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CSSB 74(STA): "An Act relating to competitive bidding for medical assistance products and services; relating to verification of eligibility for public assistance programs administered by the Department of Health and Social Services; relating to eligibility for medical assistance; 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(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).