00CS FOR HOUSE BILL NO. 393(HES)                                                                                          
01 "An Act relating to managed care for recipients of medical assistance; and                                              
02 providing for an effective date."                                                                                       
03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
04    * Section 1.  FINDINGS AND PURPOSE.  The Legislature finds that                                                      
05   (1)  the Medicaid program has provided adequate health care for low income                                            
06 individuals in the state since its enactment in Alaska in 1972;                                                         
07   (2)  Medicaid program costs have increased an average of 13.9 percent a year                                          
08 over the past five years, and the number of eligible individuals has grown from 57,251 in                               
09 1991 to 86,445 in fiscal year 1995 due to the addition of services and eligible groups by the                           
10 Congress and the Alaska State Legislature;                                                                              
11   (3)  Medicaid program management has evolved from a fee-for-service payment                                           
12 structure to a point where, by 1995, 94 percent of the states include some type of managed                              
13 care model in at least one geographic area of their state;                                                              
14   (4)  primary care case management offers an effective system of care, similar                                         

01 to the existing fee-for-service environment, which can generate program savings and preserve                            
02 quality of care, and which has been successful in both urban and rural areas; and                                       
03   (5)  Alaska has many unique features due to the geography, weather, and wide                                          
04 dispersion of population centers that challenge the ability to have successful managed care                             
05 systems in the state; however, the projected downturn in state revenue requires the state to                            
06 seek creative solutions in providing health care coverage for low-income persons at a reduced                           
07 cost in the future.                                                                                                     
08    * Sec. 2.  MANAGED CARE PROGRAM.  (a)  The Department of Health and Social                                           
09 Services shall develop managed care systems for recipients of medical assistance under                                  
10 AS 47.07 under which the department would contract with one or more individuals or entities                             
11 for the management of health services for the recipients.  The department shall implement two                           
12 competitive, innovative managed care pilot projects in one or more predominantly urban areas                            
13 of the state that take into account the unique features of the project areas and include a rural                        
14 element, if feasible.  The department shall involve affected consumers and providers of health                          
15 care services in the project areas in the development and implementation of the managed care                            
16 plan.                                                                                                                   
17  (b) The Department of Health and Social Services may require that a recipient of                                       
18 medical assistance under AS 47.07 must participate in a managed care system developed under                             
19 (a) of this section in order to remain eligible for medical assistance under AS 47.07.  This                            
20 participation requirement may be based on geographical, financial, social, medical, and other                           
21 factors that the Department of Health and Social Services determines are relevant to the                                
22 development and efficient management of the managed care system.                                                        
23  (c)  The Department of Health and Social Services may apply for waivers of federal                                     
24 law or for other federal approval that is required in order to implement a managed care system                          
25 developed under (a) of this section.                                                                                    
26  (d)  Upon developing a system required under (a) of this section, the Department of                                    
27 Health and Social Services shall submit draft legislation for implementation of the proposed                            
28 system to the legislature on the first day of the First Regular Session of the Twentieth Alaska                         
29 State Legislature.                                                                                                      
30    * Sec. 3.  This Act takes effect immediately under AS 01.10.070(c).