SCS CSHB 426(HES): "An Act relating to cooperation of insurers with the Department of Health and Social Services; relating to subrogation, assignment, and lien rights and notices for medical assistance claims; relating to recovery of medical assistance overpayments; relating to asset transfers and income diversion by medical assistance applicants; relating to assets and Medicare enrollment as they affect medical assistance coverage; relating to home and community-based services; relating to medical assistance applications for persons under 21 years of age; requiring a report by the Department of Health and Social Services; and providing for an effective date."
00 SENATE CS FOR CS FOR HOUSE BILL NO. 426(HES) 01 "An Act relating to cooperation of insurers with the Department of Health and Social 02 Services; relating to subrogation, assignment, and lien rights and notices for medical 03 assistance claims; relating to recovery of medical assistance overpayments; relating to 04 asset transfers and income diversion by medical assistance applicants; relating to assets 05 and Medicare enrollment as they affect medical assistance coverage; relating to home 06 and community-based services; relating to medical assistance applications for persons 07 under 21 years of age; requiring a report by the Department of Health and Social 08 Services; and providing for an effective date." 09 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 10 * Section 1. AS 21.09 is amended by adding a new section to read: 11 Sec. 21.09.240. Cooperation with the Department of Health and Social 12 Services. An insurer, including a pharmacy benefits manager, with respect to medical
01 assistance programs under AS 47.07, shall cooperate with the Department of Health 02 and Social Services to 03 (1) provide, with respect to an individual who is eligible for or is 04 provided medical assistance under AS 47.07, on the request of the department, 05 information to determine during what period the individual or the individual's spouse 06 or dependents may be or may have been covered by the insurer and the nature of the 07 coverage that is or was provided by the insurer, including the name and address of the 08 insurer and the identifying number of the health care insurance plan; 09 (2) accept the department's right of recovery and the assignment to the 10 department of any right of an individual or other entity to payment from the party for 11 an item or service for which payment has been made under AS 47.07; 12 (3) respond to any inquiry by the department regarding a claim for 13 payment for any health care item or service that is submitted not later than three years 14 after the date of the provision of the health care item or service; and 15 (4) agree not to deny a claim submitted by the department solely on the 16 basis of the date of submission of the claim, the type or format of the claim form, or a 17 failure to present proper documentation at the point-of-sale that is the basis of the 18 claim if 19 (A) the claim is submitted by the department within the three- 20 year period beginning on the date on which the item or service was furnished; 21 and 22 (B) any action by the department to enforce its rights with 23 respect to the claim is commenced within six years after the department's 24 submission of the claim. 25 * Sec. 2. AS 47.05.070(b) is amended to read: 26 (b) If the department provides or pays for medical assistance for injury or 27 illness under this title, the department is subrogated to the rights of the recipient of that 28 medical assistance for any claim arising from the injury or illness and to the proceeds 29 of an insurance policy covering the injury or illness to the extent of the value of the 30 medical assistance provided. [A RECIPIENT OF MEDICAL ASSISTANCE OR THE 31 RECIPIENT'S ATTORNEY MUST NOTIFY THE DEPARTMENT IN WRITING
01 OF ANY ACTION OR CLAIM AGAINST A THIRD-PARTY PAYOR IF 02 MEDICAL ASSISTANCE WAS PROVIDED BY THE DEPARTMENT TO TREAT 03 AN INJURY OR ILLNESS FOR WHICH THE THIRD PARTY MAY BE LIABLE.] 04 Notwithstanding the assertion of any action or claim by the recipient of medical 05 assistance, the department may bring an action in the superior court against an alleged 06 third-party payor to recover an amount subrogated to the department for medical 07 assistance provided on behalf of a recipient. 08 * Sec. 3. AS 47.05 is amended by adding new sections to read: 09 Sec. 47.05.071. Duty of a medical assistance recipient. (a) A medical 10 assistance recipient shall cooperate with and assist the department in identifying and 11 providing information concerning third parties who may be liable to pay for care and 12 services received by the recipient under the medical assistance program. 13 (b) A medical assistance recipient may not compromise or resolve an action or 14 claim seeking payment for or related to an injury or illness for which care or services 15 were provided or received under the medical assistance program against an insurer, 16 entity, or other person without first providing notice to the attorney general's office of 17 the facts and circumstances giving rise to the action or claim and the asserted basis for 18 supporting the action or claim. 19 (c) A medical assistance recipient may not receive payment from any source 20 on account of or related to care or services for which medical assistance was received 21 unless the recipient has received written consent of the attorney general's office and 22 has paid the department reimbursement of the amount of medical assistance provided 23 or paid. 24 (d) As a condition of medical assistance eligibility, a person who applies for 25 medical assistance shall, at the time of application, 26 (1) assign to the department the applicant's rights of payment for care 27 and services from any third party; 28 (2) cooperate with and assist the department in identifying and 29 providing information concerning third parties who may be liable to pay for care and 30 services received by the recipient under the medical assistance program; 31 (3) assign to the department the applicant's right to the applicant's
01 permanent fund dividend and agree to sign a new assignment each year; the 02 department shall use the assignment obtained under this paragraph to obtain 03 reimbursement or enforce repayment when a recipient does not pay to the state 04 reimbursement received from a third party for care or services provided or paid by the 05 medical assistance program or fails to satisfy a lien perfected under AS 47.05.075; and 06 (4) agree to make application for all other available third-party 07 resources that may be used to provide or pay for the cost of care or services received 08 by the medical assistance recipient or that may be used to finance reimbursement to 09 the state for the cost of care or services received by the medical assistance recipient. 10 Sec. 47.05.072. Duty of attorney for medical assistance recipient. (a) An 11 attorney representing a medical assistance recipient shall notify the attorney general's 12 office. 13 (b) The notice to the attorney general's office required under (a) of this section 14 includes submission of the following: 15 (1) identification of the medical assistance recipient's name, last 16 known address, and telephone number, and the date of the injury or illness giving rise 17 to the action or claim; 18 (2) copies of the pleadings and other papers related to the action or 19 claim; 20 (3) the identification of each potentially liable third party, including 21 that party's name, last known address, and telephone number; 22 (4) the identification of any insurance policy potentially responsive to 23 the action or claim; and 24 (5) a description of the facts and circumstances supporting the action 25 or claim. 26 (c) An attorney who represents a medical assistance recipient shall give the 27 attorney general's office 30 days' notice before any judgment, award, or settlement 28 may be satisfied in an action or claim by the medical assistance recipient to recover 29 damages for an injury or illness that has resulted in the department's providing or 30 paying for medical assistance. 31 (d) Except for payments under AS 23.30, an attorney representing a medical
01 assistance recipient who has received care or services for the injury or illness provided 02 or paid for by the medical assistance program shall maintain any lump sum settlement 03 or judgment paid in connection with the action or claim in a trust account or deposit 04 the proceeds into the registry of the court until any lien perfected by the department 05 under AS 47.05.075 is satisfied or, if a lien has not been filed under AS 47.05.075, 60 06 days from the attorney's receipt of the proceeds. 07 (e) An attorney who fails to comply with this section is not entitled to the pro 08 rata reduction under AS 47.05.070(c). If the attorney has already received payment for 09 the attorney's services through the pro rata reduction as provided in AS 47.05.070(c), 10 the attorney is civilly liable to the department for the amount of that payment. 11 (f) If a medical assistance recipient is handling the action or claim on a pro se 12 basis, the provisions of this section apply as if the medical assistance recipient were an 13 attorney representing the medical assistance recipient. 14 Sec. 47.05.073. Judgment, award, or settlement of a medical assistance 15 lien. (a) An action or claim brought by a medical assistance recipient or an attorney 16 who represents the medical assistance recipient against a third party or insurer may not 17 be compromised or discharged without the express written consent of the attorney 18 general. 19 (b) A judgment, award, or settlement that requires or results in the 20 compromise of a lien under AS 47.05.075 may not be entered into or granted by a 21 court without the express written consent of the attorney general. 22 (c) A medical assistance recipient may not maintain any rights to payment as a 23 result of a judgment, award, or settlement of an action or claim for which another 24 person may be legally obligated to pay without first making full repayment to the 25 department for costs of past medical assistance services provided to or paid for by the 26 medical assistance recipient that relate to that action or claim. 27 (d) A medical assistance recipient may not place any payment as a result of a 28 judgment, award, or settlement of an action or claim for which another person was 29 legally obligated to pay because of injury or illness into any trust for the purpose of 30 maintaining public assistance or medical assistance eligibility without first 31 (1) making full repayment to the department for costs of past medical
01 assistance services provided to the medical assistance recipient related to that action or 02 claim; and 03 (2) obtaining the express written consent of the attorney general. 04 (e) The department's recovery under a subrogation right, assignment, or 05 enforcement of a lien shall be applied to the entire payment made in satisfaction of 06 judgment, award, or settlement. 07 (f) The doctrine of equitable subrogation, the equitable made whole doctrine, 08 or the common fund doctrine may not be applied to defeat, reduce, limit, or prorate 09 any recovery by the department based upon its subrogation rights, assignment, or lien, 10 or the medical assistance recipient's obligation of repayment. 11 (g) The attorney general may only discharge or give written consent related to 12 a medical assistance lien under AS 47.05.075 if the discharge or consent complies 13 with federal law. 14 (h) Notwithstanding (a) - (g) of this section, a third-party payor shall have no 15 further liability if it settles or compromises a dispute in good faith and without 16 knowledge that the individual is a recipient of medical assistance. 17 Sec. 47.05.074. Conflict with federal requirements. If any provision of this 18 chapter related to subrogation, assignment, or lien conflicts with federal law 19 concerning the Medicaid program or receipt of federal money to finance the medical 20 assistance program, the provision does not apply to the extent of the conflict. 21 * Sec. 4. AS 47.05.075(d) is amended to read: 22 (d) A perfected lien under this section has priority over all other liens except 23 tax liens and a lien perfected for attorney fees and costs [IMMEDIATELY AFTER 24 A LIEN PERFECTED BY A HOSPITAL, NURSE, OR PHYSICIAN UNDER 25 AS 34.35.450 - 34.35.480]. 26 * Sec. 5. AS 47.05.080(a) is amended to read: 27 (a) Benefit overpayments collected by the department in administering 28 programs under AS 47.07 (medical assistance), AS 47.25.120 - 47.25.300 (general 29 relief), AS 47.25.430 - 47.25.615 (adult public assistance), AS 47.25.975 - 47.25.990 30 (food stamps), and 47.27 (Alaska temporary assistance program) shall be remitted to 31 the Department of Revenue under AS 37.10.050(a), except for overpayments
01 recovered under AS 47.07 that cover the value of services paid from federal 02 sources. 03 * Sec. 6. AS 47.07.020(f) is amended to read: 04 (f) A person may not be denied eligibility for medical assistance under this 05 chapter on the basis of a diversion of income or transfer of assets, whether by 06 assignment or after receipt of the income, into a Medicaid-qualifying trust or annuity 07 that, according to a determination made by the department, 08 (1) has provisions that require that the state will receive all of the trust 09 or annuity assets remaining at the death of the individual, subject to a maximum 10 amount that equals the total medical assistance paid on behalf of the individual; and 11 (2) otherwise meets the requirements of 42 U.S.C. 1396p(d)(4) for a 12 trust and 42 U.S.C. 1396p(c)(1)(F) and 42 U.S.C.1396p(e)(1) for an annuity. 13 * Sec. 7. AS 47.07.020 is amended by adding new subsections to read: 14 (j) A person may not apply for medical assistance coverage on behalf of a 15 child under 18 years of age who is not emancipated unless the person is the parent or 16 legal guardian of the child or, if the parent or legal guardian can be contacted and 17 consents to the application and the person is 18 (1) an adult caretaker relative who lives with the child and who is 19 exercising care and control of the child; or 20 (2) an employee of the department who is applying on behalf of a child 21 who is in the custody of the department. 22 (k) A child who is unemancipated may apply for medical assistance coverage 23 on the child's own behalf if the parent or legal guardian of the child consents to the 24 application. The department may waive consent under this section if the child 25 expresses a reasonable fear of the child's parent or legal guardian or the department 26 has been unable to contact the parent or legal guardian after the department has made 27 reasonable efforts to do so. If a waiver of consent is granted, the department shall 28 document the reason for the waiver in the child's medical assistance record. 29 (l) Notwithstanding the eligibility provisions under (a) and (b) of this section, 30 a person may not receive medical assistance under this section unless the person first 31 enrolls in the Medicare program under 42 U.S.C. 1395 to the extent that the person is
01 eligible to receive benefits and services under the program. 02 (m) Except as provided in (g) of this section, the department shall impose a 03 penalty period of ineligibility for the transfer of an asset for less than fair market value 04 by an applicant or an applicant's spouse consistent with 42 U.S.C. 1396p(c)(1). 05 (n) Except as provided under 42 U.S.C. 1396p(f) and 42 U.S.C. 1396u-1, the 06 department shall include as an asset for eligibility purposes the value of an applicant's 07 home if the equity value in the home exceeds $500,000 at the time the application is 08 completed. Nothing in this subsection prohibits an applicant from reducing the equity 09 value in the applicant's home by selling the home or by taking out a loan that affects 10 the equity. 11 * Sec. 8. AS 47.07 is amended by adding a new section to read: 12 Sec. 47.07.045. Home and community-based services. (a) The department 13 may provide home and community-based services under a waiver in accordance with 14 42 U.S.C. 1396 - 1396p (Title XIX, Social Security Act), this chapter, and regulations 15 adopted under this chapter, if the department has received approval from the federal 16 government and the department has appropriations allocated for the purpose. To 17 supplement the standards in (b) of this section, the department shall establish in 18 regulation additional standards for eligibility and payment for the services. 19 (b) Before the department may terminate payment for services provided under 20 (a) of this section, 21 (1) the recipient must have had an annual assessment to determine 22 whether the recipient continues to meet the standards under (a) of this section; 23 (2) the annual assessment must have been reviewed by an independent 24 qualified health care professional under contract with the department; for purposes of 25 this paragraph, "independent qualified health care professional" means, 26 (A) for a waiver based on mental retardation or developmental 27 disability, a person who is qualified under 42 CFR 483.430 as a mental 28 retardation professional; 29 (B) for other allowable waivers, a registered nurse licensed 30 under AS 08.68 who is qualified to assess children with complex medical 31 conditions, older Alaskans, and adults with physical disabilities for medical
01 assistance waivers; and 02 (3) the annual assessment must find that the recipient's condition has 03 materially improved since the previous assessment; for purposes of this paragraph, 04 "materially improved" means that a recipient who has previously qualified for a 05 waiver for 06 (A) a child with complex medical conditions, no longer needs 07 technical assistance for a life-threatening condition, and is expected to be 08 placed in a skilled nursing facility for less than 30 days each year; 09 (B) mental retardation or developmental disability, no longer 10 needs the level of care provided by an intermediate care facility for the 11 mentally retarded either because the qualifying diagnosis has changed or the 12 recipient is able to demonstrate the ability to function in a home setting without 13 the need for waiver services; or 14 (C) an older Alaskan or adult with a physical disability, no 15 longer has a functional limitation or cognitive impairment that would result in 16 the need for nursing home placement, and is able to demonstrate the ability to 17 function in a home setting without the need for waiver services. 18 * Sec. 9. AS 47.05.070(e) is repealed. 19 * Sec. 10. The uncodified law of the State of Alaska is amended by adding a new section to 20 read: 21 APPLICABILITY. Sections 2 - 4 of this Act apply to a cause of action related to a 22 subrogation, assignment, or lien by the Department of Health and Social Services that accrues 23 on or after the effective date of this Act. 24 * Sec. 11. The uncodified law of the State of Alaska is amended by adding a new section to 25 read: 26 REPORT. The Department of Health and Social Services shall prepare a report and 27 deliver the report to the legislature not later than the first day of the First Regular Session of 28 the Twenty-Fifth Alaska State Legislature. The report must include recommendations for 29 statutory, regulatory, and systematic changes that will 30 (1) assist the department in reducing medical assistance expenditures for 31 services received in mental health treatment facilities located in the state and outside the state,
01 including community mental health facilities, residential psychiatric treatment centers, and 02 substance abuse treatment facilities; 03 (2) enhance and clarify parental financial responsibility for children receiving 04 services provided by mental health treatment facilities located in the state and outside the 05 state, including community mental health facilities, residential psychiatric treatment centers, 06 and substance abuse treatment facilities; and 07 (3) maximize all third-party resources available to pay for the cost of services 08 provided by mental health treatment facilities located in the state and outside the state, 09 including community mental health facilities, residential psychiatric treatment centers, and 10 substance abuse treatment facilities, before a provider seeks reimbursement under AS 47.07. 11 * Sec. 12. The uncodified law of the State of Alaska is amended by adding a new section to 12 read: 13 TRANSITION: REGULATIONS FOR HOME AND COMMUNITY-BASED 14 SERVICES. To the extent that regulations on home and community-based services that are in 15 effect on the effective date of sec. 8 of this Act are not inconsistent with the language and 16 purposes of sec. 8 of this Act, those regulations remain in effect as valid regulations 17 implementing sec. 8 of this Act. 18 * Sec. 13. The uncodified law of the State of Alaska is amended by adding a new section to 19 read: 20 STATE PLAN. (a) The Department of Health and Social Services shall immediately 21 apply for federal approval of a revised state plan to implement the changes to the medical 22 assistance program made under secs. 1 - 7 and 9 of this Act. 23 (b) The commissioner of health and social services shall notify the revisor of statutes 24 of the date of the federal approval of the revised state plan submitted under (a) of this section. 25 * Sec. 14. Sections 8 and 12 of this Act take effect immediately under AS 01.10.070(c). 26 * Sec. 15. Section 1 of this Act takes effect July 1, 2007. 27 * Sec. 16. Except as provided in secs. 14 and 15 of this Act, this Act takes effect July 1, 28 2006, or on the date of notification under sec. 13 of this Act of federal approval of a revised 29 state plan for medical assistance coverage incorporating the changes made by secs. 1 - 7 and 9 30 of this Act, whichever is later.