00 CS FOR SENATE BILL NO. 74(HSS) 01 "An Act relating to a medical assistance reform program; relating to the duties of the 02 Department of Health and Social Services; establishing medical assistance 03 demonstration projects; relating to civil penalties for medical assistance fraud; relating 04 to studies by the Department of Health and Social Services; relating to cost-containment 05 measures for medical assistance; and providing for an effective date." 06 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 07  * Section 1. AS 47.05 is amended by adding new sections to read: 08 Sec. 47.05.202. False claims for medical assistance; civil penalty. (a) A 09 person may not 10 (1) knowingly submit, authorize, or cause to be submitted to a medical 11 assistance agency a false or fraudulent claim for payment or approval; 12 (2) knowingly make, use, or cause to be made or used, a false record or 13 statement to get a false or fraudulent claim for payment paid or approved by the 01 medical assistance program under AS 47.07; 02 (3) conspire to defraud the medical assistance program by getting a 03 false or fraudulent claim paid or approved; 04 (4) knowingly make, use, or cause to be made or used, a false record or 05 statement to conceal, avoid, or decrease an obligation to pay or transmit money or 06 property to the medical assistance program under AS 47.07. 07 (b) A violation under this section is punishable by a civil penalty of not less 08 than $100 and not more than $25,000 in addition to the costs and fees associated with 09 an enforcement action brought under AS 37.10.090 and 37.10.100. 10 (c) In addition to a civil penalty and costs and fees assessed under (b) of this 11 section, and except as provided under (d) of this section, a court shall award damages 12 in an amount that is three times the amount of actual damages sustained by the state 13 for a violation of (a) of this section. 14 (d) A court may reduce the damages assessed for a violation of (a) of this 15 section to the amount of actual damages sustained by the state and waive the civil 16 penalty allowed under (b) of this section if the court finds, by a preponderance of the 17 evidence, that the person who committed the violation furnished a state official who is 18 investigating the violation with all information known to that person about the 19 violation and fully cooperated with the investigation, and the information and 20 cooperation led state officials to discover additional violations within 30 days after 21 receiving the information. 22 (e) The damages and penalties available under this section are not exclusive, 23 and the remedies provided are in addition to other remedies provided by applicable 24 law. 25 (f) In this section, "knowingly" means that a person, with or without specific 26 intent to defraud, 27 (1) has actual knowledge of the information; 28 (2) acts in deliberate ignorance of the truth or falsity of the 29 information; or 30 (3) acts in reckless disregard of the truth or falsity of the information. 31 Sec. 47.05.203. Department authority to impose civil penalties. The 01 department may adopt regulations to assess the civil penalties provided under 02 AS 47.05.202(b) against a medical assistance provider, and, if the penalties are not 03 paid, the department may refer the case to the attorney general for prosecution under 04 AS 47.05.202. 05  * Sec. 2. AS 47.05 is amended by adding a new section to read: 06 Sec. 47.05.260. Medical assistance reform program. (a) The department 07 shall adopt regulations to design and implement a program for reforming the state 08 medical assistance program under AS 47.07. The reform program must include 09 (1) referrals to community and social support services, including career 10 and education training services available through the Department of Labor and 11 Workforce Development under AS 23.15, the University of Alaska, or other sources; 12 (2) distribution of an explanation of medical assistance benefits to 13 recipients for health care services received under the program; 14 (3) expanding the use of telemedicine for primary care, behavioral 15 health, and urgent care; 16 (4) enhancing fraud prevention, detection, and enforcement; 17 (5) reducing the cost of behavioral health, senior, and disabilities 18 services provided to recipients of medical assistance under the state's home and 19 community-based services waiver under AS 47.07.045; 20 (6) pharmacy initiatives; 21 (7) enhanced care management; 22 (8) redesigning the payment process by implementing fee agreements 23 based on performance measures that include premium payments for centers of 24 excellence according to nationally acceptable criteria and penalties for hospital 25 acquired infections, readmissions, and failures of outcomes; 26 (9) stakeholder involvement in setting annual targets for quality and 27 cost-effectiveness; 28 (10) to the extent consistent with federal law, reducing travel costs by 29 requiring a recipient to obtain medical services in the recipient's home community, to 30 the extent appropriate services are available in the recipient's home community. 31 (b) The department shall identify the areas of the state where improvements in 01 access to telemedicine would be most effective in reducing the costs of medical 02 assistance and improving access to health care services for medical assistance 03 recipients. The department shall make efforts to improve access to telemedicine for 04 recipients in those locations. The department may enter into agreements with Indian 05 Health Service providers, if necessary, to improve access by medical assistance 06 recipients to telemedicine facilities and equipment. 07 (c) On or before October 15 of each year, the Department of Health and Social 08 Services shall prepare a report and submit the report to the senate secretary and the 09 chief clerk of the house of representatives and notify the legislature that the report is 10 available. The report must include 11 (1) realized cost savings related to reform efforts under this section; 12 (2) realized cost savings related to medical assistance reform efforts 13 undertaken by the department other than the reform efforts described in this Act; 14 (3) a statement of whether the Department of Health and Social 15 Services has met annual targets for quality and cost-effectiveness; 16 (4) recommendations for legislative or budgetary changes related to 17 medical assistance reforms during the next fiscal year; 18 (5) changes in federal laws that the department expects will result in a 19 cost or savings to the state of more than $1,000,000; 20 (6) a description of any medical assistance grants, options, or waivers 21 the department applied for in the previous fiscal year; 22 (7) the results of demonstration projects the department has 23 implemented; 24 (8) legal and technological barriers to the expanded use of 25 telemedicine, improvements in the use of telemedicine in the state, and 26 recommendations for changes or investments that would allow cost-effective 27 expansion of telemedicine; 28 (9) the percentage decrease in costs of travel for medical assistance 29 recipients compared to the previous fiscal year; 30 (10) the percentage decrease in the number of medical assistance 31 recipients identified as frequent users of emergency departments compared to the 01 previous fiscal year; 02 (11) the percentage increase or decrease in the number of hospital 03 readmissions within 30 days after a hospital stay for medical assistance recipients 04 compared to the previous fiscal year; 05 (12) the percentage increase or decrease in average state general fund 06 spending for each medical assistance recipient compared to the previous fiscal year; 07 (13) the percentage increase or decrease in uncompensated care costs 08 incurred by medical assistance providers compared to the percentage change in private 09 health insurance premiums for individual and small group health insurance. 10 (d) In this section, "telemedicine" means the practice of health care delivery, 11 evaluation, diagnosis, consultation, or treatment, using the transfer of medical data 12 through audio, visual, or data communications that are performed over two or more 13 locations between providers who are physically separated from the recipient or from 14 each other. 15  * Sec. 3. AS 47.07 is amended by adding a new section to read: 16 Sec. 47.07.038. Reduction of nonurgent use of emergency department  17 services by medical assistance recipients; project. (a) On or before September 1, 18 2015, the department shall design and implement a project to reduce nonurgent use of 19 emergency departments by recipients of medical assistance under this chapter and 20 improve appropriate care in appropriate settings for recipients. The project under this 21 section must include 22 (1) to the extent consistent with federal law, a system for electronic 23 exchange of patient information among emergency departments; 24 (2) a process for defining and identifying frequent users of emergency 25 departments; 26 (3) a procedure for educating patients about the use of emergency 27 departments and appropriate alternative services and facilities for nonurgent care; 28 (4) to the extent consistent with federal law, a process to disseminate 29 lists of frequent users to hospital personnel to ensure that frequent users can be 30 identified through the electronic information exchange system described under (1) of 31 this subsection; 01 (5) a process for assisting frequent users with plans of care and for 02 assisting patients in making appointments with primary care providers within 96 hours 03 after an emergency department visit; 04 (6) strict guidelines for the prescribing of narcotics; 05 (7) a prescription monitoring program; 06 (8) designation of medical personnel to review feedback reports 07 regarding emergency department use. 08 (b) The department shall adopt regulations necessary to implement this section 09 and request technical assistance from and apply to the United States Department of 10 Health and Human Services for waivers or amendments to the state plan as necessary 11 to implement the projects under this section. 12  * Sec. 4. AS 47.07 is amended by adding a new section to read: 13 Sec. 47.07.076. Report to legislature. (a) The department and the attorney 14 general shall annually prepare a report relating to the medical assistance program 15 under AS 47.07. The report must identify 16 (1) the amount and source of funds used to prevent or prosecute fraud, 17 abuse, payment errors, and errors in eligibility determinations for the previous fiscal 18 year; 19 (2) actions taken to address fraud, abuse, payment errors, and errors in 20 eligibility determinations during the previous fiscal year; 21 (3) specific examples of fraud or abuse that were prevented or 22 prosecuted; 23 (4) identification of vulnerabilities in the medical assistance program, 24 including any vulnerabilities identified by independent auditors with whom the 25 department contracts under AS 47.05.200; 26 (5) initiatives the department has taken to prevent fraud or abuse; 27 (6) recommendations to increase effectiveness in preventing and 28 prosecuting fraud and abuse; 29 (7) the return to the state for every dollar expended by the department 30 and the attorney general to prevent and prosecute fraud and abuse; 31 (8) estimated payment error rate measurement for the medical 01 assistance program; 02 (9) results from the Medicaid Eligibility Quality Control program. 03 (b) On or before October 15 of each year, the department shall submit the 04 report required under this section to the senate secretary and the chief clerk of the 05 house of representatives and notify the legislature that the report is available. 06  * Sec. 5. The uncodified law of the State of Alaska is amended by adding a new section to 07 read: 08 MEDICAID MANAGED CARE OR CASE MANAGEMENT DEMONSTRATION 09 PROJECT. (a) On or before January 31, 2016, the Department of Health and Social Services 10 shall design and initiate one or more managed care or case management demonstration 11 projects. The department shall contract with a third party to provide managed care or case 12 management services for a group or groups of individuals who qualify for medical assistance 13 under AS 47.07 and may separate a group or groups of individuals into different managed 14 care or case management demonstration projects based on efficiency and cost savings. The 15 purpose of a demonstration project is to ensure sustainability while reducing the cost of 16 medical assistance payments and increasing access to and improving the quality of care 17 available to all medical assistance recipients. A project or projects developed under this 18 section may include 19 (1) comprehensive care management; 20 (2) care coordination, including the assignment of a primary care case 21 manager located in the local geographic area of the recipient; 22 (3) health promotion; 23 (4) mental health parity as described in 42 U.S.C. 300gg-26.3; 24 (5) comprehensive transitional care from and follow-up to inpatient treatment; 25 (6) individual and family support; 26 (7) referral to community and social support services, including career and 27 education training services available through the Department of Labor and Workforce 28 Development under AS 23.15, the University of Alaska, or other sources. 29 (b) The department shall enter into contracts with one or more third-party primary 30 care case managers, managed care organizations, prepaid ambulatory health plans, or prepaid 31 inpatient health plans to implement the project established under this section. The contract 01 must provide for a fee based on a per capita expense that is fair and economical. The 02 department or administrator shall develop a comprehensive system of prior authorizations for 03 payment of services under the project. However, prior authorization may not be required for 04 mental health or primary care services. 05 (c) The department or a third-party administrator shall designate health care providers 06 or one or more teams of health care providers to provide services that are primary care and 07 patient centered as described by the department for purposes of a project under this section. 08 The department or a third-party administrator shall enter into necessary provider and fee 09 agreements. For primary care case managers, the fee agreement must include an incentive- 10 based management fee system. The fee agreements may not be based on a fee for service but 11 must be based on performance measures, as determined by the department. 12 (d) A project under this section must include additional cost-saving measures that 13 include innovations to 14 (1) reduce travel through the expanded use of telemedicine for primary care, 15 urgent care, and behavioral health services; to the extent legal barriers prevent the expanded 16 use of telemedicine, the department shall identify those barriers; 17 (2) simplify administrative procedures for providers, including streamlined 18 audit, payment, and stakeholder engagement procedures. 19 (e) In this section, "department" means the Department of Health and Social Services. 20  * Sec. 6. The uncodified law of the State of Alaska is amended by adding a new section to 21 read: 22 DEPARTMENT OF HEALTH AND SOCIAL SERVICES FEASIBILITY STUDY. 23 (a) The department shall conduct a study analyzing the feasibility of privatizing services 24 delivered at Alaska Pioneers' Homes, the Alaska Psychiatric Institute, and select facilities of 25 the division of juvenile justice. The department shall deliver a report summarizing the 26 department's conclusions to the senate secretary and the chief clerk of the house of 27 representatives and notify the legislature that the report is available within 10 days after the 28 convening of the Second Regular Session of the Twenty-Ninth Alaska State Legislature. 29 (b) In this section, "department" means the Department of Health and Social Services. 30  * Sec. 7. The uncodified law of the State of Alaska is amended by adding a new section to 31 read: 01 MEDICAID STATE PLAN; WAIVERS; INSTRUCTIONS; NOTICE TO REVISOR 02 OF STATUTES. The Department of Health and Social Services shall amend and submit for 03 federal approval a state plan for medical assistance coverage consistent with this Act. The 04 Department of Health and Social Services shall apply to the United States Department of 05 Health and Human Services for any waivers necessary to implement this Act. The 06 commissioner of health and social services shall certify to the revisor of statutes if the 07 provisions of AS 47.05.260(a)(5), (8), and (10), added by sec. 2 of this Act, the provisions of 08 AS 47.07.038, added by sec. 3 of this Act, and the provision of sec. 5 of this Act are approved 09 by the United States Department of Health and Human Services. 10  * Sec. 8. The uncodified law of the State of Alaska is amended by adding a new section to 11 read: 12 TRANSITION: REGULATIONS. The Department of Health and Social Services may 13 adopt regulations necessary to implement the changes made by this Act. The regulations take 14 effect under AS 44.62 (Administrative Procedure Act), but not before the effective date of the 15 relevant provision of this Act implemented by the regulation. 16  * Sec. 9. The uncodified law of the State of Alaska is amended by adding a new section to 17 read: 18 CONDITIONAL EFFECT. (a) AS 47.05.260(a)(5), enacted by sec. 2 of this Act, takes 19 effect only if the commissioner of health and social services certifies to the revisor of statutes 20 under sec. 7 of this Act, on or before October 1, 2017, that all of the provisions added by that 21 section have been approved by the United States Department of Health and Human Services. 22 (b) AS 47.05.260(a)(8), enacted by sec. 2 of this Act, takes effect only if the 23 commissioner of health and social services certifies to the revisor of statutes under sec. 7 of 24 this Act, on or before October 1, 2017, that all of the provisions added by that section have 25 been approved by the United States Department of Health and Human Services. 26 (c) AS 47.05.260(a)(10), enacted by sec. 2 of this Act, takes effect only if the 27 commissioner of health and social services certifies to the revisor of statutes under sec. 7 of 28 this Act, on or before October 1, 2017, that all of the provisions added by that section have 29 been approved by the United States Department of Health and Human Services. 30 (d) AS 47.07.038, enacted by sec. 3 of this Act, takes effect only if the commissioner 31 of health and social services certifies to the revisor of statutes under sec. 7 of this Act, on or 01 before October 1, 2017, that all of the provisions added by that section have been approved by 02 the United States Department of Health and Human Services. 03 (e) Section 5 of this Act takes effect only if the commissioner of health and social 04 services certifies to the revisor of statutes under sec. 7 of this Act, on or before October 1, 05 2017, that all of the provisions added by that section have been approved by the United States 06 Department of Health and Human Services. 07  * Sec. 10. If AS 47.05.260(a)(5), enacted by sec. 2 of this Act, takes effect, it takes effect on 08 the day after the date the commissioner of health and social services makes a certification to 09 the revisor of statutes under secs. 7 and 9(a) of this Act. 10  * Sec. 11. If AS 47.05.260(a)(8), enacted by sec. 2 of this Act, takes effect, it takes effect on 11 the day after the date commissioner of health and social services makes a certification to the 12 revisor of statutes under secs. 7 and 9(b) of this Act. 13  * Sec. 12. If AS 47.05.260(a)(10) takes effect, it takes effect on the day after the date the 14 commissioner of health and social services makes a certification to the revisor of statutes 15 under secs. 7 and 9(c) of this Act. 16  * Sec. 13. If AS 47.07.038, enacted by sec. 3 of this Act, takes effect, it takes effect on the 17 day after the date the commissioner of health and social services makes a certification to the 18 revisor of statutes under secs. 7 and 9(d) of this Act.  19  * Sec. 14. If sec. 5 of this Act takes effect, it takes effect on the day after the date the 20 commissioner of health and social services makes a certification to the revisor of statutes 21 under secs. 7 and 9(e) of this Act. 22  * Sec. 15. Sections 6, 7, and 8 of this Act take effect immediately under AS 01.10.070(c).