benefits, reconciling group statements and remitting group fees. The State Retirement System is the Health Benefits Representative for retired members.

(9)������ Home Health Aide. � An individual who provides medical or therapeutic care and who reports to and is under the direct supervision of a Home Health Care Agency.

(10)���� Home Health Care Agency. � An agency which is constituted, licensed and operated in accordance with the laws pertaining to agencies providing home health care.

(11)���� Home Health Care Coverage. � Coverage for home care and treatment established and approved in writing by a physician for an individual whom continual hospital confinement would be required without the care and treatment specified by this coverage.

(12)���� Hospital. � An institution which meets fully all the following criteria:

a.�������� A general medical and surgical hospital, including eye, ear, nose and throat, maternity, pediatric, tuberculosis, or mental hospital, licensed as such by the applicable State agency.

b.�������� It is primarily engaged in providing � for compensation from its patients and on an inpatient basis � diagnostic and therapeutic facilities for the surgical and medical diagnosis, treatment and care of injured and sick persons by or under the supervision of the staff of physicians;

c.�������� It continuously provides 24‑hour‑a‑day nursing service by registered graduate nurses; and

d.�������� It is not, other than incidentally, a place for rest, a place for the aged, a place for drug addicts, a place for alcoholics, a nursing home, a hotel, or the like.

Hospitals classified and accredited as psychiatric hospitals by the Joint Commission on Accreditation of Healthcare Organizations will be deemed to be hospitals for the purpose of this Plan.

(13)���� Medicare. � The Health Insurance for the Aged and Disabled Program under Title XVIII of the Social Security Act as such act was amended by the Social Security Amendments of 1965 (Public Law 89‑97), as such program is currently constituted and as it may be later amended.

(13a)�� Plan. � The Teachers' and State Employees' Comprehensive Major Medical Plan.

(13b)�� National guard members. � Members of the North Carolina army and air national guard who are not eligible for any type of comprehensive group health insurance or other comprehensive group health benefit coverage and who have been without any form of group health insurance or other comprehensive group health benefit coverage for at least six months. Members of the North Carolina army and air national guard include those who are actively serving in the national guard as well as former members of the national guard who have completed 20 or more years of service in the national guard but have not attained the minimum age to begin receipt of a uniformed service military retirement benefit. Comprehensive group health insurance and other benefit coverage consists of inpatient and outpatient hospital and medical benefits, as well as other outpatient medical services, prescription drugs, medical supplies, and equipment that are generally available in the health insurance market. Comprehensive group health insurance and other benefit coverage includes Medicare benefits, Civilian Health and Medical Program of the Uniformed Services (CHAMPUS) benefits, and other Uniformed Services benefits. North Carolina national guard units shall certify the eligibility of their members to the Plan for their participation in its benefits prior to enrollment.

(14)���� Predecessor Plan. � The Hospital and Medical Benefits for the Teachers' and State Employees' Retirement System of the State of North Carolina.

(15)���� Preexisting Condition. � A condition, disease, illness or injury diagnosed and treated within six months prior to the effective date of coverage.

(16)���� Pregnancy. � Shall include resulting childbirth, miscarriage or abortion.

(16a)�� Rescue squad workers. � Eligible rescue squad workers as defined by the provisions of G.S. 58‑86‑30 who belong to a rescue or emergency medical services squad as defined by the same statute and who are not eligible for any type of comprehensive group health insurance or other comprehensive group health benefit coverage, and who have been without any form of group health insurance or other comprehensive group health benefit coverage for at least six months. Rescue squad workers shall also include members of the North Carolina Firemen and Rescue Squad Workers' Pension Fund who are in receipt of a monthly pension, who are not eligible for any type of comprehensive group health insurance or other comprehensive group health benefit coverage, and who have been without any form of group health insurance or other comprehensive group health benefit coverage for at least six months. Comprehensive group health insurance and other benefit coverage consists of inpatient and outpatient hospital and medical benefits, as well as other outpatient medical services, prescription drugs, medical supplies, and equipment that are generally available in the health insurance market. Comprehensive group health insurance and other benefit coverage includes Medicare benefits, CHAMPUS benefits, and other Uniformed Services benefits. North Carolina rescue or emergency medical services squads or their respective governing bodies shall certify the eligibility of their rescue squad workers to the Plan for their participation in its benefits prior to enrollment.

(17)���� Retired Employee (Retiree). � Retired teachers, State employees, and members of the General Assembly who are receiving monthly retirement benefits from any retirement system supported in whole or in part by contributions of the State of North Carolina, so long as the retiree is enrolled. On and after January 1, 1988, a retiring employee or retiree must have completed at least five years of contributory retirement service with an employing unit prior to retirement from any State‑supported retirement system in order to be eligible for group benefits under this Part as a retired employee or retiree.

(17a)�� Skilled Care. � Medically necessary services that can only be rendered under State law or regulation by licensed health professionals such as a medical doctor, physician's assistant, physical therapist, occupational therapist, speech therapist, certified clinical social worker, licensed clinical social worker, certified nurse midwife, licensed practical nurse, or registered nurse.

(18)���� Skilled Nursing Facility. � An institution licensed under applicable State laws and primarily engaged in providing to inpatients, under the supervision of a doctor and a registered professional nurse, skilled nursing care and related services on a 24‑hour basis, and rehabilitative services.

(19)���� Usual, Customary and Reasonable. � The meaning of the term "UCR" shall be developed from criteria used for determining reasonable charges for services, including usual preoperative examination and customary postoperative care and care of usual complications, and shall be based on the usual charge made by an individual doctor for his or her private patients for a particular service, or the customary charge within the range of usual fees charged by most doctors of similar skill and training in North Carolina for the comparable service, whichever is the lower. A fee is reasonable if it meets the above two criteria. In cases of unusual complexity and cases involving supplemental skills of two or more doctors, reasonable charges will be determined by the Claims Processor upon advice of its medical advisors. The Executive Administrator and Board of Trustees may update usual, customary and reasonable charges, or other such comparable allowances, semi‑annually for physicians who accept the Plan's UCR or other comparable allowances as payment in full, other than for the Plan's deductibles, coinsurance, or other amounts to be paid by members of the Plan; otherwise, the Executive Administrator and Board of Trustees shall not update usual, customary and reasonable charges, or other such comparable allowances more frequently than on an annual basis. (1981 (Reg. Sess., 1982), c. 1398, s. 6; 1983, c. 922, ss. 4, 21.1, 21.2, 21.7; 1983 (Reg. Sess., 1984), c. 1110, s. 10; 1985, c. 192, ss. 7, 16.1, 16.2; c. 732, ss. 12, 19, 25, 26; 1985 (Reg. Sess., 1986), c. 1020, ss. 5(a), 9, 20, 24, 27; 1987, c. 564, s. 17; c. 857, ss. 9, 10; 1989, c. 752, s. 22(c), (d); 1991, c. 427, ss. 1(a), 9, 18, 36; 1995 (Reg. Sess., 1996), c. 731, s. 3; 1996, 2nd Ex. Sess., c. 18, s. 28.23(a); 1997‑456, s. 27; 1997‑512, ss. 1, 2, 9, 12, 16, 18; 1998‑212, ss. 9.14A(d), 28.29(a), (b); 1999‑237, s. 28.29(b)‑(e); 2001‑253, s. 1(b); 2001‑487, s. 40(m); 2004‑124, s. 31.21(a); 2005‑276, s. 29.31(e).)

 

§ 135‑40.2.� Eligibility.

(a)������ The following persons are eligible for coverage under the Plan, on a noncontributory basis, subject to the provisions of G.S. 135‑40.3:

(1)������ All permanent full‑time employees of an employing unit who meet the following conditions:

a.�������� Paid from general or special State funds, or

b.�������� Paid from non‑State funds and in a group for which his or her employing unit has agreed to provide coverage.

Employees of State agencies, departments, institutions, boards, and commissions not otherwise covered by the Plan who are employed in permanent job positions on a recurring basis and who work 30 or more hours per week for nine or more months per calendar year are covered by the provisions of this subdivision.

(1a)���� Permanent hourly employees as defined in G.S. 126‑5(c4) who work at least one‑half of the workdays of each pay period.

(2)������ Retired teachers, State employees, members of the General Assembly, and retired State law enforcement officers who retired under the Law Enforcement Officers' Retirement System prior to January 1, 1985.

(2a)���� Surviving spouses of:

a.�������� Deceased retired employees, provided the death of the former plan member occurred prior to October 1, 1986; and

b.�������� Deceased teachers, State employees, and members of the General Assembly who are receiving a survivor's alternate benefit under any of the State‑supported retirement programs, provided the death of the former plan member occurred prior to October 1, 1986.

(3)������ Repealed by Session Laws 1985 (Reg. Sess., 1986), c. 1020, s. 29(b).

(3a)���� Employees of the General Assembly, not otherwise covered by this section, as determined by the Legislative Services Commission, except for legislative interns and pages.

(4)������ Members of the General Assembly.

(5)������ Notwithstanding the provisions of subsection (e) of this section, employees on official leave of absence while completing a full‑time program in school administration in an approved program as a Principal Fellow in accordance with Article 5C of Chapter 116 of the General Statutes.

(6)������ Notwithstanding the provisions of G.S. 135‑40.11, employees formerly covered by the provisions of this section, other than retired employees, who have been employed for 12 or more months by an employing unit and whose jobs are eliminated because of a reduction, in total or in part, in the funds used to support the job or its responsibilities, provided the employees were covered by the Plan at the time of separation from service resulting from a job elimination. Employees covered by this subsection shall be covered for a period of up to 12 months following a separation from service because of a job elimination.

(7)������ Any member enrolled pursuant to subdivision (1) or (1a) of this subsection who is on approved leave of absence with pay or receiving workers' compensation.

(8)������ Employees on approved Family and Medical Leave.

(a1)���� Repealed by Session Laws 2000‑141, s. 6(b), effective August 2, 2000, and by Session Laws 2000‑184, s. 1(b), effective August 1, 2000.

(a2)���� (Effective until June 30, 2006) The following persons are eligible for coverage under the Plan on a partially contributory basis, subject to the provisions of G.S. 130‑40.3:

(1)������ A school employee in a job‑sharing position as defined in G.S. 115C‑326.5(b). If these employees elect to participate in the Plan, the employing unit shall pay fifty percent (50%) of the Plan's total noncontributory premiums. Individual employees shall pay the balance of the total noncontributory premiums not paid by the employing unit.

(2)������ Employees of the North Carolina Symphony Society, Inc., their eligible spouses, and eligible dependent children.

(a2)���� (Effective June 30, 2006) A school employee in a job‑sharing position as defined in G.S. 130‑40.3. If these employees elect to participate in the Plan, the employing unit shall pay fifty percent (50%) of the Plan's total noncontributory premiums. Individual employees shall pay the balance of the total noncontributory premiums not paid by the employing unit.

(b)������ The following person shall be eligible for coverage under the Plan, on a fully contributory basis, subject to the provisions of G.S. 135‑40.3:

(1)������ Repealed by Session Laws 1983, c. 761, s. 255.

(2)������ Former members of the General Assembly who enroll before October 1, 1986.

(2a)���� For enrollments after September 30, 1986, former members of the General Assembly if covered under the Plan at termination of membership in the General Assembly. To be eligible for coverage as a former member of the General Assembly, application must be made within 30 days of the end of the term of office. Only members of the General Assembly covered by the Plan at the end of the term of office are eligible. If application is not made within the specified time period, the member forfeits eligibility.

(3)������ Surviving spouses of deceased former members of the General Assembly who enroll before October 1, 1986.

(3a)���� Employees of the General Assembly, not otherwise covered by this section, as determined by the Legislative Services Commission, except for legislative interns and pages.

(3b)���� For enrollments after September 30, 1986, surviving spouses of deceased former members of the General Assembly, if covered under the Plan at the time of death of the former member of the General Assembly.

(4)������ All permanent part‑time employees (designated as half‑time or more) of an employing unit who meets the conditions outlined in subdivision (a)(1)a above, and who are not covered by the provisions of G.S. 135‑40.2(a)(1).

(4a)���� Repealed by Session Laws 1997‑512, s. 22.

(5)������ The spouses and eligible dependent children of enrolled teachers, State employees, retirees, former members of the General Assembly, former employees covered by the provisions of G.S. 135‑40.2(a)(6), Disability Income Plan beneficiaries, enrolled continuation members, and members of the General Assembly. Spouses of surviving dependents are not eligible, nor are dependent children if they were not covered at the time of the member's death. Surviving spouses may cover their dependent children provided the children were enrolled at the time of the member's death or enroll within 30 days of the member's death.

(6)������ Blind persons licensed by the State to operate vending facilities under contract with the Department of Health and Human Services, Division of Services for the Blind and its successors, who are:

a.�������� Operating such a vending facility;

b.�������� Former operators of such a vending facility whose service as an operator would have made these operators eligible for an early or service retirement allowance under Article 1 of this Chapter had they been members of the Retirement System; and

c.�������� Former operators of such a vending facility who attain five or more years of service as operators and who become eligible for and receive a disability benefit under the Social Security Act upon cessation of service as an operator.

Spouses, dependent children, surviving spouses, and surviving dependent children of such members are not eligible for coverage.

(7)������ Repealed by Session Laws 1985 (Reg. Sess., 1986), c. 1020, s. 29(j).

(8)������ Surviving spouses of deceased retirees and surviving spouses of deceased teachers, State employees, and members of the General Assembly provided the death of the former Plan member occurred after September 30, 1986, and the surviving spouse was covered under the Plan at the time of death.

(9)������ Repealed by Session Laws 1987, c. 857, s. 11.1.

(10)���� Any eligible dependent child of the deceased retiree, teacher, State employee, member of the General Assembly, former member of the General Assembly, or Disability Income Plan beneficiary, provided the child was covered at the time of death of the retiree, teacher, State employee, member of the General Assembly, former member of the General Assembly, or Disability Income Plan beneficiary, (or was in posse at the time and is covered at birth under this Part), or was covered under the Plan on September 30, 1986. An eligible surviving dependent child can remain covered until age 19, or age 26 if a full‑time student, or indefinitely if certified as incapacitated under G.S. 135‑40.1(3)b.

(11)���� Repealed by Session Laws 2000‑141, s. 6(b), effective August 2, 2000, and by Session Laws 2000‑184, s. 1(b), effective August 1, 2000.

(12)���� Notwithstanding the provisions of G.S. 135‑40.11, former employees covered by the provisions of G.S. 135‑40.2(a)(6), and their spouses and eligible dependent children who were covered by the Plan at the time of the former employees' separation from service pursuant to G.S. 135‑40.2(a)(6), following expiration of the former employees' coverage provided by G.S. 135‑40.2(a)(6). Election of coverage under this subdivision shall be made within 90 days after the termination of coverage provided under G.S. 135‑40.2(a)(6).

(13)���� Firemen, rescue squad workers, and members of the national guard, their eligible spouses, and eligible dependent children.

(c)������ No person shall be eligible for coverage as a dependent if eligible as an employee or retired employee, except when a spouse is eligible on a fully contributory basis. In addition, no person shall be eligible for coverage as a dependent of more than one employee or retired employee at the same time.

(d)������ Former employees who are receiving disability retirement benefits or disability income benefits pursuant to Article 6 of Chapter 135 of the General Statutes, provided the former employee has at least five years of retirement membership service, shall be eligible for the benefit provisions of this Plan, as set forth in this Part, on a noncontributory basis. Such coverage shall terminate as of the end of the month in which such former employee is no longer eligible for disability retirement benefits or disability income benefits pursuant to Article 6 of this Chapter.

(e)������ Employees on official leave of absence without pay may elect to continue this group coverage at group cost provided that they pay the full employee and employer contribution through the employing unit during the leave period.

(f)������� For the support of the benefits made available to any member vested at the time of retirement, their spouses or surviving spouses, and the surviving spouses of employees who are receiving a survivor's alternate benefit under G.S. 135‑5(m) of those associations listed in G.S. 135‑27(a), licensing and examining boards under G.S. 135‑1.1, the North Carolina Art Society, Inc., and the North Carolina Symphony Society, Inc., each association, organization or board shall pay to the Plan the full cost of providing these benefits under this section as determined by the Board of Trustees of the Teachers' and State Employees' Comprehensive Major Medical Plan. In addition, each association, organization or board shall pay to the Plan an amount equal to the cost of the benefits provided under this section to presently retired members of each association, organization or board since such benefits became available at no cost to the retired member.

(g)������ An eligible surviving spouse and any eligible surviving dependent child of a deceased retiree, teacher, State employee, member of the General Assembly, former member of the General Assembly, or Disability Income Plan beneficiary shall be eligible for group benefits under this section without waiting periods for preexisting conditions provided coverage is elected within 90 days after the death of the former plan member. Coverage may be elected at a later time, but will be subject to the 12‑month waiting period for preexisting conditions and will be effective the first day of the month following receipt of the application.

(h)������ No person shall be eligible for coverage as an employee or retired employee or as a dependent of an employee or retired employee upon a finding by the Executive Administrator or Board of Trustees or by a court of competent jurisdiction that the employee or dependent knowingly and willfully made or caused to be made a false statement or false representation of a material fact in a claim for reimbursement of medical services under the Plan. The Executive Administrator and Board of Trustees may make an exception to the provisions of this subsection when persons subject to this subsection have had a cessation of coverage for a period of five years and have made a full and complete restitution to the Plan for all fraudulent claim amounts. Nothing in this subsection shall be construed to obligate the Executive Administrator and Board of Trustees to make an exception as allowed for under this subsection.

(i)������� Any employee receiving benefits pursuant to Article 6 of this Chapter when the employee has less than five years of retirement membership service, or an employee on leave without pay due to illness or injury for up to 12 months, is entitled to continued coverage under the Plan for the employee and any eligible dependents by paying one hundred percent (100%) of the cost. (1981 (Reg. Sess., 1982), c. 1398, s. 6; 1983, c. 499; c. 761, ss. 252‑255; c. 867, s. 4; c. 922, s. 5; 1985, c. 400, ss. 5, 6; 1985 (Reg. Sess., 1986), c. 1020, s. 29(a)‑(l); 1987, c. 738, ss. 29(n), 36(a), 36(b); c. 809, ss. 3, 4; c. 857, ss. 11(a), 11.1, 11.2, 12; 1989, c. 752, s. 22(e), (f); 1989 (Reg. Sess., 1990), c. 1074, s. 22(a); 1993, c. 321, s. 85(b); 1995, c. 278, s. 1; c. 507, ss. 7.21(a)‑(c), 7.28(a)‑(c); 1997‑443, s. 11A.118(a); 1997‑512, ss. 17, 19‑27; 1999‑237, s. 28.29(f); 2000‑141, ss. 6(a), (b); 2000‑184, ss. 1(a),(b), 3; 2001‑487, s. 86(a); 2002‑174, s. 4; 2003‑358, s. 4; 2004‑124, s. 31.21(b); 2004‑199, s. 34(b); 2005‑276, s. 29.31(e).)

 

§ 135‑40.3.� Effective dates of coverage.

(a)������ Employees and Retired Employees. �

(1)������ Employees and retired employees covered under the Predecessor Plan will continue to be covered, subject to the terms hereof.

(2)������ New employees may apply for coverage to be effective on the first day of the month following employment, or on a like date the following month if the employee has enrolled.

(3)������ Employees not enrolling or adding dependents when first eligible in accordance with G.S. 135‑40.1(7) may enroll later on the first of any following month but will be subject to a 12‑month waiting period for a preexisting health condition, except employees who elect to change their coverage in accordance with rules adopted by the Executive Administrator and Board of Trustees for optional prepaid hospital and medical benefit plans.

(4)������ Members of the General Assembly, beginning with the 1985 Session, shall become first eligible with the convening of each Session of the General Assembly, regardless of a Member's service during previous Sessions. Members and their dependents enrolled when first eligible after the convening of each Session of the General Assembly will not be subject to any waiting periods for preexisting health conditions. Members of the 1983 Session of the General Assembly, not already enrolled, shall be eligible to enroll themselves and their dependents on or before October 1, 1983, without being subject to any waiting periods for preexisting health conditions.

(b)������ Waiting Periods and Preexisting Conditions. �

(1)������ New employees and dependents enrolling when first eligible are subject to no waiting period for preexisting conditions under the Plan.

(2)������ Employees not enrolling or not adding dependents when first eligible may enroll later on the first of any following month, but will be subject to a twelve‑month waiting period for preexisting conditions except as provided in subdivision (a)(3) of this section.

(3)������ Retiring employees and dependents enrolled when first eligible after an employee's retirement are subject to no waiting period for preexisting conditions under the Plan. Retiring employees not enrolled or not adding dependents when first eligible after an employee's retirement may enroll later on the first of any following month, but will be subject to a 12‑month waiting period for preexisting conditions except as provided in subdivision (a)(3) of this section.

(4)������ Employees and dependents enrolling or reenrolling within 12 months after a termination of enrollment or employment that were not enrolled at the time of this previous termination, regardless of the employing units involved, shall not be considered as newly‑eligible employees or dependents for the purposes of waiting periods and preexisting conditions. Employees and dependents transferring from optional prepaid plans in accordance with G.S. 135‑39.5B; employees and dependents immediately returning to service from an employing unit's approved periods of leave without pay for illness, injury, educational improvement, workers' compensation, parental duties, or for military reasons; employees and dependents immediately returning to service from a reduction in an employing unit's work force; retiring employees and dependents reenrolled in accordance with G.S. 135‑40.3(b)(3); formerly‑enrolled dependents reenrolling as eligible employees; formerly‑enrolled employees reenrolling as eligible dependents; and employees and dependents reenrolled without waiting periods and preexisting conditions under specific rules and regulations adopted by the Executive Administrator and Board of Trustees in the best interests of the Plan shall not be considered reenrollments for the purpose of this subdivision. Furthermore, employees accepting permanent, full‑time appointments who had previously worked in a part‑time or temporary position and their qualified dependents shall not be covered by waiting periods and preexisting conditions under this division provided enrollment as a permanent, full‑time employee is made when the employee and his dependents are first eligible to enroll.

(5)������ To administer the 12‑month waiting period for preexisting conditions under this Article, the Plan must give credit against the 12‑month period for the time that a person was covered under a previous plan if the previous plan's coverage was continuous to a date not more than 63 days before the effective date of coverage. As used in this subdivision, a "previous plan" means any policy, certificate, contract, or any other arrangement provided by any accident and health insurer, any hospital or medical service corporation, any health maintenance organization, any preferred provider organization, any multiple employer welfare arrangement, any self‑insured health benefit arrangement, any governmental health benefit or health care plan or program, or any other health benefit arrangement.

(c)������ Dependents of Employees and Retired Employees. �

(1)������ Dependents of employees and retired employees who have family coverage under the Predecessor Plan will continue to be covered subject to the terms hereof.

(2)������ Employees who have dependents may apply for family coverage at the time they enroll as provided in subdivisions (a)(2) and (a)(3) and such dependents will be covered under the Plan beginning the same date as such employees.

(3)������ Employees and retired employees may change from individual or parent/child(ren) coverage to parent/child(ren) or family coverage or add dependents to existing family or parent/child(ren) coverage upon acquiring a dependent without a waiting period for preexisting conditions, and such dependents will be covered under the Plan the first of the month or the first of the second month following the dependent's eligibility for coverage, provided written application is submitted to the Health Benefits Representative within 30 days of becoming eligible.

(4)������ Employees or retired employees who wish to change from family coverage to parent/child(ren) or individual or from parent/child(ren) to individual coverage shall give written notice to their Health Benefits Representative within 30 days after any change in the status of dependents, (resulting from death, divorce, etc.) that requires a change in contract type. The effective date will be the first of the month following the dependent's ineligibility event. If notification was not made within the 30 days following the dependent's ineligibility event, the dependent will be retroactively removed the first of the month following the dependent's ineligibility event, and the coverage type change will be the first of the month following written notification, except in cases of death, in which case the coverage type change will be made retroactive to the first of the month following the death.

(5)������ Employees not adding dependents when first eligible may enroll later on the first of any following month, but dependents will be subject to a 12‑month waiting period for preexisting health conditions except as provided in subdivision (a)(3) of this section.

(6)������ Employees or retired employees who wish to change from family to parent/child(ren) or individual coverage or from parent/child(ren) to individual coverage, even though their dependents continue to be eligible, shall give written notification to their Health Benefits Representative. Effective date of this type change will be the first of the month following written notification or any first of the month thereafter as desired by the employee.

(7)������ The effective date for newborns or adopted children will be date of birth, date of adoption, or placement with adoptive parent provided member is currently covered under a family or parent/child(ren) coverage. If the member wishes to add a newborn or adopted child and is currently enrolled on individual coverage, the member must submit application for coverage and a coverage type change within 30 days of the child's birth or date of adoption or placement. Effective date for the coverage type change is the first of the month in which the child is born, adopted, or placed. Adopted children may also be covered the first of the month following placement or adoption.

(d)������ Types of Coverage Available. � There are three types of coverage which an employee or retiree may elect.

(1)������ Employee Only. � Covers enrolled employees only. Maternity benefits are provided to employee only.

(2)������ Employee and Child(ren). � Covers enrolled employee and all eligible dependent children. Maternity benefits are provided to the employee only.

(3)������ Employee and Family. � Covers employee and spouse, and all eligible dependent children. Maternity benefits are provided to employee or enrolled spouse.

(4),����� (5) Repealed by Session Laws 1985 (Reg. Sess., 1986), c. 1020, s. 5(b).

(e)������ Notwithstanding any other provision of this section, no coverage under the Plan shall become effective prior to the payment of premiums required by the Plan.

(f)������� Firemen, rescue squad workers, and members of the national guard are subject to the same terms and conditions of this section as are employees. Eligible dependents of firemen, rescue squad workers, and members of the national guard are subject to the same terms and conditions of this section as are dependents of employees. (1981 (Reg. Sess., 1982), c. 1398, s. 6; 1983, c. 499; c. 761, ss. 252‑255; c. 867, s. 4; c. 922, s. 5; 1985, c. 400, ss. 5, 6; 1985 (Reg. Sess., 1986), c. 1020, ss. 5(b), 20; 1987, c. 857, s. 13; 1991, c. 427, ss. 10‑12; 1996, 2nd Ex. Sess., c. 18, s. 28.23(b); 1997‑512, ss. 28‑31, 40; 1999‑237, s. 28.29(g).)

 

§ 135‑40.3A.� Optional participation for charter schools operated by private nonprofit corporations.

(a)������ The board of directors of each charter school operated by a private nonprofit corporation shall elect whether to become a participating employer in the Plan in accordance with this Article. This election shall be in writing, shall be made no later than 30 days after this section becomes law, and shall be filed with the Executive Administrator and Board of Trustees and with the State Board of Education. For each charter school employee who is employed on or before the date the board makes the election, membership in the Plan is effective as of the date the board makes the election. For each charter school employee who is employed after the date the board makes the election, membership in the Plan is effective as of the date of that employee's entry into eligible service. This subsection applies only to charter schools that received State Board of Education approval under G.S. 115C‑238.29D in 1997 or 1998.

(b)������ No later than 30 days after both parties have signed the written charter under G.S. 115C‑238.29E, the board of directors of a charter school operated by a private nonprofit corporation shall elect whether to become a participating employer in the Plan in accordance with this Article. This election shall be in writing and filed with the Executive Administrator, the Board of Trustees, and the State Board of Education. This election is effective for each charter school employee as of the date of that employee's entry into eligible service. This subsection applies to charter schools that receive State Board of Education approval under G.S. 115C‑238.29D after 1998.

(c)������ A board's election to become a participating employer in the Plan under this section is irrevocable and shall require all eligible employees of the charter school to participate.

(d)������ If a charter school's board of directors does not elect to become a participating employer in the Plan under this section, that school's employees and the dependents of those employees are not eligible for any benefits under the Plan on account of employment with a charter school.

(e)������ The board of directors of each charter school shall notify each of its employees as to whether the board elected to become a participating employer in the Plan under this section. This notification shall be in writing and shall be provided within 30 days of the board's election or at the time an initial offer for employment is made, whichever occurs last. If the board did not elect to become a participating employer in the Plan, the notice shall include a statement that the employee shall have no legal recourse against the board or the State for any possible benefit under the Plan. The employee shall provide written acknowledgment of the employee's receipt of the notification under this subsection. (1998‑212, s. 9.14A(e).)

 

§ 135‑40.4.� Benefits in general.

(a)������ In the event a covered person, as a result of accidental bodily injury, disease or pregnancy, incurs covered expenses, the Plan will pay benefits up to the amounts described in G.S. 135‑40.5 through G.S. 135‑40.9.

The Plan is divided into two parts. The first part includes certain benefits which are not subject to a deductible or coinsurance. The second part is a comprehensive plan and includes those benefits which are subject to both a three hundred fifty dollar ($350.00) deductible for each covered individual to an aggregate maximum of one thousand fifty dollars ($1,050) per employee and child(ren) or employee and family coverage contract and coinsurance of 80%/20%. There is a limit on out‑of‑pocket expenses under the second part.

Notwithstanding the provisions of this Article, the Executive Administrator and Board of Trustees of the Teachers' and State Employees' Comprehensive Major Medical Plan may contract with providers of institutional and professional medical care and services to established preferred provider networks. The terms pertaining to reimbursement rates or other terms of consideration of any contract between hospitals, hospital authorities, doctors or other medical providers, an optional program contract authorized under G.S. 135‑39.5B(b), or a pharmacy benefit manager and the Plan shall not be a public record under Chapter 132 of the General Statutes for a period of thirty months after the date of the expiration of the contract. Provided, however, nothing in this subsection shall be deemed to prevent or restrict the release of any information made not a public record under this subsection to the State Auditor, the Attorney General, the Director of the State Budget, the Plan's Executive Administrator, and the Committee on Employee Hospital and Medical Benefits solely and exclusively for their use in the furtherance of their duties and responsibilities. The design, adoption, and implementation of the preferred provider contracts and networks are not subject to the requirements of Chapter 143 of the General Statutes, provided that for any hospital preferred provider network all hospitals will have an opportunity to contract with the Plan if they meet the contract requirements. The Executive Administrator and Board of Trustees shall, under the provisions of G.S. 135‑39.5(12), pursue such preferred provider contracts on a timely basis and shall make reports as requested to the President of the Senate, the President Pro Tempore of the Senate, the Speaker of the House of Representatives, and the Committee on Employee Hospital and Medical Benefits on its progress in negotiating the preferred provider contracts. The Executive Administrator and Board of Trustees shall implement a refined diagnostic‑related grouping or diagnostic‑related grouping‑based reimbursement system for hospitals as soon as practicable, but no later than January 1, 1995.

(b)������ As used in this section the term "preferred provider contracts or networks" includes, but is not limited to, a refined diagnostic‑related grouping or diagnostic‑related grouping‑based system of reimbursement for hospitals. (1981 (Reg. Sess., 1982), c. 1398, s. 6; 1983, c. 922, s. 21.8; 1985, c. 192, ss. 1, 13, 14; c. 732, s. 64; 1991, c. 427, s. 19; 1993, c. 547, s. 1; 2001‑253, s. 1(c); 2001‑516, s. 4; 2005‑276, s. 29.33(b).)

 

§ 135‑40.5.� Benefits not subject to deductible or coinsurance.

(a)������ Repealed by Session Laws 1985, c. 192, s. 5.

(b)������ Repealed by Session Laws 1991, c. 427, s. 20.

(c)������ Preadmission Testing. � The Plan will pay one hundred percent (100%) of reasonable and customary charges for diagnostic, laboratory and x‑ray examinations performed on an outpatient basis.

(d)������ Repealed by Session Laws 2001‑253, s. 1(d), effective July 1, 2001.

(e)������ Routine Diagnostic Examinations. � The Plan will pay one hundred percent (100%) of allowable charges for routine diagnostic examinations and tests, including breast, colon, rectal, and prostate exams, X rays, blood and blood pressure checks, urine tests, tuberculosis tests, and general health checkups that are medically necessary for the maintenance and improvement of individual health but no more often than once every three years for covered individuals to age 40 years, once every two years for covered individuals to age 50 years, and once a year for covered individuals age 50 years and older, unless a more frequent occurrence is warranted by a medical condition when such charges are incurred in a medically supervised facility. The Plan will pay one hundred percent (100%) of allowable charges for mammograms once per year for covered individuals age 40 years and over, and not more often than once every three years for covered individuals to age 40 years, when such charges are incurred in a medically supervised facility. Routine diagnostic examinations and tests covered under this subsection also include examinations and tests for the screening for the early detection of cervical cancer. The coverage shall be in accordance with the most recently published American Cancer Society guidelines or guidelines adopted by the North Carolina Advisory Committee on Cancer Coordination and Control for any covered female. For the purposes of this subsection, "examinations and laboratory tests for the screening for the early detection of cervical cancer" means conventional PAP smear screening, liquid‑based cytology, and human papilloma virus (HPV) detection methods for women with equivocal findings on cervical cytologic analysis that are subject to the approval of and have been approved by the United States Food and Drug Administration. Provided, however, that charges for such examinations and tests are not covered by the Plan when they are incurred to obtain or continue employment, to secure insurance coverage, to comply with legal proceedings, to attend schools or camps, to meet travel requirements, to participate in athletic and related activities, or to comply with governmental licensing requirements. The maximum amount payable under this subsection for a covered individual is one hundred fifty dollars ($150.00) per fiscal year.

(f)������� Immunizations. � The Plan will pay one hundred percent (100%) of allowable charges for immunizations for the prevention of contagious diseases as generally accepted medical practices would dictate when directed by an attending physician.

(g)������ Prescription Drugs. � The Plan's allowable charges for prescription legend drugs to be used outside of a hospital or skilled nursing facility are to be determined by the Plan's Executive Administrator and Board of Trustees. The Plan will pay allowable charges for each outpatient prescription drug less a copayment to be paid by each covered individual equal to the following amounts: pharmacy charges up to ten dollars ($10.00) for each generic prescription, twenty five dollars ($25.00) for each branded prescription, and forty dollars ($40.00) for each branded prescription with a generic equivalent drug, and fifty dollars ($50.00) for each branded or generic prescription not on a formulary used by the Plan. Allowable charges shall not be greater than a pharmacy's usual and customary charge to the general public for a particular prescription. Prescriptions shall be for no more than a 34‑day supply for the purposes of the copayments paid by each covered individual. By accepting the copayments and any remaining allowable charges provided by this subsection, pharmacies shall not balance bill an individual covered by the Plan. A prescription legend drug is defined as an article the label of which, under the Federal Food, Drug, and Cosmetic Act, is required to bear the legend: "Caution: Federal Law Prohibits Dispensing Without Prescription." Such articles may not be sold to or purchased by the public without a prescription order. Benefits are provided for insulin even though a prescription is not required. The Plan may use a pharmacy benefit manager to help manage the Plan's outpatient prescription drug coverage. In managing the Plan's outpatient prescription drug benefits, the Plan and its pharmacy benefit manager shall not provide coverage for erectile dysfunction, growth hormone, antiwrinkle, weight loss, and hair growth drugs unless such coverage is medically necessary to the health of the member. The Plan and its pharmacy benefit manager shall not provide coverage for growth hormone and weight loss drugs and antifungal drugs for the treatment of nail fungus and botulinium toxin without approval in advance by the pharmacy benefit manager. Any formulary used by the Plan's Executive Administrator and pharmacy benefit manager shall be an open formulary. Plan members shall not be assessed more than two thousand five hundred dollars ($2,500) per person per fiscal year in copayments required by this subsection. (1981 (Reg. Sess., 1982), c. 1398, s. 6; 1983, c. 922, s. 7; 1985, c. 192, ss. 5, 9, 12; c. 732, ss. 16‑18; 1985 (Reg. Sess., 1986), c. 1020, ss. 10, 20; 1987, c. 857, s. 14; 1991, c. 427, ss. 13, 20; 1995, c. 507, s. 7.24(a); 1999‑237, s. 28.28(b); 2000‑141, s. 1; 2000‑184, s. 2; 2001‑253, ss. 1(d), 1(e); 2003‑186, s. 5(a); 2005‑276, s. 29.31(a).)

 

§ 135‑40.6.� Benefits subject to deductible and coinsurance (comprehensive benefits).

The benefits provided in this section are subject to a deductible of three hundred fifty dollars ($350.00) per covered individual to an aggregate maximum of one thousand fifty dollars ($1,050) per employee and child(ren) or employee and family coverage contract per fiscal year and are payable on the basis of eighty percent (80%) by the Plan and twenty percent (20%) by the covered individual up to a maximum of two thousand dollars ($2,000) out‑of‑pocket per fiscal year. The aggregate maximum out‑of‑pocket required of individuals covered by this section shall not be more than six thousand dollars ($6,000) per employee and child(ren) or employee and family coverage contract per fiscal year.

(1)������ In‑Hospital Benefits. � The Plan pays in‑hospital benefits for each single confinement, when charged by a hospital, for room accommodations, including bed, board and general nursing care, but not to exceed the charge for semiprivate room or ward accommodations, or the rate negotiated for the Plan. Under the DRG reimbursement system, the coinsurance shall be based on the lower of the DRG amount or charges.

����������� The Plan will pay the following covered charges, when charged by a hospital, for each confinement.

a.�������� Intensive and cardiac nursing care.

b.�������� All recognized drugs and medicines for use in the hospital.

c.�������� Radiation services, including diagnostic x‑rays, x‑ray therapy, radiation therapy and treatment.

d.�������� Clinical and pathological laboratory examinations.

e.�������� Electrocardiograms and electroencephalograms.

f.��������� Physical, speech, and occupational therapy.

g.�������� Intravenous solutions.

h.�������� Oxygen and oxygen therapy, plus the use of equipment.

i.��������� Dressings, ordinary splints, plaster casts and sterile supplies.

j.��������� Use of operating, delivery, recovery and treatment rooms and equipment.

k.�������� Routine nursery charges, if the mother is eligible to receive maternity benefits.

l.��������� Anesthetics and the administration thereof by the hospital's employee anesthesiologist.

m.������� Devices or appliances surgically inserted within the body.

n.�������� Processing and administering of blood and blood plasma.

o.�������� Children are entitled to benefits for treatment of illnesses or congenital defect, incubation or isolette care, and treatment of prematurity or postmaturity.

If the mother is a covered individual, benefits are provided for the newborn's circumcision and routine nursery care.

p.�������� When a covered individual is admitted to or transferred to a section of a hospital providing ambulant, convalescent, or rehabilitative care, benefits are provided up to the average number of days of service for treatment of the particular diagnosis or condition involved, or more if medical necessity requires.

q.�������� The Plan pays benefits for laboratory testing and administration of blood provided to a covered individual.

When a covered individual is the recipient of transplanted organs or bones, benefits are provided for services to the donor which are directly and specifically related to the transplantation.

r.��������� Repealed by Session Laws 1991, c. 427, s. 31.

s.�������� The use of nebulizers when authorized as medically necessary by the attending physician.

(2)������ Limitations and Exclusions to In‑Hospital Benefits. �

a.�������� The services of physicians, surgeons and technicians not employed by or under contract to the hospital are not covered.

b.�������� Any admission for diagnostic tests or procedures which could be, and generally are, performed on an outpatient basis, if no hospitalization would have been required except for such diagnostic services is not covered. However, benefits are provided at eighty percent (80%) of Plan benefits for diagnostic tests and procedures consistent with the symptoms or diagnosis for which admitted.

c.�������� The Plan will not cover any admission to a hospital prior to the effective date of coverage or beginning prior to the expiration of any waiting period so long as the individual remains continuously in a hospital.

d.�������� Hospitalization for custodial, adult care or sanitarium care, or rest cures, is not covered.

e.�������� Hospitalization for dental care and treatment is not covered, except when a hospital setting is medically necessary.

f.��������� Prior to admission for scheduled inpatient hospitalization, the admitting physician shall contact the Plan and secure approval certification for an inpatient admission, including a length of stay, based upon clinical criteria established by the medical community, before any in‑hospital benefits are allowed under G.S. 135‑40.8(a). Immediately following an emergency or unscheduled inpatient hospitalization, the admitting physician shall contact the Plan and secure approval certification for the admission's length of stay before any in‑hospital benefits are allowed under G.S. 135‑40.8(a). Failure to secure certification, or denial of certification, shall result in a penalty of fifty percent (50%) of the eligible expenses up to five hundred dollars ($500.00) per admission and the denial of services that were not medically necessary or appropriate, as determined by the Claims Processor. Denial of certification by the Plan shall be made only after contact with the admitting physician and shall be subject to appeal to the Executive Administrator and Board of Trustees. Inpatient hospital admission and length of stay certifications required by this subdivision do not apply to inpatient admissions outside of the United States. While approval certification for inpatient admissions is required to be initiated by the admitting physician, the employee or individual covered by the Plan shall be responsible for insuring that the required certification is secured. Failure to secure certification for inpatient hospitalization shall not result in a penalty to the employee or individual when approval would have been given if requested. Denial of services under this subsection shall be done only after notification of the Plan member of his or her personal financial responsibility for such services.

g.�������� Repealed by Session Laws 2001‑253, s. 1(o), effective July 1, 2001.

(3)������ Skilled Nursing Facility Benefits. � The Plan will pay benefits in a skilled nursing facility licensed under applicable State laws for not more than 100 days per fiscal year for the same reason, as follows:

����������� After discharge from a hospital for which inpatient hospital benefits were provided by this Plan for a period of not less than three days, and treatment consistent with the same illness or condition for which the covered individual was hospitalized, the daily charges will be paid for room and board in a semiprivate room or any multibed unit up to the maximum benefit specified in subsection (1) of this section, less the days of care already provided for the same illness in a hospital. Plan allowances for total daily charges may be negotiated but will not exceed the daily semiprivate hospital room rate as determined by the Plan.

����������� Credit will be allowed toward private room charges in an amount equal to the facility's most prevalent charge for semiprivate accommodations. Charges will also be paid for general nursing care and other services which would ordinarily be covered in a general hospital. In order to be eligible for these benefits, admission must occur within 14 days of discharge from the hospital.

����������� In order to qualify for benefits provided by a skilled nursing facility, the following stipulations apply:

a.�������� The services are medically required to be given on an inpatient basis because of the covered individual's need for medically necessary skilled nursing care on a continuing daily basis for any of the conditions for which he or she was receiving inpatient hospital services prior to transfer from a hospital to the skilled nursing facility or for a condition requiring such services which arose after such transfer and while he or she was still in the facility for treatment of the condition or conditions for which he or she was receiving inpatient hospital services,

b.�������� Only on prior referral by and so long as, the patient remains under the active care of an attending doctor and the patient requires continual hospital confinement without the care and treatment of the skilled nursing facility, and

c.�������� Approved in advance by the Claims Processor.

For facilities not qualified for delivery of services covered by the benefits of Title XVIII of the Social Security Act (Medicare), neither the Plan nor any of its members shall be billed or held liable by such facilities for charges that otherwise would be covered by Medicare.

(4)������ Outpatient Benefits. � The Plan pays for services rendered in the outpatient department of a hospital, in a doctor's office, in an ambulatory surgical facility, or elsewhere as determined by the Executive Administrator, as follows:

a.�������� Accidental injury: All covered services. Dental services are excluded except for oral surgery specifically listed in subsection (5)c. of this section.

b.�������� Operative procedures.

c.�������� All hospital services for radiation therapy, treatment by use of x‑rays, radium, cobalt and other radioactive substances.

d.�������� Pathological examinations of tissue removed by resection or biopsy. Routine Pap smears are not covered by this subdivision.

e.�������� Charges for diagnostic x‑rays, clinical laboratory tests, and other diagnostic tests and procedures such as electrocardiograms and electroencephalograms.

����������� No benefits are provided in this subdivision for screening examinations and routine physical examinations to assess general health status in the absence of specific symptoms of active illness, routine office visits or for doctor's services for diagnostic procedures covered under surgical benefits.

(5)������ Surgical Benefits. � The Plan pays the usual, customary and reasonable charges for covered surgical services as follows:

a.�������� Surgery: Cutting procedures, treatment of fractures, transfusions, operative preparation for diagnostic x‑ray examinations, surgical implantation radiation sources, major endoscopic examinations, biopsies, surgical sterilization, other standard services and operations.

For the purpose of this subdivision, the term "standard services and operations" includes the following organ transplants: liver, heart, corneal, bone marrow, lung, heart‑lung, pancreas, and kidney. All other organ transplants shall be considered nonreimbursable under the Plan. Benefits for the above listed organ transplants shall be payable only in accordance with rules established by the Executive Administrator and Board of Trustees. The Executive Administrator and Board of Trustees may limit the Plan's reimbursement for selected organ transplants to amounts that would otherwise be allowed in accordance with G.S. 135‑40.4.

b.�������� Anesthesia: Administration of general, spinal block or local anesthesia. Covered services include pre‑ and postoperative visits, the administration of the anesthetic, fluids and/or blood provided by the anesthesiologist and incidental to the anesthesia, and necessary drugs and materials provided by the anesthesiologist. No benefits are provided for administration of local anesthesia or for anesthesia administered by the operating surgeon or surgical assistant(s).

c.�������� Oral Surgery: Services which are within the scope of practice of both a doctor of medicine and a dentist, such as excision of tumors and lesions of the mouth, treatment of jaw fractures and surgery to correct injuries of the mouth structure other than teeth and their supporting structure. Developmental and congenital orthognathic surgery procedures will be covered under the Plan, provided such surgery is medically necessary, is the only method of treatment which will correct the patient's deformity, is not performed for cosmetic reasons, and is approved in advance by the Claims Processor on the basis of the surgeon's documentation that the correction of the deformity is medically necessary for the maintenance of good physical health.

d.�������� Maternity Care: Independent operative procedures in connection with pregnancy, such as: manipulative obstetrical delivery, delivery by Caesarean section, removal of ectopic pregnancy, dilation and curettage. Benefits for manipulative obstetrical delivery include use of forceps and/or episiotomy. No benefits are provided for antepartum or postpartum care, except for direct surgical procedures of delivery and surgical treatment.

e.�������� Surgical Assistants: Services of an assistant surgeon when medical judgment requires the services of an assistant surgeon and no hospital‑employed doctor in training is available.

f.��������� Multiple Procedures: When multiple or bilateral surgical procedures are performed by the same doctor through separate incisions or approaches during the same session, the surgical benefits will be the greater UCR allowance, plus fifty percent (50%) of the lesser UCR allowance. Anesthesia benefits will be the greater UCR allowance.

When multiple surgical procedures are performed by the same doctor through the same incision or operative approach, the surgical benefits are limited to the procedure which has the highest UCR allowance.

When a surgical procedure is performed in two or more stages, the surgical benefit for the entire procedure is the same as it would be were the procedure performed in one stage (except where otherwise provided in the benefit schedule). This limitation does not apply to anesthesia benefits.

g.�������� Cleft Palate: Notwithstanding G.S. 135‑40.6(6)a and G.S. 135‑40.7(11), medical treatment and care needed by an individual born with cleft palate, including specialized dental and orthodontic care necessitated by the congenital condition.

h.�������� Reconstructive Breast Surgery: Reconstructive breast surgery resulting from a mastectomy. The coverage shall include all stages and revisions of reconstructive breast surgery performed on a nondiseased breast to establish symmetry when reconstructive surgery on a diseased breast is performed. As used in this sub‑subdivision, (i) "mastectomy" means the surgical removal of all or part of a breast as a result of breast cancer or breast disease; (ii) "reconstructive breast surgery" means surgery performed as a result of a mastectomy to reestablish symmetry between the two breasts, and includes reconstruction of the mastectomy site, creation of a new breast mound, and creation of a new nipple/areolar complex. "Reconstructive breast surgery" also includes augmentation mammoplasty, reduction mammoplasty, and mastopexy of the nondiseased breast. Coverage described under this sub‑subdivision shall not be denied on the basis that the coverage is for cosmetic surgery. Reconstruction of the nipple/areolar complex following a mastectomy is covered without regard to the lapse of time between the mastectomy and the reconstruction, subject to the approval of the treating physician.

(6)������ Limitations and Exclusions to Surgical Benefits. �

a.�������� No benefits are provided for dental prostheses such as crowns, or dentures; orthodontic care; operative restoration of teeth (fillings); dental extractions (whether impacted or not impacted); apicoectomies; treatment of dental caries, gingivitis, or periodontal diseases by gingivectomies or other periodontal surgery; vestibuloplasties, alveoplasties, removal of exostosis and tori preparatory to fitting of dentures; correction of malocclusion by orthognathic surgery or other procedures by repositioning of bone tissue except as permitted pursuant to G.S. 135‑40.6(5)c; removal of cysts incidental to apicoectomies or extraction of teeth.

b.�������� Cosmetic surgery or surgery solely for beautifying purposes is not covered, except for procedures related to injury sustained while the individual is continuously covered under the Plan.

c.�������� If a covered individual is admitted for medical and surgical treatment for the same condition, by the same doctor, either medical or surgical care may be paid, whichever is greater, but not both.

d.�������� When a covered individual is admitted for medical treatment and during the hospital admission is subsequently referred to another doctor for surgery, medical benefits are provided for hospital days prior to the date of referral.

e.�������� If during the hospital admission for necessary medical treatment, surgery is provided for a wholly distinct and unrelated condition, both medical and surgical benefits are payable, however, the same doctor may not be paid both medical and surgical benefits provided on the same day.

f.��������� If during hospital admission for necessary medical treatment, a covered individual receives related surgical procedures such as paracentesis, biopsy, endoscopy, operative preparation for x‑ray examination, or other diagnostic procedures for which benefits are applicable under the surgical benefits section of the Plan, both medical and surgical benefits are payable.

g.�������� No benefits are provided for concurrent co‑attending medical and surgical care by two or more doctors for the same condition other than as provided above.

h.�������� No benefits will be payable for surgical procedure specifically listed by the American Medical Association or the North Carolina Medical Association as having no medical value.

i.��������� No benefits are payable for organ transplants not listed in G.S. 135‑40.6(5)a, nor will benefits be payable for surgical procedures or organ transplants determined by the Executive Administrator and Board of Trustees upon the advice of the Claims Processor to be experimental.

j.��������� No benefits are payable for radial keratotomy surgical procedures or for services to correct vision when performed in lieu of the use of corrective lenses.

(7)������ Medical Benefits. �

a.�������� Services of Doctors. � The Plan pays the usual, reasonable and customary charges for covered inpatient medical (nonsurgical) services. Services are covered if the individual is hospital‑confined and is eligible for hospitalization benefits as described in this section. Benefits are provided for exactly the same number of days as the individual is entitled to under this section, except that medical benefits are provided on both the day of admission and the day of discharge.

In the event a covered individual is treated by two or more co‑attending doctors during the same hospital confinement for a medical (nonsurgical) condition, benefits are limited to payment for services provided by the primary attending doctor, except where need is established for supplementary skills for treatment of separate and distinct diagnoses or conditions.

Home, office, and skilled nursing facility visits including (i) charges for injected medications, (ii) inpatient care by attending medical doctors, radiologists, pathologists, and consultants during such time as hospital benefits are paid under any section of this Plan, (iii) care in the outpatient department of a hospital, and (iv) administration of shock therapy (drug or electric) including the services of anesthesiologists provided on an office or hospital outpatient basis for treatment of acute psychotic reaction or severe depression.

b.�������� Consultations. � Consultation services are provided when requested by attending doctor and the consultation is necessary in conjunction with and directly related to care and treatment of the condition for which admitted. No benefits are provided for staff consultation required by hospital rules and regulations. When a covered individual is admitted for oral surgery, a single consultation allowance will be provided for medical examination and pre‑anesthesia evaluation.

c.�������� Newborn Care. � When a child is eligible at birth, benefits are provided for treatment of illness, injury, prematurity, or congenital condition as a registered inpatient. When delivery is by Caesarean section, a single consultation allowance will be provided for standby, resuscitation, and infant care in the operating room provided by a doctor other than the operating surgeon.

When a mother receives maternity benefits under the Plan for a child's delivery, benefits are provided for examination and supervision of a normal newborn infant.

d.�������� Repealed by Session Laws 1991, c. 427, s. 31.

(8)������ Other Covered Charges. �

a.�������� Repealed by Session Laws 1999‑237, s. 28.28(a), effective January 1, 2000.

b.�������� Private Duty Nursing: Services of licensed nurses (not immediate relatives or members of the participant's household or private duty nursing used in lieu of or as a substitute for hospital staff nurses) ordered by the attending doctor for a condition requiring skilled nursing services. Private Duty Nursing ordered must be approved in advance by the Claims Processor as medically necessary. Allowances for Private Duty Nursing shall not exceed the lesser of the Plan's usual, customary and reasonable allowances or ninety percent (90%) of the daily semiprivate rate at skilled nursing facilities as determined by the Plan.

c.�������� Home Health Agency Services: Services provided in a covered individual's home, when ordered by the attending physician and hospital or skilled nursing facility confinement would be required for the patient without such treatment and cannot be readily provided by family members. Services may include medical supplies, equipment, appliances, therapy services (when provided by a qualified speech therapist or licensed physiotherapist), and nursing services. Nursing services will be allowed for:

1.�������� Services of a registered nurse (RN); or

2.�������� Services of a licensed practical nurse (LPN) under the supervision of a RN; or

3.�������� Services of a home health aide which are an adjunct to or extension of concurrent medically necessary skilled services under the supervision of a RN, limited to four hours a day.

����������������� Home health services shall be limited to 60 days per fiscal year, except that additional home health services may be provided on an individual basis if prior approval is obtained from the Claims Processor. Plan allowances for home health services shall be limited to licensed or Medicare certified home health agencies and shall not exceed ninety percent (90%) of the skilled nursing facility semiprivate rates as determined by the Plan, or charges negotiated by the Plan.

d.�������� Licensed Ambulance Service: Local ambulance transportation:

1.�������� To or from a hospital for inpatient care or outpatient accident care;

2.�������� From a hospital to the nearest facility able to provide needed services not available at the transferring hospital; or

3.�������� From a hospital to a skilled nursing facility.

The word "local" means ambulance transportation of not more than 50 miles unless the Claims Processor authorizes ambulance transportation beyond this distance.

e.�������� Prosthetic and Orthopedic Appliances and Durable Medical Equipment: Appliances and equipment including corrective and supportive devices such as artificial limbs and eyes, wheelchairs, traction equipment, inhalation therapy and suction machines, hospital beds, braces, orthopedic corsets and trusses, not more than three hundred fifty dollars ($350.00) for therapeutic shoes for diabetes and other high‑risk conditions, and other prosthetic appliances or ambulatory apparatus which are provided solely for the use of the participant. Eligible charges include repair and replacement when medically necessary. Benefits will be provided on a rental or purchase basis at the sole discretion of the Claims Processor and agreements to rent or purchase shall be between the Claims Processor and the supplier of the appliance.

For the purposes of this subdivision, the term "durable medical equipment" means standard equipment normally used in an institutional setting which can withstand repeated use, is primarily and customarily used to serve a medical purpose, is generally not useful to a person in the absence of an illness or injury and is appropriate for use in the home. Decisions of the Claims Processor, the Executive Administrator and Board of Trustees as to compliance with this definition and coverage under the Plan shall be final.

f.��������� Dental Services: Oral surgery, including extraction of teeth, necessitated because of medical treatment. Dental surgery and appliances for mouth, jaw, and tooth restoration necessitated because of external violent and accidental means, such as the impact of moving body, vehicle collision, or fall occurring while an individual is covered under G.S. 135‑40.3. No benefits are provided in connection with injury incurred in the act of chewing, nor for damage or breakage of an appliance such as bridge or denture being cleaned or otherwise not in normal mouth usage at the time of accident, nor for appliances for orthodontic treatment when a class of malocclusion, other than orthognathic, or cross bite has been diagnosed. Benefits for temporomandibular joint (TMJ) disfunction appliance therapy are limited to cases where the TMJ disfunction has been diagnosed as solely resulting from accidental means as certified by the attending practitioner and approved by the Claims Processor.

Benefits shall include extractions, fillings, crowns, bridges, or other necessary therapeutic and restorative techniques and appliances to reasonably restore condition and function to that existing immediately prior to the accident. Injury or breakage of existing appliances such as bridges and dentures is limited to repair of such appliances unless certified as damaged beyond repair.

g.�������� Medical Supplies: Colostomy bags, catheters, dressings, oxygen, syringes and needles, and other similar supplies.

h.�������� Blood: Transfusions including cost of blood, plasma, or blood plasma expanders.

i.��������� Physical Therapy: Recognized forms of physical therapy for restoration of bodily function, provided by a doctor, hospital, licensed professional physiotherapist, or certified physical therapy assistant. No benefits are provided for eye exercises or visual training.

j.��������� Inhalation Therapy: When provided by a doctor, hospital, or other organization.

k.�������� Speech Therapy: Speech therapy provided by certified speech therapist.

l.��������� Cataract Lenses: Cataract lenses prescribed as medically necessary for aphakia persons, including charges for necessary examinations and fittings. Benefits will be limited to one set of cataract lenses every 24 months for persons 18 years of age or older, and one set of cataract lenses every 12 months for persons less than 18 years of age.

m.������� Cardiac Rehabilitation: Charges not to exceed the lesser of one thousand eight hundred dollars ($1,800) or 90 days per fiscal year. Coverage is limited to patients with Coronary Artery Bypass Graft (CABG), status/post myocardial infarction, Percutaneous Transliminal Coronary Angioplasty (PTCA) or stent, valve replacement, heart transplant, or chronic and disabling angina provided such services are provided within six months of the qualifying event and in a medically supervised facility fully certified by the North Carolina Department of Health and Human Services.

n.�������� Chiropractic Services: Limited to the alignment of the spine and releasing of pressure by manipulation in accordance with the definitions in G.S. 90‑143. Maximum benefits for x‑rays, manipulations, and modalities shall be two thousand dollars ($2,000) per fiscal year.

o.�������� Foot Surgery: Foot surgery on bones and joints.

p.�������� Outpatient Diabetes Self‑Care Programs: Charges, not to exceed three hundred dollars ($300.00) per fiscal year, when determined to be medically necessary by an attending physician and approved by the Executive Administrator and Claims Processor as meeting the standards of the National Diabetes Advisory Board for patients with a medical history of diabetes, provided such charges are incurred in a medically supervised facility.

q.�������� Necessary medical services provided to terminally ill patients by duly licensed hospice organizations, when directed by the attending physician and approved in advance by the Claims Processor and the Executive Administrator.

r.��������� Occupational Therapy: Recognized forms of occupational therapy provided by a doctor, hospital, licensed professional occupational therapist, or certified occupational therapy assistant to restore fine motor skills for the resumption of bodily functions.

s.�������� Routine Diagnostic Examinations: Allowable charges for routine diagnostic examinations and tests, including examinations and tests for the screening for the early detection of cervical cancer, breast, colon, rectal, and prostate exams, X rays, blood and blood pressure checks, urine tests, tuberculosis tests, and general health checkups that are medically necessary for the maintenance and improvement of individual health but no more often than once every three years for covered individuals to age 40 years, once every two years for covered individuals to age 50 years, and once a year for covered individuals age 50 years and older and, for examinations and tests for the screening for the early detection of cervical cancer, in accordance with the most recently published American Cancer Society guidelines or guidelines adopted by the North Carolina Advisory Committee on Cancer Coordination and Control, unless a more frequent occurrence is warranted by a medical condition when such charges are incurred in a medically supervised facility. The Plan will pay one hundred percent (100%) of allowable charges for mammograms once per year for covered individuals age 40 years and over, and not more often than once every three years for covered individuals to age 40 years, when such charges are incurred in a medically supervised facility. Provided, however, that charges for such examinations and tests are not covered by the Plan when they are incurred to obtain or continue employment, to secure insurance coverage, to comply with legal proceedings, to attend schools or camps, to meet travel requirements, to participate in athletic and related activities or to comply with governmental licensing requirements. For the purposes of this sub‑subdivision, "examinations and laboratory tests for the screening for the early detection of cervical cancer" means conventional PAP smear screening, liquid‑based cytology, and human papilloma virus (HPV) detection methods for women with equivocal findings on cervical cytologic analysis that are subject to the approval of and have been approved by the United States Food and Drug Administration.

t.��������� Repealed by Session Laws 1995, c. 507, s. 7.24(c).

u.�������� Treatment of adverse reactions to vaccinations undertaken as smallpox countermeasures: Necessary medical services provided to a covered individual for infection with smallpox, infection with vaccinia, or any adverse medical reaction due to the vaccination.

(9)������ Limitations and Exclusions to Other Covered Charges. � No benefits are available under this section of the Plan until full utilization is made of similar benefits available under other sections of this Plan.

No benefits will be payable for:

a.�������� Private duty nursing provided by an immediate relative or member of the covered individual's household; or private duty nursing used in lieu of or as a substitute for hospital staff nurses;

b.�������� Dental care except as covered under subsection (8)f and other dental services covered by the surgical benefits section of this Plan, subsection (5)c of this section;

c.�������� Foot care except in connection with services covered by the surgical or inpatient medical benefits section of this Plan, subsections (1) and (5) of this section;

d.�������� Repealed by Session Laws 1991, c. 427, s. 29.

e.�������� Expenses incurred in the event a covered individual is a bed patient in a hospital, or skilled nursing facility on the effective date of coverage, so long as the covered individual remains so confined;

f.��������� Eyeglasses or other corrective lenses (except for cataract lenses certified as medically necessary for aphakia persons), hearing aids, braces for teeth, dental plates or bridges or other dental prostheses, air‑conditioners, vaporizers, humidifiers, mattresses (other than as supplied with a hospital bed) and specially built shoes (other than attached to artificial limbs or orthopedic braces, and other than therapeutic shoes for diabetes or other high‑risk conditions);

g.�������� The difference between charges made by doctors and the UCR allowance for covered benefits, and the coinsurance expenses required under this Plan;

h.�������� Habit forming drugs to support drug dependency;

i.��������� Any other services not specifically outlined in this Plan.

(10)���� Coverage for Services of Advanced Practice Registered Nurses. � Notwithstanding any other provision of this section or the Plan, benefits shall be payable for services performed by an advanced practice registered nurse subject to the following limitations:

a.�������� The service performed is within the nurse's lawful scope of practice;

b.�������� The Plan provides benefits for identical services performed by other licensed health care providers;

c.�������� The service is not performed while the nurse is a regular employee in an office of a licensed physician;

d.�������� The service is not performed while the registered nurse is employed by a nursing facility (including a hospital, skilled nursing facility, intermediate care facility, or home care agency); and

e.�������� Nothing in this subdivision is intended to authorize payment to more than one provider for the same service.

No lack of signature, referral, or employment by any other health care provider may be asserted to deny benefits under this subdivision.

For purposes of this subdivision, an "advanced practice registered nurse" means only a registered nurse who is duly licensed or certified as a nurse practitioner, clinical specialist in psychiatric and mental health nursing, or a nurse midwife.

(11)���� Coverage for Physician Services Provided by Physician Assistants. � Notwithstanding any other provision of this section or the Plan, benefits shall be payable for physician services performed by a duly licensed physician assistant subject to the following limitations:

a.�������� The service performed is within the lawful scope of practice of the physician assistant in accordance with rules adopted by the North Carolina Medical Board, pursuant to G.S. 90‑18.1, or is within the scope of practice of a physician assistant licensed or certified in and acting pursuant to laws and rules applicable in the area where the service is provided;

b.�������� The plan currently provides reimbursement for identical services performed by other licensed health care providers;

c.�������� The reimbursement is made to the physician, clinic, agency, or institution employing the physician assistant; and

d.�������� Nothing in this subdivision authorizes payment to more than one provider for the same service.

As used in this subdivision, a "duly licensed physician assistant" is a physician assistant as defined by G.S. 90‑18.1.

(12)���� Coverage for services of Clinical Pharmacist Practitioners. � Notwithstanding any other provision of this section or the Plan, benefits shall be payable for services performed by a Clinical Pharmacist Practitioner subject to the following limitations:

a.�������� The service performed is within the Clinical Pharmacist Practitioner's limitations pursuant to G.S. 90‑18.4.

b.�������� The Plan currently provides reimbursement for identical services provided by other health care providers.

c.�������� The reimbursement shall be at the discretion of the Executive Administrator regarding services covered and compensation.

d.�������� The reimbursement is made to the Clinical Pharmacist Practitioner.

e.�������� Nothing in this subdivision authorizes payment to more than one provider for the same service. (1981 (Reg. Sess., 1982), c. 1398, s. 6; 1983, c. 922, ss. 8‑14, 21.3, 21.5, 21.9; 1983 (Reg. Sess., 1984), c. 1110, s. 12; 1985, c. 192, ss. 2, 3, 6, 6.1, 11, 16‑17; c. 732, ss. 1, 14, 15, 20‑22, 27‑29, 31‑33, 35, 65, 66; 1985 (Reg. Sess., 1986), c. 1020, ss. 4, 11‑15, 20, 23; 1987, c. 282, ss. 23, 24; c. 857, ss. 15‑18; 1989, c. 752, s. 22(g)‑(k); c. 770, s. 32; 1991, c. 427, ss. 14, 15, 21‑29, 31, 37, 38, 41; 1993, c. 464, s. 6; 1995, c. 507, ss. 7.24(b), (c), 7.26, 7.27, 7.28B; c. 535, s. 28; 1996, 2nd Ex. Sess., c. 18, s. 28.24; 1997‑312, s. 5; 1997‑443, s. 11A.118(a); 1997‑512, ss. 3, 5, 7, 8, 10, 11, 36‑38(a); 1999‑210, s. 7; 1999‑237, s. 28.28(a); 2001‑253, ss. 1(f)‑(k), (o), (p); 2001‑487, s. 86(b); 2002‑126, s. 28.17; 2003‑169, s. 1; 2003‑186, s. 5(b); 2005‑276, s. 29.31(b), (c).)

 

§ 135‑40.6A.� Prior approval procedures.

(a)������ The Executive Administrator and Board of Trustees shall establish procedures to require prior medical approvals for the following services:

(1)������ Home Health Care Agency Services in accordance with G.S. 135‑40.6(8)c.

(2)������ Repealed by Session Laws 1991, c. 427, s. 31.

(3)������ Ambulance Transport over 50 miles in accordance with G.S. 135‑40.6(8)d.

(4)������ Oral Surgery in accordance with G.S. 135‑40.6(5)c.

(5)������ Durable Medical Equipment (rental and purchase) in accordance with G.S. 135‑40.6(8)e.

(6)������ Covered Transplants in accordance with G.S. 135‑40.6(5)a.

(7)������ Repealed by Session Laws 1997‑512, s. 38(b).

(8)������ Hospice Services in accordance with G.S. 135‑40.6(8)q.

(9)������ Phase II clinical trials in accordance with G.S. 135‑40.1(1b). Decisions pursuant to this section must be rendered by the Plan within 30 days after receipt of all medical documentation requested by the Plan.

(b)������ The Executive Administrator and Board of Trustees may establish procedures to require prior medical approvals for the following services:

(1)������ Skilled Nursing Facility Care.

(2)������ Private Duty Nursing.

(3)������ Speech Therapy (unless rendered in an inpatient hospital).

(4)������ Physical Therapy (in the home).

(5),����� (6) Repealed by Session Laws 1997‑512, s. 39.

(7)������ Surgical Procedures:

a.�������� Blepharoplasties

b.�������� Surgery for Hermaphroditism

c.�������� Excision of Keloids

d.�������� Reduction Mammoplasty

e.�������� Morbid Obesity Surgery

f.��������� Penile Prosthesis

g.�������� Excision of Gynecomastia

h.�������� Cochlear Implants

i.��������� Revision of the Nasal Structure

j.��������� Abdominoplasty

k.�������� Fimbrioplasty

l. �������� Tubotubal Anastomasis

m.������� Varicose Vein Surgery.

(8)������ Subcutaneous injection of "filling" material (Example: zyderm, silicone).

(8a)���� Botulinium toxin.

(9)������ Suction Lipectomy.

(10)���� Outpatient prescription drugs requiring prospective review under the Plan's pharmacy benefit management program.

(11)���� Outpatient prescription drugs for growth hormone, weight loss, and antifungal drugs for the treatment of nail fungus.

(c)������ No procedure for prior approval may be established except as provided by this Article as it may be amended from time to time. (1985 (Reg. Sess., 1986), c. 1020, s. 22; 1987, c. 857, s. 19; 1989, c. 770, s. 33; 1991, c. 427, ss. 31, 39; 1997‑512, ss. 6, 38(b), 39; 1998‑212, s. 28.29(d); 2000‑141, s. 4; 2001‑253, s. 1(l).)

 

§ 135‑40.7.� General limitations and exclusions.

The following shall in no event be considered covered expenses nor will benefits described in G.S. 135‑40.5 through G.S. 135‑40.11 be payable for:

(1)������ Charges for any services rendered to a person prior to the date coverage under this Plan becomes effective with respect to such person.

(2)������ Charges for care in a nursing home, adult care home, convalescent home, or in any other facility or location for custodial or for rest cures.

(3)������ Charges to the extent paid, or which the individual is entitled to have paid, or to obtain without cost, in accordance with any government laws or regulations except Medicare. If a charge is made to any such person which he or she is legally required to pay, any benefits under this Plan will be computed in accordance with its provisions, taking into account only such charge. "Any government" includes the federal, State, provincial or local government, or any political subdivision thereof, of the United States, Canada or any other country.

(4)������ Charges for services rendered in connection with any occupational injury or disease arising out of and in the course of employment with any employer, if (i) the employer furnishes, pays for or provides reimbursement for such charges, or (ii) the employer makes a settlement payment for such charges, or (iii) the person incurring such charges waives or fails to assert his or her rights respecting such charges.

(5)������ Charges for any care, treatment, services or supplies other than those which are certified by a physician who is attending the individual as being required for the medically necessary treatment of the injury or disease and are deemed medically necessary and appropriate for the treatment of the injury or disease by the Executive Administrator and Board of Trustees upon the advice of the Claims Processor. This subdivision shall not be construed, however, to require certification by an attending physician for a service provided by an advanced practice registered nurse acting within the nurse's lawful scope of practice, subject to the limitations of G.S. 135‑40.6(10).

(6)������ Charges for any services rendered as a result of injury or sickness due to an act of war, declared or undeclared, which act shall have occurred after the effective date of a person's coverage under the Plan.

(7)������ Charges for personal services such as barber services, guest meals, radio and TV rentals, etc.

(8)������ Charges for any services with respect to which there is no legal obligation to pay. For the purposes of this item, any charge which exceeds the charge that would have been made if a person were not covered under this Plan shall, to the extent of such excess, be treated as a charge for which there is no legal obligation to pay; and any charge made by any person for anything which is normally or customarily furnished by such person without payment from the recipient or user thereof shall also be treated as a charge for which there is no legal obligation to pay.

(9)������ Charges during a continuous hospital confinement which commenced prior to the effective date of the person's coverage under this Plan.

(10)���� Charges in excess of either the usual, customary and reasonable charge for or the fair and reasonable value of the services or supply which gives rise to the expense; provided that in each instance the extent that a particular charge is usual, customary and reasonable or fair and reasonable shall be measured and determined by comparing the charge with charges made for similar things to individuals of similar age, sex, income and medical condition in the locality concerned, and the result of such determination shall constitute the maximum allowable as covered medical expenses unless the Claims Processor finds that considerations of fairness and equity in a particular set of circumstances require that greater or lesser charges be considered as covered medical expenses in that set of circumstances.

(11)���� Charges for or in connection with any dental work or dental treatment except to the extent that such work or treatment is specifically provided for under the Plan. Excluded is payment for surgical benefits for tooth replacement, such as crowns, bridges or dentures; orthodontic care; filling of teeth; extraction of teeth (whether or not impacted); root canal therapy; removal of root tips from teeth; treatment for tooth decay, inflammation of gingiva, or surgical procedures on diseased gingiva or other periodontal surgery; repositioning soft tissue, reshaping bone, and removal of bony projections from the ridges preparatory to fitting of dentures; removal of cysts incidental to removal of root tips from teeth and extraction of teeth; or other dental procedures involving teeth and their bones or tissue supporting structure.

(12)���� Charges incurred for any medical observations or diagnostic study when no disease or injury is revealed, unless proof satisfactory to the Claims Processor is furnished that (i) the claim is in order in all other respects, (ii) the covered individual had a definite symptomatic condition of disease or injury other than hypochondria, and (iii) the medical observation and diagnostic studies concerned were not undertaken as a matter of routine physical examination or health checkup as provided in G.S. 135‑40.6(8)s.

(13)���� Charges for eyeglasses or other corrective lenses (except for cataract lenses certified as medically necessary for aphakia persons) and hearing aids or examinations for the prescription or fitting thereof.

(14)���� Charges for cosmetic surgery or treatment except that charges for cosmetic surgery or treatment required for correction of damage caused by accidental injury sustained by the covered individual while coverage under this plan is in force on his or her account or to correct congenital deformities or anomalies shall not be excluded if they otherwise qualify as covered medical expenses.

(15)���� Admissions for diagnostic tests or procedures which could be, and generally are, performed on an outpatient basis and inpatient services or supplies which are not consistent with the diagnosis, for which admitted.

(16)���� Costs denied by the Claims Processor as part of its overall program of claim review and cost containment.

(16a)�� Charges in excess of negotiated rates allowed for preferred providers of institutional and professional medical care and services in accordance with the provisions of G.S. 135‑40.4, when such preferred providers are reasonably available to provide institutional and professional medical care.

(17)���� If a covered service becomes excluded from coverage under the Plan, the Executive Administrator and Claims Processor may, in the event of exceptional situations creating undue hardships or adverse medical conditions, allow persons enrolled in the Plan to remain covered by the Plan's previous coverage for up to three months after the effective date of the change in coverage, provided the persons so enrolled had been undergoing a continuous plan of specific treatment initiated within three months prior to the effective date of the change in coverage.

(18)���� Charges for services unless a claim is filed within 18 months from the date of service.

(19)���� Any service, treatment, facility, equipment, drug, supply, or procedure that is experimental or investigational as defined in G.S. 135‑40.1(7a). Clinical trial phases III and IV are covered by the Plan as is clinical trial phase II when approved by the Plan.

(20)���� Complications arising from noncovered services known at the time the noncovered services were provided.

(21)���� Charges related to a noncovered service, even if the charges would have been covered if rendered in connection with a covered service.

(22)���� Charges for services covered by the long‑term care benefit provisions of Part 4 of this Article.

(23)���� Charges disallowed by the Plan's pharmacy benefits manager. (1981 (Reg. Sess., 1982), c. 1398, s. 6; 1983, c. 922, ss. 15, 21.4; 1985 (Reg. Sess., 1986), c. 1020, ss. 16, 20, 21, 25, 26; 1987, c. 282, s. 35; 1991, c. 427, ss. 16, 30, 40; 1993, c. 464, s. 7; 1995, c. 535, s. 29; 1997‑456, s. 55.9; 1997‑468, s. 6; 1997‑512, ss. 4, 13; 1998‑212, s. 28.29(c); 2000‑141, s. 5.)

 

§ 135‑40.7A:� Repealed by Session Laws 1997‑512, s. 15.

 

§ 135‑40.7B.� Special provisions for chemical dependency and mental health benefits.

(a)������ Except as otherwise provided in this section, benefits for the treatment of mental illness and chemical dependency are covered by the Plan and shall be subject to the same deductibles, durational limits, and coinsurance factors as are benefits for physical illness generally.

(b)������ Notwithstanding any other provision of this Part, the following necessary services for the care and treatment of chemical dependency and mental illness shall be covered under this section: allowable institutional and professional charges for inpatient care, outpatient care, intensive outpatient program services, partial hospitalization treatment, and residential care and treatment:

(1)������ For mental illness treatment:

a.�������� Licensed psychiatric hospitals;

b.�������� Licensed psychiatric beds in licensed general hospitals;

c.�������� Licensed residential treatment facilities that have 24‑hour on‑site care provided by a registered nurse and that hold current accreditation by a national accrediting body approved by the Plan's mental health case manager;

d.�������� Area Mental Health, Developmental Disabilities, and Substance Abuse Authorities;

e.�������� Licensed intensive outpatient treatment programs; and

f.��������� Licensed partial hospitalization programs.

(2)������ For chemical dependency treatment:

a.�������� Licensed chemical dependency units in licensed psychiatric hospitals;

b.�������� Licensed chemical dependency hospitals;

c.�������� Licensed chemical dependency treatment facilities;

d.�������� Area Mental Health, Developmental Disabilities, and Substance Abuse Authorities;

e.�������� Licensed intensive outpatient treatment programs;

f.��������� Licensed partial hospitalization programs; and

g.�������� Medical detoxification facilities or units.

(c)������ Notwithstanding any other provisions of this Part, the following providers and no others may provide necessary care and treatment for mental health under this section:

(1)������ Psychiatrists who have completed a residency in psychiatry approved by the American Council for Graduate Medical Education and who are licensed as medical doctors or doctors of osteopathy in the state in which they perform and services covered by the Plan;

(2)������ Licensed or certified doctors of psychology;

(3)������ Certified clinical social workers and licensed clinical social workers;

(3a)���� Licensed professional counselors;

(4)������ Certified clinical specialists in psychiatric and mental health nursing;

(4a)���� Nurses working under the employment and direct supervision of such physicians, psychologists, or psychiatrists;

(5)������ Repealed by Session Laws 1997‑512, s. 14.

(6)������ Licensed psychological associates;

(7),����� (8) Repealed by Session Laws 1997‑512, s. 14.

(9)������ Certified fee‑based practicing pastoral counselors;

(10)���� Licensed physician assistants under the supervision of a licensed psychiatrist and acting pursuant to G.S. 90‑18.1 or the applicable laws and rules of the area in which the physician assistant is licensed or certified; and

(11)���� Licensed marriage and family therapists.

(c1)���� Notwithstanding any other provisions of this Part, the following providers and no others may provide necessary care and treatment for chemical dependency under this section:

(1)������ The following providers with appropriate substance abuse training and experience in the field of alcohol and other drug abuse as determined by the mental health case manager, in facilities described in subdivision (b)(2) of this section, in day/night programs or outpatient treatment facilities licensed after July 1, 1984, under Article 2 of Chapter 122C of the General Statutes or in North Carolina area programs in substance abuse services are authorized to provide treatment for chemical dependency under this section:

a.�������� Licensed physicians including, but not limited to, physicians who are certified in substance abuse by the American Society of Addiction Medicine (ASAM);

b.�������� Licensed or certified psychologists;

c.�������� Psychiatrists;

d.�������� Certified substance abuse counselors working under the direct supervision of such physicians, psychologists, or psychiatrists;

e.�������� Licensed psychological associates;

f.��������� Nurses working under the direct supervision of such physicians, psychologists, or psychiatrists;

g.�������� Certified clinical social workers and licensed clinical social workers;

h.�������� Certified clinical specialists in psychiatric and mental health nursing;

i.��������� Licensed professional counselors;

j.��������� Certified fee‑based practicing pastoral counselors;

k.�������� Substance abuse professionals certified under Article 5C of Chapter 90 of the General Statutes; and

l.��������� Licensed marriage and family and therapists.

(2)������ The following providers with appropriate substance abuse training and experience in the field of alcohol and other drug abuse as determined by the mental health case manager are authorized to provide treatment for chemical dependency in outpatient practice settings:

a.�������� Licensed physicians including, but not limited to, physicians who are certified in substance abuse by the American Society of Addiction Medicine (ASAM);

b.�������� Licensed or certified psychologists;

c.�������� Psychiatrists;

d.�������� Certified substance abuse counselors working under the direct supervision of such physicians, psychologists, or psychiatrists;

e.�������� Licensed psychological associates;

f.��������� Nurses working under the direct supervision of such physicians, psychologists, or psychiatrists;

g.�������� Certified clinical social workers and licensed clinical social workers;

h.�������� Certified clinical specialists in psychiatric and mental health nursing;

i.��������� Licensed professional counselors;

j.��������� Certified fee‑based practicing pastoral counselors;

1.�������� Substance abuse professionals certified under Article 5C of Chapter 90 of the General Statutes;

j1.������� Licensed marriage and family and therapists; and

k.�������� In the absence of meeting one of the criteria above, the Mental Health Case Manager could consider, on a case‑by‑case basis, a provider who supplies:

1.�������� Evidence of graduate education in the diagnosis and treatment of chemical dependency, and

2.�������� Supervised work experience in the diagnosis and treatment of chemical dependency (with supervision by an appropriately credentialed provider), and

3.�������� Substantive past and current continuing education in the diagnosis and treatment of chemical dependency commensurate with one's profession.

Provided, however, that nothing in this subsection shall prohibit the Plan from requiring the most cost‑effective treatment setting to be utilized by the person undergoing necessary care and treatment for chemical dependency.

(d)������ Benefits provided under this section shall be subject to a case management program for medical necessity and medical appropriateness consisting of (i) precertification of outpatient visits beyond 26 visits each Plan year, (ii) all electroconvulsive treatment, (iii) inpatient utilization review through preadmission and length‑of‑stay certification for nonemergency admissions to the following levels of care: inpatient units, partial hospitalization programs, residential treatment centers, chemical dependency detoxification and treatment programs, and intensive outpatient programs, (iv) length‑of‑stay certification of emergency inpatient admissions, and (v) a network of qualified, available providers of inpatient and outpatient psychiatric and chemical dependency treatment. Care which is not both medically necessary and medically appropriate will be noncertified, and benefits will be denied. Where qualified preferred providers of inpatient and outpatient care are reasonably available, use of providers outside of the preferred network shall be subject to a twenty percent (20%) coinsurance rate up to five thousand dollars ($5,000) per fiscal year to be assessed against each covered individual in addition to the general coinsurance percentage and maximum fiscal year amount specified by G.S. 135‑40.4 and G.S. 135‑40.6.

(e)������ For the purpose of this section, "emergency" is the sudden and unexpected onset of a condition manifesting itself by acute symptoms of sufficient severity that, in the absence of an immediate psychiatric or chemical dependency inpatient admission, could imminently result in injury or danger to self or others. (1991, c. 427, s. 32; 1993, c. 464, ss. 3(a), 4; 1995, c. 157, s. 2; c. 406, s. 2; 1997‑512, s. 14; 1999‑186, s. 1; 1999‑199, s. 3; 1999‑210, s. 8; 1999‑351, s. 7; 2001‑258, s. 1; 2001‑487, s. 40(n); 2003‑368, ss. 2, 3; 2004‑124, s. 31.28.)

 

§ 135‑40.8.� Out‑of‑pocket expenditures.

(a)������ For the balance of any fiscal year after each eligible employee, retired employee, or dependent satisfies the cash deductible, the Plan pays eighty percent (80%) of the eligible expenses outlined in G.S. 135‑40.6. The remaining twenty percent (20%) is paid by the covered individual until two thousand dollars ($2,000) per covered individual up to an aggregate of six thousand dollars ($6,000) per employee and child(ren) or employee and family coverage contract per fiscal year in excess of the deductible has been paid out of pocket. The Plan then pays one hundred percent (100%) of the remaining covered expenses.

(b)������ Repealed by Session Laws 2001‑253, s. 1(m), effective July 1, 2001.

(c)������ Notwithstanding any other provision of this Article, on the first day of each confinement the Plan does not pay the first one hundred fifty dollars ($150.00) of the room accommodation charge allowable under G.S. 135‑40.6(1). Any readmission within 60 days after discharge for the same reason shall be considered the same confinement for the purpose of this subsection. The exclusion made under this subsection shall not count toward the deductible nor toward the maximum amount of coinsurance out‑of‑pocket costs.

(c1)���� Notwithstanding any other provision of this Article, the Plan does not pay the first seventy‑five dollars ($75.00) of the facility fees and ancillary charges for allowable charges exceeding five hundred dollars ($500.00) per episode of care for hospital outpatient departments and ambulatory surgical facilities under G.S. 135‑40.6(4). Readmission within 30 days after discharge for the same reason shall be considered the same episode of care for the purpose of this subsection. The exclusion made under this subsection shall not count toward the deductible nor toward the maximum amount of coinsurance out‑of‑pocket costs.

(c2)���� Notwithstanding any other provision of this Article, the Plan does not pay the first two hundred dollars ($200.00) of allowable emergency room charges when admission to a hospital pursuant to the emergency room use does not immediately follow. This subsection shall apply only when less costly alternative means of emergency medical care are reasonably available as determined by the Executive Administrator and Board of Trustees. The exclusion made under this subsection shall not count toward the deductible nor toward the maximum amount of coinsurance out‑of‑pocket costs.

(c3)���� Notwithstanding any other provision of this Article, the Plan does not pay for the first fifteen dollars ($15.00) of allowable charges for each home, office, or skilled nursing facility visit under the provisions of G.S. 135‑40.6(7)a. and b., G.S. 135‑40.6(4), G.S. 135‑40.6(8)i., j., k., n., r., and s., and G.S. 135‑40.5(e). The co‑payment assessed by this subsection shall be assessed only once per person per provider per day and shall not apply to laboratory, pathology, and radiology services, or to charges for injected medications. The exclusion made under this subsection shall not count toward the deductible nor toward the maximum amount of coinsurance out‑of‑pocket costs.

(d)������ Where a network of qualified preferred providers of inpatient and outpatient hospital care is reasonably available for use by those individuals covered by the Plan, use of providers outside of the preferred network shall be subject to a twenty percent (20%) coinsurance rate up to five thousand dollars ($5,000) per fiscal year per covered individual up to an aggregate of fifteen thousand dollars ($15,000) per employee and child(ren) or employee and family coverage contract per fiscal year in addition to the general coinsurance percentage and maximum fiscal year amount specified by G.S. 135‑40.4 and G.S. 135‑40.6. The Plan then pays one hundred percent (100%) of the remaining covered expenses.

(e)������ Where qualified out‑of‑state preferred providers of medical care are not reasonably available in medical emergencies, the Plan pays the amounts covered by subsection (a) of this section. Any amount of charges for services under this section that exceeds the amount allowed by the Plan for the services of qualified preferred providers under this section shall be negotiated between the Plan and the provider of medical services, and the Plan shall ensure that the Plan member is not held financially responsible for the amount of these excess charges. If a Plan member is not capable of making a decision about choosing an in‑State qualified preferred provider and emergency services personnel transport the Plan member to a provider outside of the Plan network, then the coverage under this subsection shall apply. As used in this section, a "medical emergency" is the sudden and unexpected onset of a condition manifesting itself by acute symptoms of sufficient severity that, in the absence of immediate medical care, could imminently result in injury or danger to self or others. (1981 (Reg. Sess., 1982), c. 1398, s. 6; 1983, c. 922, s. 16; 1985, c. 192, ss. 4, 8, 10, 18; 1985 (Reg. Sess., 1986), c. 1020, s. 17; 1987, c. 857, s. 20; 1989, c. 752, s. 22(m), (n); 1989 (Reg. Sess., 1990), c. 1024, s. 2; 1991, c. 427, ss. 17, 33, 34; 2001‑253, s. 1(m); 2001‑513, s. 22(a); 2003‑284, ss. 30.19C(a), 30.19C(b); 2005‑276, s. 29.31(d).)

 

§ 135‑40.9.� Maximum benefits.

The maximum lifetime benefit for each covered individual will be five million dollars ($5,000,000). (1981 (Reg. Sess., 1982), c. 1398, s. 6; 1991, c. 427, s. 35; 1995, c. 507, s. 7.25; 2001‑253, s. 1(n).)

 

§ 135‑40.10.� Persons eligible for Medicare.

(a)������ Benefits payable for covered expenses under this Plan in G.S. 135‑40.5 through G.S. 135‑40.9 will be reduced by any benefits payable for the same covered expenses under Medicare, so that Medicare will be the primary carrier except where compliance with federal law specifies otherwise.

(b)������ For those participants eligible for Medicare, the State's plan will be administered on a "carve out" basis.� The provisions of the plan are applied to the charges not paid by Medicare (Parts A & B).� In other words, those charges not paid by Medicare would be subject to the deductible and coinsurance of the Plan just as if the charges not paid by Medicare were the total bill.

(c)������ For those individuals eligible for Part A (at no cost to them), benefits under this program will be reduced by the amounts to which the covered individuals would be entitled to under Parts A and B of Medicare, even if they choose not to enroll for Part B.

(d)������ Notwithstanding the foregoing provisions of this section or any other provisions of the Plan, the Executive Administrator and Board of Trustees may enter into negotiations with the Health Care Financing Administration, U.S. Department of Health and Human Services, in order to secure a more favorable coordination of the Plan's benefits with those provided by Medicare, including but not limited to, measures by which the Plan would provide Medicare benefits for all of its Medicare‑eligible members in return for adequate payments from the federal government in providing such benefits. Should such negotiations result in an agreement favorable to the Plan and its Medicare‑eligible members, the Executive Administrator and Board of Trustees may, after consultation with the Committee on Employee Hospital and Medical Benefits, implement such an agreement which shall supersede all other provisions of the Plan to the contrary related to its payment of claims for Medicare‑eligible members. (1981 (Reg. Sess., 1982), c. 1398, s. 6; 1985 (Reg. Sess., 1986), c. 1020, s. 18; 1987, c. 857, s. 21; 1989, c. 752, s. 22(o).)

 

§ 135‑40.11.� Cessation of coverage.

(a)������ Coverage under this Plan of an employee and his or her surviving spouse or eligible dependent children or of a retired employee and his or her surviving spouse or eligible dependent children shall cease on the earliest of the following dates:

(1)������ The last day of the month in which an employee or retired employee dies. Provided such surviving spouse or eligible dependent children were covered under the Plan at the time of death of the former employee or retired employee, or were covered on September 30, 1986, any such surviving spouse or eligible dependent children may then elect to continue coverage under the Plan by submitting written application to the Claims Processor and by paying the cost for such coverage when due at the applicable fees. Such coverage shall cease on the last day of the month in which such surviving spouse or eligible dependent children die, except as provided by this Article.

(2)������ The last day of the month in which an employee's employment with the State is terminated as provided in subsection (c) of this section.

(3)������ The last day of the month in which a divorce becomes final.

(4)������ The last day of the month in which an employee or retired employee requests cancellation of coverage.

(5)������ The last day of the month in which a covered individual enters active military service.

(6)������ The last day of the month in which a covered individual is found to have knowingly and willfully made or caused to be made a false statement or false representation of a material fact in a claim for reimbursement of medical services under the Plan. The Executive Administrator and Board of Trustees may make an exception to the provisions of this subdivision when persons subject to this subdivision have had a cessation of coverage for a period of five years and have made a full and complete restitution to the Plan for all fraudulent claim amounts. Nothing in this subdivision shall be construed to obligate the Executive Administrator and Board of Trustees to make an exception as allowed for under this subdivision.

(7)������ The last day of the month in which an employee who is Medicare‑eligible selects Medicare to be the primary payer of medical benefits. Coverage for a Medicare‑eligible spouse of an employee shall also cease the last day of the month in which Medicare is selected to be the primary payer of medical benefits for the Medicare‑eligible spouse. Such members are eligible to apply for conversion coverage.

(b)������ Coverage under this Plan as a dependent child ceases when the child ceases to be a dependent child as defined by G.S. 135‑40.1(3) except, coverage may continue under this Plan for a period of not more than 36 months after loss of dependent status on a fully contributory basis provided the dependent child was covered under the Plan at the time of loss of dependent status.

(b1)���� Coverage under the Plan as a surviving dependent child whether covered as a dependent of a surviving spouse, or as an individual member (no living parent), ceases when the child ceases to be a dependent child as defined by G.S. 135‑40.1(3), except coverage may continue under the Plan on a fully contributory basis for a period of not more than 36 months after loss of dependent status.

(c)������ Termination of employment shall mean termination for any reason, including layoff and leave of absence, except as provided in (a)(1) and (2) of this section, but shall not, for purposes of this Plan, include retirement upon which the employee is granted an immediate service or disability pension under and pursuant to a State‑supported Retirement System.

(1)������ In the event of termination for any reason other than death, coverage under the Plan for an employee and his or her eligible spouse or dependent children, provided the eligible spouse or dependent children were covered under the Plan at termination of employment may be continued for a period of not more than 18 months following termination of employment on a fully contributory basis. Employees who were covered under the Plan at termination of employment may be continued for a period of not more than 18 months or 29 months if determined to be disabled under the Social Security Act, Title II, OASDI or Title XVI, SSI.

(2)������ Repealed by Session Laws 1985 (Reg. Sess., 1986), c. 1020, s. 29(r).

(3)������ In the event of approved leave of absence without pay, other than for active duty in the armed forces of the United States, coverage under this Plan for an employee and his or her dependents may be continued during the period of such leave of absence by the employee's paying one hundred percent (100%) of the cost.

(4)������ If employment is terminated in the second half of a calendar month and the covered individual has made the required contribution for any coverage in the following month, that coverage will be continued to the end of the calendar month following the month in which employment was terminated.

(5)������ Employees paid for less than 12 months in a year, who are terminated at the end of the work year and who have made contributions for the non‑work months, will continue to be covered to the end of the period for which they have made contributions, with the understanding that if they are not employed by another State‑covered employer under this Plan at the beginning of the next work year, the employee will refund to the ex‑employer the amount of the employer's cost paid for them during the non‑paycheck months.

(6)������ Any employee receiving benefits pursuant to Article 6 of this Chapter when the employee has less than five years of retirement membership service, or an employee on leave of absence without pay due to illness or injury for up to 12 months, is entitled to continued coverage under the Plan for the employee and any eligible dependents by the employee's paying one hundred percent (100%) of the cost.

(d)������ No benefits will be paid by this Plan for any expenses incurred or treatment received after cessation of coverage as provided in subsections (a) or (b) of this section, except that in the event of hospital confinement at that time, hospitalization benefits as described in G.S. 135‑40.6 will continue to the extent provided therein.

(e)������ A legally divorced spouse and any eligible dependent children of a covered employee or retired employee may continue coverage under this Plan for a period of not more than 36 months following the first of the month after a divorce becomes final on a fully contributory basis, provided the former spouse and any eligible dependent children were covered under the Plan at the time a divorce became final.

(f)������� A legally separated spouse of a covered employee or retired employee may continue coverage under this Plan for a period not to exceed 36 months from the separation date on a fully contributory basis, provided the separated spouse was covered under the Plan at the time of separation and provided the covered employee's or retired employee's actions result in the loss of coverage for the separated spouse. Eligible dependent children may also continue coverage if covered under the Plan at time of separation, provided the employee's or retired employee's actions result in the loss of coverage for the dependent children.

(g)������ Whenever this section gives a right to continuation coverage, such coverage must be elected no later than a date set by the Executive Administrator and Board of Trustees.

(h)������ Continuation coverage under this Plan shall not be continued past the occurrence of any one of the following events:

(1)������ The termination of the Plan.

(2)������ Failure of a Plan member to pay monthly in advance any required premiums.

(3)������ A person becomes a covered employee or a dependent of a covered employee under any group health plan and that group health plan has no restrictions or limitations on benefits.

(4)������ A person becomes eligible for Medicare benefits on or after the effective date of the continuation coverage.

(5)������ The person was determined to be no longer disabled, provided the 18‑month coverage was extended to 29 months due to having been determined to be disabled under the Social Security Act, Title II, OASDI or Title XVI, SSI.

(6)������ The person reaches the maximum applicable continuation period of 18, 29, or 36 months.

(i)������� Notice requirements concerning continuation coverage shall be developed by the Executive Administrator and Board of Trustees.

(j)������� The spouse and any eligible dependent children of a covered employee may continue coverage under the Plan on a fully contributory basis for a period not to exceed 36 months from the date the employee becomes eligible for Medicare benefits which results in a loss of coverage under the Plan, provided that the spouse and eligible dependent children were covered under the Plan at the time the employee became eligible for Medicare benefits which results in a loss of coverage under the Plan. (1981 (Reg. Sess., 1982), c. 1398, s. 6; 1983, c. 922, ss. 17, 19‑21; 1985, c. 732, ss. 13, 34; 1985 (Reg. Sess., 1986), c. 1020, ss. 19, 29(m)‑(x); 1987, c. 738, s. 29(o); 1989, c. 752, s. 22(p); 1991, c. 427, s. 42; 1995, c. 278, s. 2; 1997‑512, ss. 32‑35; 2000‑184, s. 4.)

 

§ 135‑40.12.� Conversion.

(a)������ Upon a cessation of group coverage under the Plan and/or eligibility for group coverage under the Plan, an employee or dependent shall be entitled to a conversion to nongroup coverage without the necessity of a physical examination. Such conversion coverage shall include hospitalization, surgical, and medical benefits as contained in the major medical and alternative plan conversion provisions of Article 53 of Chapter 58 of the General Statutes. The Executive Administrator and Board of Trustees in their sole discretion shall approve the conversion coverage, which shall be administered by the Claims Processor through an insurance contract arranged by the Claims Processor, or administered as otherwise directed by the Executive Administrator and Board of Trustees. An eligible employee or dependent must apply for conversion coverage within 30 days after termination of group eligibility.

(b)������ The Executive Administrator and Board of Trustees shall provide for the continuation of conversion privilege exercised under the predecessor plan, on a fully contributory basis. The Executive Administrator and Board of Trustees shall consult with the Committee on Employee Hospital and Medical Benefits before taking action under this subsection. (1981 (Reg. Sess., 1982), c. 1398, s. 6; 1983, c. 922, s. 21.6; 1985, c. 732, ss. 30, 56; 1985 (Reg. Sess., 1986), c. 1020, s. 20.)

 

§ 135‑40.13.� Coordination of benefits.

(a)������ Benefits Subject to This Provision. � All of the benefits provided under this Comprehensive Major Medical Plan.

(b)������ Definitions. �

(1)������ "Plan" means any Plan providing benefits or services for or by reason of medical or dental care or treatment, which benefits or services are provided by (i) group, blanket or franchise insured or uninsured coverage, (ii) hospital services prepayment Plan on a group basis, medical service prepayment Plan on a group basis, group practice, or other prepayment coverage on a group basis, (iii) any coverage under labor‑management trusteed plans, union welfare plans, employer organization plans, or employee benefit organization plans, and (iv) any coverage under governmental programs except Medicare, or any coverage required or provided by any statute, which coverage is not otherwise excluded from the calculation of benefits under this Plan, but the term "Plan" shall not include any individual policies.

����������������� The term "Plan" shall be construed separately with respect to each policy, contract, or other arrangement for benefits or services and separately with respect to that portion of any such policy, contract, or other arrangement which reserves the right to take the benefits or services of other plans into consideration in determining its benefits and that portion which does not.

(2)������ "Covered services" means any necessary, reasonable and customary item of expense at least a portion of which is covered under at least one of the plans covering the person for whom claim is made. To the extent legally possible, it shall be synonymous with allowable expenses. When a Plan provides benefits in the form of services rather than cash payments, the reasonable cash value of each service rendered shall be deemed to be both an allowable expense and a benefit paid.

(3)������ "Claim determination period" means any period of time during which a person covered by this Plan is eligible to receive benefits.

(c)������ Effect on Benefits. �

(1)������ This provision shall apply in determining the benefits as to a person covered under this Plan for any claim determination period if, for the covered services incurred as to such a person during such claim determination period, the sum of:

a.�������� The benefits that would be payable under this Plan in the absence of this provision, and

b.�������� The benefits that would be payable under all other plans in the absence therein of provisions of similar purpose of this provision would exceed the usual and customary charges for such covered services.

(2)������ As to any claim determination period with respect to which this provision is applicable, the benefits that would be payable under this Plan in the absence of this provision for the covered services incurred as to such person during such claim determination period shall be reduced to the extent necessary so that the sum of such reduced benefit and all the benefits payable for such covered services under all other plans, except as provided in Item (3) immediately below, shall not exceed the total of such covered services. Benefits payable under another Plan include the benefits that would have been payable had claim been duly made therefor. In the case of another Plan which does not contain a provision coordinating its benefits, the benefits of such other Plan shall be determined before the benefits of this Plan. A Plan without a coordination of benefits provision shall be deemed to be the primary carrier within the meaning of this Plan.

(3)������ If:

a.�������� Another Plan which is involved in Item (2) immediately above and which contains provisions coordinating its benefits with those of this Plan would, according to its rules, determine its benefits after the benefits of this Plan have been determined, and

b.�������� The rules set forth in Item (4) immediately below would require this Plan to determine its benefits before such other Plan, then the benefits of such other plan will be ignored for the purposes of determining the benefits under this Plan.

(4)������ For the purposes of Item (3) immediately above, the rules establishing the order of benefit determination are:

a.�������� The benefits of a Plan which covers the person on whose covered services claim is based other than as a dependent shall be determined before the benefits of a Plan which covers such person as a dependent;

b.�������� Except as stated in sub‑subdivision c of this subdivision when this Plan and another Plan cover the same child as a dependent of different persons called parents:

1.�������� the benefits of the Plan of the parent whose birthday falls earlier in the calendar year are determined before the benefits of the Plan of the parent whose birthday falls later in the calendar year; but

2.�������� if both parents have the same birthday, the benefits of the Plan that has covered a parent for a longer period of time are determined before those of the Plan that has covered the other parent for a shorter period of time; however, if the other Plan has a rule based on the gender of the parent, and if as a result, the Plans do not agree on the order of benefits, the rule in the other Plan will determine the order of benefits.

c.�������� If two or more Plans cover a person as a dependent child of divorced or separated parents, benefits for the child are determined in this order:

1.�������� first, the Plan of the parent with custody of the child;

2.�������� second, the Plan of the spouse of the parent with custody of the child; and

3.�������� third, the Plan of the parent not having custody of the child.

����������� However, if the specific terms of a court decree state that one of the parents is responsible for the health care expenses of the child, and the entity obligated to pay or provide the benefits of the Plan of that parent has actual knowledge of those terms, the benefits of that Plan are determined first. This paragraph does not apply with respect to any claim determination period or Plan year during which any benefits are actually paid or provided before the entity has actual knowledge.

d.�������� The benefits of a Plan that covers the person as an employee who is neither laid off nor retired (or as that employee's dependent) are determined before those of a Plan that covers that person as a laid‑off or retired employee (or as that employee's dependent). If the other Plan does not have this rule, and if, as a result, the Plans do not agree on the order of benefits, this rule is ignored.

e.�������� When rules a and b immediately above do not establish an order of benefit determination, the benefits of a Plan which has covered the person on whose covered services claim is based for the longer period of time shall be determined before the benefits of a Plan which had covered such person for the shorter period of time.

(5)������ When this provision operates to reduce the total amount of benefits otherwise payable as to a person covered under this Plan during any claim determination period, each benefit that would be payable in the absence of this provision shall be reduced proportionately, and such reduced amount shall be charged against any applicable benefit limit of this Plan.

(d)������ Medicare Participants' Eligibility. � In the case of employees eligible under the Plan who are also eligible for Medicare benefits, benefits under the Plan will be paid in coordination with Medicare benefits in a manner consistent with federal law.

(e)������ Right to Receive and Release Necessary Information. � For the purpose of determining the applicability of and implementing the terms of this provision of this Plan or any provision of similar purpose of any other Plan, the Claims Processor may, without the consent of or notice to any person, release to or obtain from any insurance company or other organization or person any information, with respect to any person, which the Claims Processor deems to be necessary for such purposes. Any person claiming benefits under this Plan shall furnish to the Claims Processor such information as may be necessary to implement the provision.

(f)������� Facility of Payment. � Whenever payments which should have been made under this Plan, in accordance with this provision, have been made under any other plans, the Claims Processor shall have the right, exercisable alone and in its sole discretion, to pay over to any organizations making such other payments any amounts it shall determine to be warranted in order to satisfy the intent of this provision, and amounts to be paid shall be deemed to be benefits paid under this Plan, and, to the extent of such payments, the Claims Processor shall be fully discharged from liability under the Plan.

(g)������ Right of Recovery. � Whenever payments have been made by the Claims Processor with respect to covered services in a total amount which is, at any time, in excess of the maximum amount of payment necessary at that time to satisfy the intent of this provision, irrespective of to whom paid, the Claims Processor shall have the right to recover such payments, to the extent of such excess, from among one or more of the following, as the Claims Processor shall determine: any persons to or for or with respect to whom such payments were made, any insurance companies, or any other organizations. (1981 (Reg. Sess., 1982), c. 1398, s. 6; 1983, c. 922, s. 18; 1985 (Reg. Sess., 1986), c. 1020, ss. 20, 30; 1989, c. 770, s. 35.)

 

§ 135‑40.13A.� Liability of third person; right of subrogation; right of first recovery.

Whenever the Plan pays benefits for hospital, surgical, medical, or prescription drug expenses, with respect to any Plan member, the Plan shall be subrogated, to the extent of any payments under the Plan, to all of the Plan member's rights of recovery against liable third parties, regardless of the entity or individual from whom recovery may be due. The Plan member shall do nothing to prejudice these rights. The Plan has the right to first recovery on any amounts so recovered, whether by the Plan or the Plan member, and whether recovered by litigation, arbitration, mediation, settlement, or otherwise. If the Plan is precluded from exercising its right of subrogation, it may exercise its rights of recovery to the extent allowed by law. If the Plan recovers damages from a third party in excess of the claims paid, any excess will be paid to the member, less a proportionate share of the costs of collection. In the event a Plan member recovers any amounts from a third party to which the Plan is entitled under this section, the Plan may recover the amounts directly from the Plan member. The Plan has a lien, for the value of claims paid related to the liability of the third party, on any damages subsequently recovered against the liable third party. If the Plan member fails to pursue the remedy against a liable third party, the Plan is subrogated to the rights of the Plan member and is entitled to enforce liability in the Plan's own name or in the name of the Plan member for the amount paid by the Plan. (2004‑124, s. 31.25.)

 

§ 135‑40.14.� Right to amend.

The General Assembly reserves the right to alter, amend, or repeal Parts 2 and 3 of this Article. (1981 (Reg. Sess., 1982), c. 1398, s. 6; 1985, c. 732, s. 62.)

 

Part 4.� Long‑Term Care Benefits.

§ 135‑41.� Undertaking.

(a)������ The State of North Carolina undertakes to make available an optional program of long‑term care benefits for the benefit of its qualified employees, retired employees and their dependents which will pay benefits in accordance with the terms hereof. Retired employees of the Local Governmental Employees' Retirement System pursuant to Article 3 of Chapter 128 of the General Statutes and their dependents are also eligible to be qualified for the benefits provided by this Part.

(b)������ The long‑term care benefits provided by this Part shall be made available through the Teachers' and State Employees' Comprehensive Major Medical Plan pursuant to Articles 2 and 3 of this Chapter (hereinafter called the "Plan") and administered by the Plan's Executive Administrator and Board of Trustees. In administering the benefits provided by this Part, the Executive Administrator and Board of Trustees shall have the same type of powers and duties that are provided under Part 3 of this Article for hospital and medical benefits. The benefits provided by this Part may be offered by the Plan on a self‑insured basis, in which case a third‑party claims processor shall be chosen through competitive bids in accordance with State law, or through a contract of insurance, in which case a carrier licensed to do business in North Carolina shall be selected on a competitive bid basis in accordance with State law.

(c)������ The benefits authorized by this Part are available only to qualified employees and retired employees who voluntarily elect to provide such benefits for themselves and their qualified dependents. Payroll deductions shall be available from employee salary and disability benefit payments and from retired employee retirement benefit payments for fully contributory premium amounts.

(d)������ The Executive Administrator and Board of Trustees of the Plan shall insure insofar as possible that the long‑term care benefits provided by this Part shall be tax‑qualified under federal law. (1997‑468, s. 7.)

 

§ 135‑41.1.� Long‑term care benefits.

Long‑term care benefits provided by this Part are subject to elimination periods, coinsurance provisions, and other limitations separate and apart from those provided for in Part 3 of this Article. No limitation on out‑of‑pocket expenses are provided for the benefits covered by this section. Long‑term care benefits are as follows:

(1)������ Nursing Home Benefits. � The Plan will pay a fixed amount of the reasonable and customary daily charges allowed for nursing facilities providing skilled nursing care and intermediate nursing care up to a maximum amount per day for each day after a fixed number of consecutive days for each nursing home stay. Such daily charges shall be inclusive of semiprivate room and board; skilled and semiskilled nursing services; routine laboratory tests and examinations; physical, occupational, and speech therapy; respiratory and other gas therapy; and drugs, injections, biologicals, fluids, solutions, dietary aids and supplements, and other routine medical supplies and equipment. Readmission to a nursing home within 180 days, exclusive of hospital stays, for the same or related cause or causes shall be considered a single nursing home stay for the purposes of this section. Benefits payable under this subdivision are contingent upon compliance with the following conditions and will, in no instance, be paid under this section without compliance with each of the following conditions:

a.�������� Confinement to a nursing home is medically appropriate due to an illness, disease, or injury upon recommendation of an admitting physician other than a proprietor, employee, or agent of the nursing home;

b.�������� Confinement to a nursing home is for any overnight stay for which a charge for a day's stay is due and payable; and

c.�������� Prior to confinement, the admitting physician secures approval certification from the Plan for confinement.

As used in this section, a nursing home is a facility or a part of a facility which is (i) operated under State law and which is qualified as a skilled nursing or intermediate nursing facility under Medicare; or is (ii) a facility meeting the requirements for licensure under Chapter 131E of the General Statutes.

(2)������ Custodial Benefits. � The Plan will pay a fixed percentage of the fixed amount of reasonable and customary daily charges allowed by the Plan in subdivision (1) of this section for assisted living facilities, for adult day care facilities, and for home care agencies up to a maximum amount per day for each day after a fixed number of consecutive days that such custodial care is provided. Benefits payable under this subdivision are contingent upon compliance with the following conditions and will, in no instance, be paid under this subdivision without compliance with each of the following conditions:

a.�������� Use of such custodial benefits is medically appropriate in a treatment plan established and certified initially and at least once every six months by an attending physician or other allied health professionals other than a proprietor, employee, or agent of one or more of the aforementioned facilities and agencies;

b.�������� Confinement to a nursing home would be medically appropriate without custodial care proposed to be rendered by one or more of the aforementioned facilities or agencies; and

c.�������� Prior to use of such custodial benefits, an attending physician or other allied health professional secures approval from the Plan for the use of the benefits.

As used in this section, an assisted living facility is a facility which (i) is operated under State law to provide residential care for the aged or disabled whose principal need is a home which provides personal care appropriate to their age or disability; or (ii) meets the requirements for licensure under Chapter 131D of the General Statutes. As used in this section, an adult care facility is a facility which (i) is operated under State law to provide group care for the aged and disabled in a setting away from their residence on a less than 24‑hour basis when such aged or disabled would otherwise be in need of full‑time personal care away from their residence; or (ii) meets the requirements for certification under Chapter 131D of the General Statutes. As used in this section, a home care agency is a residential care agency which is (i) operated under State law and which is qualified as a home health care agency under Medicare; or (ii) an agency meeting the requirements for licensure as a home care agency under Chapter 131E of the General Statutes.

(3)������ Other Benefits. � Upon prior approval of the Plan, other care, services, supplies, and equipment may be used as more cost‑effective alternatives to the benefits provided by this section when directed by an attending physician.

(4)������ The Executive Administrator and Board of Trustees of the Plan shall establish the payment percentages, maximum daily payment rates, benefit periods, elimination periods, and maximum lifetime benefits payable for each covered individual for the nursing home and custodial benefits provided by this section. The Executive Administrator and Board of Trustees shall provide for inflationary increases in the maximum daily payment rates and the maximum lifetime benefits payable for each covered individual.

(5)������ The Executive Administrator and Board of Trustees of the Plan shall provide a bed reservation benefit whenever Plan members are hospitalized during a stay in a nursing home or an assisted living facility.

(6)������ The Executive Administrator and Board of Trustees of the Plan shall provide for a waiver of premiums involving minimum lengths of stay in a nursing home or an assisted living facility. In addition, the Executive Administrator and Board of Trustees shall allow coverage to be reinstated upon failure to pay premiums, provided certain grace periods are not exceeded and retroactive premium payments are made.

(7)������ Limitations and Exclusions to Long‑Term Care Benefits. � The benefits provided by this section are for the purpose of meeting the requirements for assistance from the loss of functional capacity associated with a chronic illness, disease, or disabling injury for extended periods of time; and are, in no way, intended to duplicate the benefits provided for acute and other medical care provided by Medicare or Part 3 of this Article. A loss of functional capacity can occur from: (i) an illness, disease, or disabling injury resulting in a physical incapacity to perform the activities of daily living; or (ii) an irreversible organic mental impairment resulting in a mental incapacity. Activities of daily living consist of routine functions involving personal care and mobility. (1997‑468, s. 7.)

 

§ 135‑41.2.� Conversion.

Upon cessation of group coverage under this Part, an employee, retired employee, or dependent shall be entitled to a conversion to a nongroup plan of long‑term care benefits. The Executive Administrator and Board of Trustees of the Plan shall determine how the conversion rights authorized by this Part shall be administered. (1997‑468, s. 7.)

 

§ 135‑41.3.� Right to alter, amend, or repeal.

The General Assembly reserves the right to alter, amend, or repeal this Part. (1997‑468, s. 7.)

 

Part 5.� Health Insurance Program for Children.

§ 135‑42.� Undertaking.

(a)������ The State of North Carolina undertakes to make available a health insurance program for children (hereinafter called the "Program") to provide comprehensive acute medical care to low‑income, uninsured children who are residents of this State and who meet the eligibility requirements established for the Program under Part 8 of Article 2 of Chapter 108A of the General Statutes. The Executive Administrator and Board of Trustees of the North Carolina Teachers' and State Employees' Comprehensive Major Medical Plan (hereinafter called the "Plan") shall administer the Program under this Part and shall carry out their duties and responsibilities in accordance with Parts 2 and 3 of this Article and with applicable provisions of Part 8 of Article 2 of Chapter 108A. The Plan's self‑insured indemnity program shall not incur any financial obligations for the Program in excess of the amount of funds that the Plan's self‑insured indemnity program receives for the Program.

(b)������ The benefits provided under the Program shall be equivalent to and made available through the Plan pursuant to Articles 2 and 3 of this Chapter and as provided under G.S. 108A‑70.21(b) and administered by the Plan's Executive Administrator and Board of Trustees. To the extent there is a conflict between the provisions of Part 8 of Article 2 of Chapter 108A and Part 3 of this Article pertaining to eligibility, fees, deductibles, copayments, and other cost‑sharing charges, the provisions of Part 8 of Article 2 of Chapter 108A shall control. In administering the benefits provided by this Part, the Executive Administrator and Board of Trustees shall have the same type of powers and duties that are provided under Part 3 of this Article for hospital and medical benefits.

(c)������ The benefits authorized by this Part are available only to children who are residents of this State and who meet the eligibility requirements established for the Program under Part 8 of Article 2 of Chapter 108A of the General Statutes. (1998‑1, s. 4(a).)

 

§ 135‑42.1.� Right to alter, amend, or repeal.

The General Assembly reserves the right to alter, amend, or repeal this Part. (1998‑1, s. 4(a).)

 

§§ 135‑43 through 135‑49.� Reserved for future codification purposes.