Medicaid Services

April 22, 1996

Barbara D. Matula, Director Division of Medical Assistance North Carolina Department of Human Resources 1985 Umstead Drive, Kirby Building Raleigh, North Carolina 27603-2001

RE: Advisory Opinion; Application of House Bill 773 to Medicaid Services; N.C.G.S. §58-5138, N.C.G.S. §58-50-115 and N.C.G.S. §58-50-110

Dear Ms. Matula:

You request our opinion whether N.C.G.S. §58-51-38 applies to any Medicaid recipients, including Medicaid’s Carolina Access Program enrollees or Medicaid recipients enrolled in HMO’s under contract to the Division of Medical Assistance. For reasons which follow, it is our opinion that N.C.G.S. §58-51-38 does not apply to any Medicaid recipients, including Carolina Access enrollees or Medicaid recipients enrolled in HMO’s under contract to the Division of Medical Assistance.

N.C.G.S. §58-51-38 was enacted by Chapter 63 of the 1995 Session Laws and is entitled "Direct Access to Obstetrician-Gynecologists." This particular statute was included in Chapter 58 of the North Carolina General Statutes, which Chapter is normally referred to as the Insurance Law. Chapter 58 sets forth the duties and responsibilities of the Commissioner of Insurance, including his responsibilities to approve certain insurance policies and insurance plans. Under the provisions of N.C.G.S. §58-51-38, health benefit plans must "allow each female plan participant or beneficiary age 13 or older direct access within the health benefit plan, without prior referral, to the health care services of an obstetrician-gynecologist participating in the health benefit plan, within the benefits provided under that health benefit plan pertaining to obstetrician-gynecologist services." In addition, this statute requires that health benefit plans must inform their female participants and beneficiaries in writing that they do not need any prior referral by the plan.

. Medicaid’s Carolina Access Program requires recipients in some rural areas to be referred to an obstetrician, gynecologist or other physician specialist by their primary care providers who authorize payment by Medicaid. You question whether the Division of Medical Assistance may continue to deny payment of Medicaid claims for obstetric/gynecologic services that have not been authorized by the Medicaid recipient/enrollee’s Carolina ACCESS primary care provider. You also ask whether N.C.G.S. §58-51-38 applies to Medicaid recipients in general, and Medicaid recipients enrolled in full risk, capitated health plans under contract with the Division of Medical Assistance.

All states that participate in the Medicaid Program are required to submit a State Plan describing the nature and scope of that state’s Medicaid Program. This plan has to be approved before there can be federal financial participation in that Medicaid Program. 42 C.F.R. §430.10. This State Plan must designate a single state agency to administer or supervise the administration of the Medicaid plan for that state. 42 C.F.R. §431.10(b)(1).

In order for an agency to qualify as the Medicaid Agency- (1) The agency must not delegate, to other than its own officials, authority to-

(i)

Exercise administrative discretion in the administration or supervision of the plan, or

(ii)

Issue policies, rules, and regulations on program matters.

(2)

The authority of the agency must not be impaired if any of its rules, regulations, or decisions are subject to review, clearance, or similar action by other offices or agencies of the State.

(3)

If other State or local agencies or offices perform services for the Medicaid agency, they must not have the authority to change or disapprove any administrative decision of that agency, or otherwise substitute their judgment for that of the Medicaid agency with respect to the application of policies, rules, and regulations issued by the Medicaid agency. 42 C.F.R. §431.10(e).

Under the State Plan for Medicaid, the North Carolina Department of Human Resources is the single State agency solely responsible for the regulation and implementation of the State/Federal Medicaid Program. As the division of the North Carolina Department of Human Resources solely responsible for the Medicaid Program, the Division of Medical Assistance and its policies, rules and regulations for the Medicaid Program are not subject to review clearance or regulation by the North Carolina Department of Insurance.

N.C.G.S. §58-51-38 refers to N.C.G.S. §58-50-110(11) for the definition of "health benefit plans." N.C.G.S. §58-50-110(11) essentially defines "health benefit plans" as those plans which are subject to N.C.G.S. §58-50-115. That statute states: "a health benefit plan is subject to this Act if it provides health benefits for small employers or self-employed individuals" and if a number of conditions are met. "Benefits" are defined in N.C.G.S. §58-51-38 as "medical services or other items to which an individual is entitled under the terms of her contract with a health benefit plan, as approved by the Department of Insurance." Medicaid is not a health benefit plan for "small employers or self-employed individuals." Medicaid is a cooperative federal-state program for providing medical assistance to certain classes of needy persons. 42. U.S.C. §1396 et. seq.; N.C.G.S. §108A-54 to 56.

For these reasons N.C.G.S. §58-51-38 does not apply to Medicaid recipients, Carolina Access enrollees or Medicaid recipients enrolled in HMO’s under contract to the Division of Medical Assistance.

We hope the foregoing is helpful.

Ann Reed Senior Deputy Attorney General

Claud R. Whitener, III

Assistant Attorney General