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SB 74: "An Act relating to permanent fund dividends; relating to a medical assistance reform program; establishing a personal health savings account program for medical assistance recipients; relating to the duties of the Department of Health and Social Services; establishing medical assistance demonstration projects; and relating to a study by the Department of Health and Social Services."

00                             SENATE BILL NO. 74                                                                          
01 "An Act relating to permanent fund dividends; relating to a medical assistance reform                                   
02 program; establishing a personal health savings account program for medical assistance                                  
03 recipients; relating to the duties of the Department of Health and Social Services;                                     
04 establishing medical assistance demonstration projects; and relating to a study by the                                  
05 Department of Health and Social Services."                                                                              
06 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
07    * Section 1. AS 43.23 is amended by adding a new section to read:                                                  
08            Sec. 43.23.074. Contribution to personal health savings accounts. A                                        
09       recipient of medical assistance under AS 47.07 who is eligible to receive a permanent                             
10       fund dividend may elect to have 10 percent of the recipient's annual permanent fund                               
11       dividend deposited into a personal health savings account established under                                       
12       AS 47.07.038. The department shall establish an application process to allow an                                   
13       applicant, or the parent, legal guardian, or other authorized representative of an                                
01       unemancipated minor, to request that the department pay 10 percent of the applicant's                             
02       dividend directly to the applicant's personal health savings account.                                             
03    * Sec. 2. AS 47.05 is amended by adding a new section to read:                                                     
04            Sec. 47.05.250. Medical assistance reform program. (a) The department                                      
05       shall adopt regulations to design and implement a program for reforming the state                                 
06       medical assistance program under AS 47.07. The reform program must include                                        
07                 (1)  procedures to allow a medical assistance recipient to use a personal                               
08       health savings account under AS 47.07.038 for payment of premiums, copayments,                                    
09       and deductibles if required of the recipient;                                                                     
10                 (2)  referrals to community and social support services, including job                                  
11       training;                                                                                                         
12                 (3)  distribution of an explanation of medical assistance benefits to                                   
13       recipients for health care services received under the program;                                                   
14                 (4)  expanding the use of telemedicine for primary care and urgent care;                                
15                 (5)  enhancing fraud prevention, detection, and enforcement;                                            
16                 (6)  reducing the cost of behavioral health, senior, and disabilities                                   
17       services provided to recipients of medical assistance under the state's home and                                  
18       community-based services waiver under AS 47.07.045;                                                               
19                 (7)  pharmacy initiatives;                                                                              
20                 (8)  enhanced care management;                                                                          
21                 (9)  redesigning the payment process;                                                                   
22                 (10)  stakeholder involvement in setting annual targets for quality and                                 
23       cost-effectiveness;                                                                                               
24                 (11)  to the extent consistent with federal law, reducing travel costs by                               
25       requiring a recipient to obtain medical services in the recipient's home community, to                            
26       the extent appropriate services are available in the recipient's home community.                                  
27            (b)  Annually, the Department of Health and Social Services shall prepare a                                  
28       report and submit the report to the senate secretary and the chief clerk of the house of                          
29       representatives and notify the legislature that the report is available within 10 days                            
30       after the convening of the regular session. The report must include                                               
31                 (1)  realized cost savings related to reform efforts under this section;                                
01                 (2)  realized cost savings related to medical assistance reform efforts                                 
02       undertaken by the department other than the reform efforts described in this Act; and                             
03                 (3)  a statement of whether the Department of Health and Social                                         
04       Services has met annual targets for quality and cost-effectiveness.                                               
05    * Sec. 3. AS 47.07 is amended by adding a new section to read:                                                     
06            Sec. 47.07.038. Personal health savings account program. The department                                    
07       shall develop and implement a personal health savings account program for the benefit                             
08       of medical assistance recipients who elect to participate in the program. The program                             
09       must include                                                                                                      
10                 (1)  consumer education strategies;                                                                     
11                 (2)  recipient cost-sharing and copayment structures;                                                   
12                 (3)  a procedure for deposits in and payments from health savings                                       
13       accounts; and                                                                                                     
14                 (4)  a procedure for educating recipients about the application process                                 
15       established by the Department of Revenue under AS 43.23.074 to allow recipients                                   
16       who are eligible to receive a permanent fund dividend to elect to have 10 percent of                              
17       the dividend annually deposited in a personal health savings account.                                             
18    * Sec. 4. AS 43.23.074; AS 47.05.250; and AS 47.07.038 are repealed October 1, 2022.                               
19    * Sec. 5. The uncodified law of the State of Alaska is amended by adding a new section to                          
20 read:                                                                                                                   
21       MEDICAID MANAGED CARE DEMONSTRATION PROJECT FOR                                                                   
22 INDIVIDUALS ENROLLED IN DENALI KIDCARE; OPT IN FOR OTHER RECIPIENTS.                                                    
23 (a) On or before October 1, 2015, the Department of Health and Social Services shall design                             
24 and initiate a managed care demonstration project for individuals who qualify for medical                               
25 assistance under AS 47.07.020(b)(13) or (14) and for other medical assistance recipients who                            
26 opt in to the managed care demonstration project. The purpose of the demonstration project is                           
27 to ensure sustainability while reducing the cost of medical assistance payments and increasing                          
28 access to and improving the quality of care available to all medical assistance recipients. The                         
29 project developed under this section may include                                                                        
30            (1)  comprehensive care management;                                                                          
31            (2)  care coordination, including the assignment of a primary care case                                      
01 manager located in the local geographic area of the recipient;                                                          
02            (3)  health promotion;                                                                                       
03            (4)  mental health parity as described in 42 U.S.C. 300gg-26.3;                                              
04            (5)  comprehensive transitional care from and follow-up to inpatient treatment;                              
05            (6)  individual and family support;                                                                          
06            (7)  referral to community and social support services, including job training.                              
07       (b)  The department may enter into contracts with one or more third-party                                         
08 administrators to implement the project established under this section. The contract must                               
09 provide for a fee based on a per capita administrative expense that is fair and economical. The                         
10 department or administrator shall develop a comprehensive system of prior authorizations and                            
11 presumptive eligibility determinations for payment of services under the project. However,                              
12 prior authorization may not be required for mental health or primary care services.                                     
13       (c)  The department shall designate health care providers or one or more teams of                                 
14 health care providers to provide services that are primary care and patient centered as                                 
15 described by the department for purposes of the project under this section. The department                              
16 shall enter into necessary provider and fee agreements. For primary care case managers, the                             
17 fee agreement must include an incentive-based management fee system. The fee agreements                                 
18 may not be based on a fee for service but must be based on performance measures, as                                     
19 determined by the department. The performance measures must include premium payments                                    
20 for centers of excellence according to nationally acceptable criteria and penalties for hospital-                       
21 acquired infections, readmissions, and failures of outcomes.                                                            
22       (d)  The project under this section must include additional cost-saving measures that                             
23 include innovations to                                                                                                  
24            (1)  reduce travel through the expanded use of telemedicine for primary and                                  
25 urgent care services; to the extent legal barriers prevent the expanded use of telemedicine, the                        
26 department shall identify those barriers;                                                                               
27            (2)  simplify administrative procedures for providers, including streamlined                                 
28 audit, payment, and stakeholder engagement procedures.                                                                  
29       (e)  The project under this section must include a procedure to allow an election for                             
30 eligible medical assistance recipients under AS 47.07.020(b)(1) - (12) and (15) to opt in to the                        
31 managed care project.                                                                                                   
01       (f)  The department shall adopt regulations necessary to implement this section and                               
02 request technical assistance from and apply to the United States Department of Health and                               
03 Human Services for waivers or amendments to the state plan as necessary to implement the                                
04 project under this section.                                                                                             
05       (g)  The project established under this section terminates October 1, 2022.                                       
06       (h)  In this section, "department" means the Department of Health and Social Services.                            
07    * Sec. 6. The uncodified law of the State of Alaska is amended by adding a new section to                          
08 read:                                                                                                                   
09       REDUCTION OF NONURGENT USE OF EMERGENCY DEPARTMENT                                                                
10 SERVICES BY MEDICAL ASSISTANCE RECIPIENTS; DEMONSTRATION PROJECT.                                                       
11 (a) On or before September 1, 2015, the Department of Health and Social Services shall                                  
12 design and implement a demonstration project to reduce nonurgent use of emergency                                       
13 departments by recipients of medical assistance under AS 47.07 and improve appropriate care                             
14 in appropriate settings for recipients. The project under this section must include                                     
15            (1)  to the extent consistent with federal law, a system for electronic exchange                             
16 of patient information among emergency departments;                                                                     
17            (2)  a process for defining and identifying frequent users of emergency                                      
18 departments;                                                                                                            
19            (3)  a procedure for educating patients about the use of emergency departments                               
20 and appropriate alternative services and facilities for nonurgent care;                                                 
21            (4)  to the extent consistent with federal law, a process to disseminate lists of                            
22 frequent users to hospital personnel to ensure that frequent users can be identified through the                        
23 electronic information exchange system described under (1) of this subsection;                                          
24            (5)  a process for assisting frequent users with plans of care and for assisting                             
25 patients in making appointments with primary care providers within 96 hours after an                                    
26 emergency department visit;                                                                                             
27            (6)  strict guidelines for the prescribing of narcotics;                                                     
28            (7)  a prescription monitoring program;                                                                      
29            (8)  designation of medical personnel to review feedback reports regarding                                   
30 emergency department use.                                                                                               
31       (b)  The department shall adopt regulations necessary to implement this section and                               
01 request technical assistance from and apply to the United States Department of Health and                               
02 Human Services for waivers or amendments to the state plan as necessary to implement the                                
03 projects under this section.                                                                                            
04       (c)  The project established under this section terminates October 1, 2022.                                       
05       (d)  In this section, "department" means the Department of Health and Social Services.                            
06    * Sec. 7. The uncodified law of the State of Alaska is amended by adding a new section to                          
07 read:                                                                                                                   
08       MEDICAID CHOICE WAIVER. The Department of Health and Social Services shall                                        
09 apply to the United States Department of Health and Human Services for a waiver under 42                                
10 U.S.C. 1396n(b) if necessary to implement AS 47.05.250(11), enacted by sec. 2 of this Act.                              
11    * Sec. 8. The uncodified law of the State of Alaska is amended by adding a new section to                          
12 read:                                                                                                                   
13       DEPARTMENT OF HEALTH AND SOCIAL SERVICES FEASIBILITY STUDY.                                                       
14 (a) The department shall conduct a study analyzing the feasibility of privatizing services                              
15 delivered at Alaska Pioneers' Homes, the Alaska Psychiatric Institute, and select facilities of                         
16 the division of juvenile justice. The department shall deliver a report summarizing the                                 
17 department's conclusions to the senate secretary and the chief clerk of the house of                                    
18 representatives and notify the legislature that the report is available within 10 days after the                        
19 convening of the Second Regular Session of the Twenty-Ninth Alaska State Legislature.                                   
20       (b)  In this section, "department" means the Department of Health and Social Services.                            
21    * Sec. 9. The uncodified law of the State of Alaska is amended by adding a new section to                          
22 read:                                                                                                                   
23       MEDICAID STATE PLAN; INSTRUCTIONS. Not later than January 1, 2016, the                                            
24 Department of Health and Social Services shall amend and submit for federal approval a state                            
25 plan for medical assistance coverage consistent with this Act. The Department of Health and                             
26 Social Services shall apply to the United States Department of Health and Human Services for                            
27 the choice of provider requirement and any waivers necessary to implement the projects and                              
28 programs described in this Act.                                                                                         
29    * Sec. 10. Section 11 of this Act is repealed October 1, 2022.                                                     
30    * Sec. 11. The uncodified law of the State of Alaska is amended by adding a new section to                         
31 read:                                                                                                                   
01       MEDICAID REFORM: CONTINGENT EFFECT. AS 43.23.074, enacted by sec. 1 of                                            
02 this Act, AS 47.05.250, enacted by sec. 2 of this Act, and AS 47.07.038, enacted by sec. 3 of                           
03 this Act, take effect only if the commissioner of health and social services certifies to the                           
04 revisor of statutes, on or before October 1, 2017, that all of the provisions added by                                  
05 AS 47.05.250, enacted by sec. 2 of this Act, all of the provisions added by AS 47.07.038,                               
06 enacted by sec. 3 of this Act, and all of the provisions added by secs. 5 - 7 and 9 of this Act                         
07 have been approved by the United States Department of Health and Human Services.