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CSSB 74(HSS): "An Act relating to a medical assistance reform program; relating to the duties of the Department of Health and Social Services; establishing medical assistance demonstration projects; relating to civil penalties for medical assistance fraud; relating to studies by the Department of Health and Social Services; relating to cost-containment measures for medical assistance; and providing for an effective date."

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).