With North Carolina recently ranked as having the most expensive healthcare in the country, state lawmakers have passed a sweeping bipartisan bill aimed at lowering costs and improving transparency for patients.
House Bill 434, titled the “Lower Health Care Costs Act,” passed third reading in the North Carolina Senate on Wednesday by a vote of 42 to 3. The three “no” votes were Democrats Rep. Gale Adcock, D-Wake; Rep. Sophia Chitlik, D-Durham; and Rep. Natalie Murdock, D-Durham.
The North Carolina House passed the “Lower Health Care Costs Act” at the end of April by a vote of 109-1. The lone dissenter in that vote was Rep. Vernetta Alston, D-Durham.
The bill’s primary sponsors include Reps. John Bell; Timothy Reeder, R-Pitt; Tricia Cotham, R-Mecklenburg; and Grant Campbell, R-Cabarrus, and the co-sponsors list reflects bipartisan support.
The legislation seeks to rein in rising healthcare expenses by reforming prior authorization processes, mandating pricing transparency, enhancing billing protections, and selectively dismantling portions of the state’s Certificate of Need (CON) laws — a regulatory framework long criticized for limiting competition in healthcare markets.
One of the bill’s most notable provisions is its elimination of CON requirements for rehabilitation facilities, diagnostic centers, and in-home hospice services. These targeted rollbacks are intended to make it easier for new providers to enter the market or expand services without first receiving state approval — a requirement that critics say protects hospital monopolies and suppresses innovation.
While the bill stops short of fully repealing CON laws — which still apply to hospitals, surgical centers, and other high-cost services — it represents a measured shift toward deregulation.
Tackling Price Transparency
House Bill 434 also takes aim at pricing practices by requiring hospitals and surgical centers to report average self-pay charges for the most common inpatient, outpatient, and imaging procedures. These figures would be published quarterly by the state Department of Health and Human Services, with noncompliance carrying financial penalties tied to executive compensation.
According to the legislation, penalties would amount to “…0.01% of the facility’s CEO’s total annual salary per day, not to exceed two thousand dollars ($2,000) per day.”
In addition, the legislation standardizes prior authorization procedures for insurers, ensuring they use evidence-based criteria and make timely decisions that are “developed in accordance with nationally recognized medical standards, evidence-based guidelines, and best practices.”
Under the bill, insurance companies’ failure to respond within 24 hours for urgent care and 72 hours for non-urgent would result in automatic approval of care.
Insurers would also need to provide up-to-date, publicly available lists of services requiring prior authorization and allow appeals to be reviewed only by qualified, in-state specialists with no conflicts of interest. The legislation outlines that any appeal for coverage must be reviewed by a physician who:
“a) is licensed in North Carolina,
b) practices in the same or a similar specialty,
c) has at least five years of clinical experience,
d) and was not involved in the initial adverse determination.”
Stronger Consumer Protections
The bill strengthens protections for patients navigating complex billing systems. Among its mandates, are advanced notice when out-of-network providers may be involved in care; plain-language, itemized bills before any collection efforts, and good faith estimates for upcoming procedures.
These provisions are slated to take effect between January and October 2026, depending on the component and necessary rulemaking. However, the North Carolina Healthcare Association, which represents hospitals, has opposed similar measures at the state level, arguing that they are not necessary because Congress passed the “No Surprises Act” in 2020 which was signed by President Donald Trump during his first term. It establishes certain consumer protections including barring providers from charging more for out-of-network emergency care than they would for in-network.
The push for reform comes as North Carolina leads the nation in healthcare costs. The state’s healthcare prices are 28% above the national average.
The issue has been a priority in the state legislature this session, with Senate Bill 316 passing the Senate chamber back in March, sponsored by Sen. Jim Burgin, R-Harnett, Sen. Benton Sawrey, R-Johnston, and Sen. Amy Galey, R-Alamance. It was more narrow than HB 434 and focused on prior authorization measures only.
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