00 CS FOR SENATE BILL NO. 74(STA) 01 "An Act relating to competitive bidding for medical assistance products and services; 02 relating to verification of eligibility for public assistance programs administered by the 03 Department of Health and Social Services; relating to eligibility for medical assistance; 04 relating to a medical assistance reform program; relating to the duties of the 05 Department of Health and Social Services; establishing medical assistance 06 demonstration projects; relating to civil penalties for medical assistance fraud; relating 07 to studies by the Department of Health and Social Services; relating to cost-containment 08 measures for medical assistance; and providing for an effective date." 09 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 10  * Section 1. AS 47.05.015 is amended by adding a new subsection to read: 11 (e) Notwithstanding (c) of this section, the department may enter into a 12 contract through the competitive bidding process under AS 36.30 (State Procurement 01 Code) for medical assistance products and services offered under AS 47.07.030 if the 02 contract is for durable medical equipment or specific medical services that can be 03 delivered on a statewide basis. 04  * Sec. 2. AS 47.05 is amended by adding a new section to article 1 to read: 05 Sec. 47.05.105. Computerized eligibility verification system. (a) The 06 department shall establish a computerized income, asset, and identity eligibility 07 verification system for the purposes of verifying eligibility, eliminating duplication of 08 public assistance payments, and deterring waste and fraud in public assistance 09 programs administered by the department under AS 47.05.010. 10 (b) The department shall enter into a competitively bid contract with a third- 11 party vendor for the purpose of developing a system under this section for verifying an 12 applicant's eligibility for public assistance before the payment of benefits and for 13 periodically verifying eligibility between eligibility redeterminations and during 14 eligibility redeterminations and reviews under AS 47.05.110 - 47.05.120. The 15 department may also contract with a third-party vendor to provide information to 16 facilitate reviews of recipient eligibility conducted by the department. 17  * Sec. 3. AS 47.05 is amended by adding new sections to read: 18 Sec. 47.05.202. False claims for medical assistance; civil penalty. (a) A 19 person may not 20 (1) knowingly submit, authorize, or cause to be submitted to a medical 21 assistance agency a false or fraudulent claim for payment or approval; 22 (2) knowingly make, use, or cause to be made or used, a false record or 23 statement to get a false or fraudulent claim for payment paid or approved by the 24 medical assistance program under AS 47.07; 25 (3) conspire to defraud the medical assistance program by getting a 26 false or fraudulent claim paid or approved; 27 (4) knowingly make, use, or cause to be made or used, a false record or 28 statement to conceal, avoid, or decrease an obligation to pay or transmit money or 29 property to the medical assistance program under AS 47.07. 30 (b) A violation under this section is punishable by a civil penalty of not less 31 than $100 and not more than $25,000 in addition to the costs and fees associated with 01 an enforcement action brought under AS 37.10.090 and 37.10.100. 02 (c) In addition to a civil penalty and costs and fees assessed under (b) of this 03 section, and except as provided under (d) of this section, a court shall award damages 04 in an amount that is three times the amount of actual damages sustained by the state 05 for a violation of (a) of this section. 06 (d) A court may reduce the damages assessed for a violation of (a) of this 07 section to the amount of actual damages sustained by the state and waive the civil 08 penalty allowed under (b) of this section if the court finds, by a preponderance of the 09 evidence, that the person who committed the violation furnished a state official who is 10 investigating the violation with all information known to that person about the 11 violation and fully cooperated with the investigation, and the information and 12 cooperation led state officials to discover additional violations within 30 days after 13 receiving the information. 14 (e) The damages and penalties available under this section are not exclusive, 15 and the remedies provided are in addition to other remedies provided by applicable 16 law. 17 (f) In this section, "knowingly" means that a person, with or without specific 18 intent to defraud, 19 (1) has actual knowledge of the information; 20 (2) acts in deliberate ignorance of the truth or falsity of the 21 information; or 22 (3) acts in reckless disregard of the truth or falsity of the information. 23 Sec. 47.05.203. Department authority to impose civil penalties. The 24 department may adopt regulations to assess the civil penalties provided under 25 AS 47.05.202(b) against a medical assistance provider, and, if the penalties are not 26 paid, the department may refer the case to the attorney general for prosecution under 27 AS 47.05.202. 28  * Sec. 4. AS 47.05 is amended by adding a new section to read: 29 Sec. 47.05.260. Medical assistance reform program. (a) The department 30 shall adopt regulations to design and implement a program for reforming the state 31 medical assistance program under AS 47.07. The reform program must include 01 (1) referrals to community and social support services, including career 02 and education training services available through the Department of Labor and 03 Workforce Development under AS 23.15, the University of Alaska, or other sources; 04 (2) distribution of an explanation of medical assistance benefits to 05 recipients for health care services received under the program; 06 (3) expanding the use of telemedicine for primary care, behavioral 07 health, and urgent care; 08 (4) enhancing fraud prevention, detection, and enforcement; 09 (5) reducing the cost of behavioral health, senior, and disabilities 10 services provided to recipients of medical assistance under the state's home and 11 community-based services waiver under AS 47.07.045; 12 (6) pharmacy initiatives; 13 (7) enhanced care management; 14 (8) redesigning the payment process by implementing fee agreements 15 that include 16 (A) premium payments for centers of excellence; 17 (B) penalties for hospital-acquired infections, readmissions, 18 and outcome failures; 19 (C) bundled payments for specific episodes of care; and 20 (D) global payments for contracted payers, primary care 21 managers, and case managers for a recipient or for care related to a specific 22 diagnosis; 23 (9) stakeholder involvement in setting annual targets for quality and 24 cost-effectiveness; 25 (10) to the extent consistent with federal law, reducing travel costs by 26 requiring a recipient to obtain medical services in the recipient's home community, to 27 the extent appropriate services are available in the recipient's home community. 28 (b) The department shall identify the areas of the state where improvements in 29 access to telemedicine would be most effective in reducing the costs of medical 30 assistance and improving access to health care services for medical assistance 31 recipients. The department shall make efforts to improve access to telemedicine for 01 recipients in those locations. The department may enter into agreements with Indian 02 Health Service providers, if necessary, to improve access by medical assistance 03 recipients to telemedicine facilities and equipment. 04 (c) On or before October 15 of each year, the Department of Health and Social 05 Services shall prepare a report and submit the report to the senate secretary and the 06 chief clerk of the house of representatives and notify the legislature that the report is 07 available. The report must include 08 (1) realized cost savings related to reform efforts under this section; 09 (2) realized cost savings related to medical assistance reform efforts 10 undertaken by the department other than the reform efforts described in this Act; 11 (3) a statement of whether the Department of Health and Social 12 Services has met annual targets for quality and cost-effectiveness; 13 (4) recommendations for legislative or budgetary changes related to 14 medical assistance reforms during the next fiscal year; 15 (5) changes in federal laws that the department expects will result in a 16 cost or savings to the state of more than $1,000,000; 17 (6) a description of any medical assistance grants, options, or waivers 18 the department applied for in the previous fiscal year; 19 (7) the results of demonstration projects the department has 20 implemented; 21 (8) legal and technological barriers to the expanded use of 22 telemedicine, improvements in the use of telemedicine in the state, and 23 recommendations for changes or investments that would allow cost-effective 24 expansion of telemedicine; 25 (9) the percentage decrease in costs of travel for medical assistance 26 recipients compared to the previous fiscal year; 27 (10) the percentage decrease in the number of medical assistance 28 recipients identified as frequent users of emergency departments compared to the 29 previous fiscal year; 30 (11) the percentage increase or decrease in the number of hospital 31 readmissions within 30 days after a hospital stay for medical assistance recipients 01 compared to the previous fiscal year; 02 (12) the percentage increase or decrease in average state general fund 03 spending for each medical assistance recipient compared to the previous fiscal year; 04 (13) the percentage increase or decrease in uncompensated care costs 05 incurred by medical assistance providers compared to the percentage change in private 06 health insurance premiums for individual and small group health insurance; 07 (14) the cost, in state and federal funds, for providing optional services 08 under AS 47.07.030(b). 09 (d) In this section, "telemedicine" means the practice of health care delivery, 10 evaluation, diagnosis, consultation, or treatment, using the transfer of medical data 11 through audio, visual, or data communications that are performed over two or more 12 locations between providers who are physically separated from the recipient or from 13 each other. 14  * Sec. 5. AS 47.07.020(d) is amended to read: 15 (d) Notwithstanding (a) of this section, additional [ADDITIONAL] groups, 16 including groups added on or after March 23, 2010, to the list of persons for  17 whom the Social Security Act requires Medicaid coverage under 42 U.S.C. 1396 -  18 1396p (Title XIX, Social Security Act), may not be added unless approved by the 19 legislature. 20  * Sec. 6. AS 47.07 is amended by adding a new section to read: 21 Sec. 47.07.038. Reduction of nonurgent use of emergency department  22 services by medical assistance recipients; project. (a) On or before September 1, 23 2015, the department shall design and implement a project to reduce nonurgent use of 24 emergency departments by recipients of medical assistance under this chapter and 25 improve appropriate care in appropriate settings for recipients. The project under this 26 section must include 27 (1) to the extent consistent with federal law, a system for electronic 28 exchange of patient information among emergency departments; 29 (2) a process for defining and identifying frequent users of emergency 30 departments; 31 (3) a procedure for educating patients about the use of emergency 01 departments and appropriate alternative services and facilities for nonurgent care; 02 (4) to the extent consistent with federal law, a process to disseminate 03 lists of frequent users to hospital personnel to ensure that frequent users can be 04 identified through the electronic information exchange system described under (1) of 05 this subsection; 06 (5) a process for assisting frequent users with plans of care and for 07 assisting patients in making appointments with primary care providers within 96 hours 08 after an emergency department visit; 09 (6) strict guidelines for the prescribing of narcotics; 10 (7) a prescription monitoring program; 11 (8) designation of medical personnel to review feedback reports 12 regarding emergency department use. 13 (b) The department shall adopt regulations necessary to implement this section 14 and request technical assistance from and apply to the United States Department of 15 Health and Human Services for waivers or amendments to the state plan as necessary 16 to implement the projects under this section. 17  * Sec. 7. AS 47.07 is amended by adding a new section to read: 18 Sec. 47.07.076. Report to legislature. (a) The department and the attorney 19 general shall annually prepare a report relating to the medical assistance program 20 under AS 47.07. The report must identify 21 (1) the amount and source of funds used to prevent or prosecute fraud, 22 abuse, payment errors, and errors in eligibility determinations for the previous fiscal 23 year; 24 (2) actions taken to address fraud, abuse, payment errors, and errors in 25 eligibility determinations during the previous fiscal year; 26 (3) specific examples of fraud or abuse that were prevented or 27 prosecuted; 28 (4) identification of vulnerabilities in the medical assistance program, 29 including any vulnerabilities identified by independent auditors with whom the 30 department contracts under AS 47.05.200; 31 (5) initiatives the department has taken to prevent fraud or abuse; 01 (6) recommendations to increase effectiveness in preventing and 02 prosecuting fraud and abuse; 03 (7) the return to the state for every dollar expended by the department 04 and the attorney general to prevent and prosecute fraud and abuse; 05 (8) estimated payment error rate measurement for the medical 06 assistance program; 07 (9) results from the Medicaid Eligibility Quality Control program. 08 (b) On or before October 15 of each year, the department shall submit the 09 report required under this section to the senate secretary and the chief clerk of the 10 house of representatives and notify the legislature that the report is available. 11  * Sec. 8. The uncodified law of the State of Alaska is amended by adding a new section to 12 read: 13 MEDICAID MANAGED CARE OR CASE MANAGEMENT DEMONSTRATION 14 PROJECT. (a) On or before January 31, 2016, the Department of Health and Social Services 15 shall design and initiate one or more managed care or case management demonstration 16 projects. The department shall contract with a third party to provide managed care or case 17 management services for a group or groups of individuals who qualify for medical assistance 18 under AS 47.07 and may separate a group or groups of individuals into different managed 19 care or case management demonstration projects based on efficiency and cost savings. The 20 purpose of a demonstration project is to ensure sustainability while reducing the cost of 21 medical assistance payments and increasing access to and improving the quality of care 22 available to all medical assistance recipients. A project or projects developed under this 23 section may include 24 (1) comprehensive care management; 25 (2) care coordination, including the assignment of a primary care case 26 manager located in the local geographic area of the recipient; 27 (3) health promotion; 28 (4) mental health parity as described in 42 U.S.C. 300gg-26.3; 29 (5) comprehensive transitional care from and follow-up to inpatient treatment; 30 (6) individual and family support; 31 (7) referral to community and social support services, including career and 01 education training services available through the Department of Labor and Workforce 02 Development under AS 23.15, the University of Alaska, or other sources. 03 (b) The department shall enter into contracts with one or more third-party primary 04 care case managers, managed care organizations, prepaid ambulatory health plans, or prepaid 05 inpatient health plans to implement the project established under this section. The contract 06 must provide for a fee based on a per capita expense that is fair and economical. The 07 department or administrator shall develop a comprehensive system of prior authorizations for 08 payment of services under the project. However, prior authorization may not be required for 09 mental health or primary care services. 10 (c) The department or a third-party administrator shall designate health care providers 11 or one or more teams of health care providers to provide services that are primary care and 12 patient centered as described by the department for purposes of a project under this section. 13 The department or a third-party administrator shall enter into necessary provider and fee 14 agreements. For primary care case managers, the fee agreement must include an incentive- 15 based management fee system. The fee agreements may not be based on a fee for service but 16 must be based on performance measures, as determined by the department. 17 (d) A project under this section must include additional cost-saving measures that 18 include innovations to 19 (1) reduce travel through the expanded use of telemedicine for primary care, 20 urgent care, and behavioral health services; to the extent legal barriers prevent the expanded 21 use of telemedicine, the department shall identify those barriers; 22 (2) simplify administrative procedures for providers, including streamlined 23 audit, payment, and stakeholder engagement procedures. 24 (e) In this section, "department" means the Department of Health and Social Services. 25  * Sec. 9. The uncodified law of the State of Alaska is amended by adding a new section to 26 read: 27 DEPARTMENT OF HEALTH AND SOCIAL SERVICES FEASIBILITY STUDY. 28 (a) The department shall conduct a study analyzing the feasibility of privatizing services 29 delivered at Alaska Pioneers' Homes, the Alaska Psychiatric Institute, and select facilities of 30 the division of juvenile justice. The department shall deliver a report summarizing the 31 department's conclusions to the senate secretary and the chief clerk of the house of 01 representatives and notify the legislature that the report is available within 10 days after the 02 convening of the Second Regular Session of the Twenty-Ninth Alaska State Legislature. 03 (b) In this section, "department" means the Department of Health and Social Services. 04  * Sec. 10. The uncodified law of the State of Alaska is amended by adding a new section to 05 read: 06 MEDICAID STATE PLAN; WAIVERS; INSTRUCTIONS; NOTICE TO REVISOR 07 OF STATUTES. The Department of Health and Social Services shall amend and submit for 08 federal approval a state plan for medical assistance coverage consistent with this Act. The 09 Department of Health and Social Services shall apply to the United States Department of 10 Health and Human Services for any waivers necessary to implement this Act. The 11 commissioner of health and social services shall certify to the revisor of statutes if the 12 provisions of AS 47.05.260(a)(5), (8), and (10), added by sec. 4 of this Act, the provisions of 13 AS 47.07.038, added by sec. 6 of this Act, and the provisions of sec. 8 of this Act are 14 approved by the United States Department of Health and Human Services. 15  * Sec. 11. The uncodified law of the State of Alaska is amended by adding a new section to 16 read: 17 TRANSITION: REGULATIONS. The Department of Health and Social Services may 18 adopt regulations necessary to implement the changes made by this Act. The regulations take 19 effect under AS 44.62 (Administrative Procedure Act), but not before the effective date of the 20 relevant provision of this Act implemented by the regulation. 21  * Sec. 12. The uncodified law of the State of Alaska is amended by adding a new section to 22 read: 23 CONDITIONAL EFFECT. (a) AS 47.05.260(a)(5), enacted by sec. 4 of this Act, takes 24 effect only if the commissioner of health and social services certifies to the revisor of statutes 25 under sec. 10 of this Act, on or before October 1, 2017, that all of the provisions added by 26 AS 47.05.260(a)(5) have been approved by the United States Department of Health and 27 Human Services. 28 (b) AS 47.05.260(a)(8), enacted by sec. 4 of this Act, takes effect only if the 29 commissioner of health and social services certifies to the revisor of statutes under sec. 10 of 30 this Act, on or before October 1, 2017, that all of the provisions added by AS 47.05.260(a)(8) 31 have been approved by the United States Department of Health and Human Services. 01 (c) AS 47.05.260(a)(10), enacted by sec. 4 of this Act, takes effect only if the 02 commissioner of health and social services certifies to the revisor of statutes under sec. 10 of 03 this Act, on or before October 1, 2017, that all of the provisions added by 04 AS 47.05.260(a)(10) have been approved by the United States Department of Health and 05 Human Services. 06 (d) AS 47.07.038, enacted by sec. 6 of this Act, takes effect only if the commissioner 07 of health and social services certifies to the revisor of statutes under sec. 10 of this Act, on or 08 before October 1, 2017, that all of the provisions added by AS 47.07.038 have been approved 09 by the United States Department of Health and Human Services. 10 (e) Section 8 of this Act takes effect only if the commissioner of health and social 11 services certifies to the revisor of statutes under sec. 10 of this Act, on or before October 1, 12 2017, that all of the provisions added by sec. 8 of this Act have been approved by the United 13 States Department of Health and Human Services. 14  * Sec. 13. If AS 47.05.260(a)(5), enacted by sec. 4 of this Act, takes effect, it takes effect on 15 the day after the date the commissioner of health and social services makes a certification to 16 the revisor of statutes under secs. 10 and 12(a) of this Act. 17  * Sec. 14. If AS 47.05.260(a)(8), enacted by sec. 4 of this Act, takes effect, it takes effect on 18 the day after the date the commissioner of health and social services makes a certification to 19 the revisor of statutes under secs. 10 and 12(b) of this Act. 20  * Sec. 15. If AS 47.05.260(a)(10), enacted by sec. 4 of this Act, takes effect, it takes effect 21 on the day after the date the commissioner of health and social services makes a certification 22 to the revisor of statutes under secs. 10 and 12(c) of this Act. 23  * Sec. 16. If AS 47.07.038, enacted by sec. 6 of this Act, takes effect, it takes effect on the 24 day after the date the commissioner of health and social services makes a certification to the 25 revisor of statutes under secs. 10 and 12(d) of this Act.  26  * Sec. 17. If sec. 8 of this Act takes effect, it takes effect on the day after the date the 27 commissioner of health and social services makes a certification to the revisor of statutes 28 under secs. 10 and 12(e) of this Act. 29  * Sec. 18. Sections 9 - 12 of this Act take effect immediately under AS 01.10.070(c).