Legislature(2015 - 2016)CAPITOL 106
03/03/2016 03:15 PM House HEALTH & SOCIAL SERVICES
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| Audio | Topic |
|---|---|
| Start | |
| HB227 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 227 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 227-MEDICAL ASSISTANCE REFORM
3:19:40 PM
CHAIR SEATON announced that the first order of business would be
HOUSE BILL NO. 227, "An Act relating to medical assistance
reform measures; relating to administrative appeals of civil
penalties for medical assistance providers; relating to the
duties of the Department of Health and Social Services; relating
to audits and civil penalties for medical assistance providers;
relating to medical assistance cost containment measures by the
Department of Health and Social Services; relating to medical
assistance coverage of clinic and rehabilitative services; and
providing for an effective date."
3:21:26 PM
CHAIR SEATON opened public testimony. After ascertaining no one
wished to testify, closed public testimony.
3:22:26 PM
REPRESENTATIVE VAZQUEZ moved to adopt proposed Amendment 1,
labeled 29-LS1096\H.7, Glover, 2/19/16, which read:
Page 5, line 5:
Delete "may not be less than 50"
Page 5, lines 5 - 10:
Delete "[, AS A TOTAL FOR THE MEDICAL ASSISTANCE
PROGRAMS UNDER AS 47.07 AND AS 47.08, SHALL BE 0.75
PERCENT OF ALL ENROLLED PROVIDERS UNDER THE PROGRAMS,
ADJUSTED ANNUALLY ON JULY 1, AS DETERMINED BY THE
DEPARTMENT, EXCEPT THAT THE NUMBER OF AUDITS UNDER
THIS SECTION MAY NOT BE LESS THAN 75]"
Insert ", as a total for the medical assistance
programs under AS 47.07 and AS 47.08, shall be 0.75
percent of all enrolled providers under the programs,
adjusted annually on July 1, as determined by the
department, except that the number of audits under
this section may not be less than 75"
CHAIR SEATON objected for discussion.
REPRESENTATIVE VAZQUEZ explained that proposed Amendment 1
deleted the proposal to reduce the actual number of audits
conducted. She relayed that although there were usually at
least 75 audits required, but HB 227 had proposed to reduce this
to 50 audits. She pointed out that, as there were between 3,000
- 4,500 Medicaid providers, maintaining 75 audits "does not
appear to be a harsh imposition on the community, especially
with a provision that states that we want to avoid concurrent
audits," whether it was a federal or other ongoing audit. She
offered her belief that historically the Department of Health
and Social Services had considered whether the provider was also
being audited by other agencies. The proposed Amendment 1 would
return the number of audits to match existing law.
CHAIR SEATON directed attention to the e-mail response to the
committee members' questions from the administration, dated
February 16, 2016. [Included in members' packets.]
3:24:15 PM
JON SHERWOOD, Deputy Commissioner, Medicaid and Health Care
Policy, Office of the Commissioner, Department of Health and
Social Services, relayed that the Department of Health and
Social Services had proposed reducing the annual number to 50
audits as, since that statute had been passed more than 10 years
prior, there were now a number of other audits implemented by
the federal government. The department had proposed the
reduction to relieve some of the burden from the providers;
however, he stated, the amendment would not pose any problem as
the department would then continue to do 75 audits annually.
CHAIR SEATON referenced the aforementioned e-mail response which
stated that there were currently 5,823 active Medicaid billing
providers, and the proposed audit for 0.75 percent of these
providers would have resulted in 44 audits. He acknowledged
that the 50 audits in the proposed bill would have been closer
to this figure than the 75 audits in proposed Amendment 1.
REPRESENTATIVE TARR relayed that she was more comfortable with
the existing language in the proposed bill for 50 audits. She
opined that, as DHSS was currently beginning its work on some
massive changes, and it was necessary to be diligent on these
audits, there were also other significant efforts to address
fraud and abuse.
CHAIR SEATON commented that a number of providers had stated to
the committee that more regulations equaled more cost by the
providers. He pointed out that although the audits might not be
a problem for the department, this was a problem for the
providers. He noted that the audits built more cost into the
system, something the committee was trying to eliminate. He
suggested that, unless the audits were "catching a lot of fraud
and abuse," this was only "building cost into the system that's
not being productive." He stated that he had not received any
information that 75 audits were more sufficient for the cost
versus benefit.
REPRESENTATIVE VAZQUEZ expressed her disagreement. She
explained that, in the selection of the providers to be audited,
the high risk profile was reviewed. She asked DHSS about the
process for the audit selection.
MR. SHERWOOD explained that at the end of annual billing period,
the claims data was taken and analyzed, and samples from
different groups of sorted provider types were selected. He
declared that this was not meant to be a purely representative
sample, although it was intended to get a broad cross section of
providers. A list of potential audit candidates and alternates
was generated, which was sent to the DHSS audit committee,
comprised of members throughout the department representing
program integrity and quality assurance who worked with
Medicaid. This committee reviewed the list and used their
knowledge to sort through the providers and make recommendations
to the certified auditing agency, Myers and Stauffer. He added
that, generally speaking, DHSS still had the ability to target
the highest risk providers when initiating 50 - 75 audits, while
maintaining a degree of cross section so nothing would go
unobserved.
REPRESENTATIVE TARR referenced some of her constituent providers
who had been audited, at a cost of more than $10,000 each, and
she asked if 50 audits could still target the highest risk
providers while not burdening some of the smaller providers.
MR. SHERWOOD offered his belief that 50 audits would still
target the highest risk providers, pointing out that small
dollar providers were not audited, as the cost of auditing these
providers did not justify the money recovered. He expressed his
agreement that these audits could be expensive and cumbersome.
He reported that preliminary findings were released in order to
allow providers to dispute or correct any of the findings. He
reiterated that 50 audits would allow the department "to get to
the highest risk providers."
REPRESENTATIVE TARR mused that the complexity of changing
regulations and expectations could be where the mistakes were
made, as opposed to intentionally fraudulent behavior.
MR. SHERWOOD expressed that it was true that many of the issues
uncovered during audits were not fraudulent activity, but
instead were mistakes, misinterpretations of policy, or failure
to execute documentation appropriately. Although these were
important aspects to comply with, the department tried to strike
a balance using a lower minimum threshold for audits.
REPRESENTATIVE WOOL asked about any increase in the Department
of Health and Social Services workload with a higher number of
audits, and who paid the cost for the audits.
MR. SHERWOOD replied that the state directly paid for the cost
of the audits to the contractor, Myers and Stauffer. He
reported that the recoveries from the audit process
approximately offset the cost of audits, noting that the
reduction in audits would be offset by a reduction in
recoveries.
REPRESENTATIVE VAZQUEZ asked about the amount of money recovered
in the last year as a result of the audits.
MR. SHERWOOD replied that he did not have the amount.
3:38:58 PM
MARGARET BRODIE, Director, Director's Office, Division of Health
Care Services, Department of Health and Social Services,
reported that she did not have the exact amount of penalties
recovered.
MR. SHERWOOD offered to get that information to the committee.
3:39:41 PM
CHAIR SEATON set proposed Amendment 1 aside, awaiting more
information for the amount of money recovered.
3:40:04 PM
REPRESENTATIVE VAZQUEZ moved to adopt proposed Amendment 2,
labeled 29-LS1096\H.8, Glover, 2/20/16, which read:
Page 8, lines 2 - 7:
Delete all material.
Page 8, line 8:
Delete "(4)"
Insert "(2)"
Page 8, line 13:
Delete "(5)"
Insert "(3)"
Page 11, line 12:
Delete "applications for waivers and"
Insert "application for a waiver"
Page 11, line 13:
Delete "options under AS 47.07.036(d)(1) - (3)"
Insert "under AS 47.07.036(d)(1)"
Page 11, line 16:
Delete "applications"
Insert "application"
Page 11, lines 17 - 18:
Delete ", a section 1915(i) option under 42
U.S.C. 1396n, and a section 1915(k) option under 42
U.S.C. 1396n were"
Insert "was"
Page 11, line 20:
Delete "programs"
Insert "program"
Page 11, line 21:
Delete "waivers"
Insert "waiver"
Page 11, lines 21 - 22:
Delete "(A)"
Page 11, line 24:
Delete ";"
Insert "."
Page 11, lines 25 - 27:
Delete all material.
CHAIR SEATON objected for discussion.
REPRESENTATIVE VAZQUEZ referenced her lengthy reasons which she
had submitted in the last meeting, as it was unclear "what we're
getting into until we see the amendments actually to the state
plan and the reports to the legislature will be after the fact
in 2019." She offered her belief that initial research had
indicated that these options may become an entitlement program,
which would not allow any caps or limits. She suggested that
there may not be many alternatives in a difficult fiscal
situation if these options were developed.
MR. SHERWOOD expressed his agreement that, although the options
for the regular Medicaid state plan would become an entitlement,
the key to controlling the cost would be to establish
appropriate eligibility criteria, in-service definitions, and
limits which would go into the state plan for implementation,
which would reduce the general fund expenditure on current
services. He reported that a consultant had been hired through
the Alaska Mental Health Trust Authority to help with the
process and offer insights into appropriate options.
3:42:48 PM
DUANE MAYES, Director, Central Office, Division of Senior and
Disabilities Services, Department of Health and Social Services,
directed attention to the document titled "Home and Community
Based Services Waiver and Options." [Included in members'
packets.] He reported that these were the current options for
the 1915(c) home and community based services program. He added
that there were two other sections, one for the Medicaid option
1915(i) and one for 1915(k). He directed attention to the five
documents which showed assumptions to cost savings within the
general fund program and the home and community based services
program.
CHAIR SEATON noted that the 1915(c) option was presented in a
two page table, and the 1915(i) and (k) options were presented
in the color slide package. [Included in members' packets.]
REPRESENTATIVE VAZQUEZ asked that future documents be dated,
noting that she had not had time to review these documents.
MR. MAYES reported that a contract with Health Management
Associates (HMA) had been signed for October, 2015 through July,
2016. This contract was in place to explore the aforementioned
two options. He shared that the 1915(k) option was required by
Centers for Medicare & Medicaid Services (CMS) to have an
implementation council, which consisted of recipients, and/or
their family members, of services within the Medicaid waiver
program. He noted that the council had been in place since
November, 2015. He stated that there were 12 deliverables
within the HMA contract, and that deliverable number 3, a review
of regulations, had been telling, as the lessons learned from
the efforts of other states included the need to be very
methodical in the roll out of the two options, with one service
at a time, and to not overhaul the Medicaid home and community
based services program all at once. He shared an example for
the services by one state that were overwhelmed when trying to
overhaul the system all at once. He declared that it was
necessary to make sure the eligibility process was well defined
and based on need, as otherwise the costs could be driven
upward. He shared that it was important that the regulations
and the utilization and quality controls for 1915(i) and (k)
were well written. He offered his belief that the division had
reduced its expenses through the home and community based
services waiver program primarily because of good regulations
and utilization controls. He said that it was necessary to have
the ability to recalibrate the assessment tools for appropriate
service levels in order to control costs. He shared that CMS
allowed having soft caps in place.
CHAIR SEATON asked for a definition to soft cap.
MR. MAYES offered an example, the self-care activities of daily
living which seniors often needed, that a soft cap be based on
the average hours per week, and if more hours were necessary,
there was a process to petition the state for additional hours.
This allowed the state to manage the program, and he expressed
his confidence that the program would be well managed and would
not "explode in terms of cost." He directed attention to the
first graph, titled "Community Developmental Disabilities Grants
1915(i) Impact" [Included in members' packets], noting that in
FY15 there was general fund spending of $11,635,800, with no
federal matching funds, which served 996 individuals. He
suggested that this eligibility could be refinanced as a
Medicaid component under the 1915(i), which allowed for a 50
percent federal match. He moved to the next graph, titled
"Senior Community Based Grants - Adult Day 1915(i) Impact"
[included in members' packets], and reported that there were 13
adult day centers in Alaska, serving 423 individuals at a cost
of $1,757,000 in FY15. He opined that 114 of these individuals
would meet the eligibility requirements for the 1915(i) option,
allowing for a 50 percent federal match, and a general fund
savings of $236,800.
3:53:00 PM
MR. MAYES moved on to the next graph, titled "Senior Community
Based Grants - Senior In-Home 1915(i) Impact" [included in
members' packets], which spent $2,917,300 in general funds for
1,371 seniors to be served in their homes with case management
services to allow the seniors to remain in their homes. He
offered his belief that 123 of these individuals would meet the
eligibility requirements for the 1915(i) option, and thereby
save the general fund about $130,800 with a 50 percent federal
match.
MR. MAYES directed attention to the next graph, titled "General
Relief/Temporary Assisted Living 1915(i) Impact" [included in
members' packets], which he described as a safety net for the
vulnerable population. He reported that the referrals tended to
come from the Alaska Psychiatric Institute or hospital discharge
planning units, pointing out that the program had spent $7.3
million in FY15 for 545 individuals. He opined that 349 of
these individuals would meet the eligibility requirements for
the 1915(i) option, saving the general fund about $2.3 million
[from the 50 percent federal match].
MR. MAYES announced that the last graph, titled "Senior and
Disabilities Medicaid Services 1915(k) Impact" [included in
members' packets], which he described as requiring a need for
institutional level of care. He reported that the current
personal care attendant program had 1,603 people meeting this
criteria. He cited that use of the 1915(k) option would
increase the federal match by an additional 6 percent, from a 50
percent to 56 percent federal match. He noted that the actual
general fund savings would be about $2.5 million. He declared
the necessity to be very methodical, with a good eligibility
process and good utilization controls in place, and with a well-
defined eligibility process.
3:56:27 PM
CHAIR SEATON noted that a previous concern had been for the wait
list, but that, as all of those on the wait list were currently
getting services funded by the state, this would not be
expanding the population.
REPRESENTATIVE VAZQUEZ referenced the last graph, titled "Senior
and Disabilities Medicaid Services 1915(k) Impact," and
questioned that there would not be any added cost to the state
although it would expand services to the recipients. She asked
which services would be added that the state would have to pay
the balance.
MR. SHERWOOD replied that this option was intended to provide
services similar in nature to the current personal care services
program, which was available to any Medicaid recipient with that
need. He allowed that although it might be possible for the
state to design a broader service package, the intention was to
focus on the assistance and maintenance activities and health
related tasks instrumental to daily living similar to services
already provided.
REPRESENTATIVE VAZQUEZ asked for clarification that the
department would not be offering any additional services.
MR. SHERWOOD stated that the department would be offering a
service similar to the current personal care services.
CHAIR SEATON stated that the 1915(i) and (k) options had been
shown through Medicaid reform to be a cost saver to the State of
Alaska.
CHAIR SEATON maintained his objection to proposed Amendment 2.
4:00:30 PM
REPRESENTATIVE VAZQUEZ asked about the graph titled "Community
Developmental Disabilities Grants 1915(i) Impact," noting that
this program did have a [waiting] list for the waiver.
MR. SHERWOOD expressed his agreement that one of the four
waivers did have a waiting list for individuals with
intellectual and development disabilities.
REPRESENTATIVE VAZQUEZ asked what prevented the individuals
currently on the waiting list for qualification to Medicaid if
they qualified for 1915(i).
MR. SHERWOOD said that most individuals on the waiting list
could qualify for Medicaid if they had a need for Medicaid
services. He allowed that individuals on the waiting list were
often already receiving the services through the community
developmental disabilities grant program. He reiterated that an
issue was to establish the qualifying standards for functional
impairment, and it was necessary to be judicious in setting the
standard. He declared that it was necessary to be careful with
the eligibility criteria and the service limitations.
REPRESENTATIVE VAZQUEZ asked what prevented the Department of
Health and Social Services from simply expanding the existing
waiver program which was already being reimbursed by 50 percent,
in order to reduce the waiting list to zero.
MR. SHERWOOD mused that it was a possibility, as there was no
statutory requirement to stop expansion for the number of
individuals authorized to serve under the waiver. He shared
that the current structure of the waiver offered a very wide,
very generous package of benefits, targeted to people needing an
institutional level of care. He stated that there were people
on the wait list who did not have this need, but the 1915(i)
option allowed the department to meet those needs that may not
be quite so broad. He acknowledged that there could be two
waivers, although it would be more cumbersome to administer. He
explained that the 1915(i) option seemed to be the more
expeditious.
4:04:53 PM
REPRESENTATIVE VAZQUEZ asked if there were individuals currently
on the wait list who met the institutional level of care.
MR. SHERWOOD acknowledged that there probably were, although he
did not know if they would be assessed by an official
determination.
MR. MAYES explained that there were two types of individuals
receiving services through the Community and Developmental
Disabilities Grants. There were those who may meet eligibility
for the (c) waiver, the institutional level of care. He said
that this was not determined when people were listed on the
registry, but was instead determined during an assessment at a
later time. He acknowledged that some individuals on the
registry did meet the definition for institutional level of
care. Those individuals who did not meet this were the
individuals being directed to the 1915(i) option.
REPRESENTATIVE VAZQUEZ asked what prevented the department from
conducting assessments to identify those individuals needing
institutional level of care and placing them into the (c)
waiver.
MR. SHERWOOD replied that the expense of the assessments and the
impact on the budget for the additional people could be absorbed
if the legislature wanted to finance this by increasing the
budget.
REPRESENTATIVE VAZQUEZ asked about the cost of an assessment.
MR. SHERWOOD replied that the assessment was done by state
employees, although he was not sure if the calculation of cost
was readily available. He stated that it would be necessary to
take the money out of the grant program paying for services in
order to do more assessments.
CHAIR SEATON asked if those individuals currently on the wait
list were getting services through the community developmental
grants.
MR. SHERWOOD expressed his agreement that those individuals had
access to those services, although many of those individuals had
very low needs, and were most likely on the registry with
anticipation for a future change to those needs. He compared
that the waiver for developmental disabilities which served
about 2,000 people cost about $170 million annually, whereas the
grants which served less than 1,000 people cost about $12
million annually. He declared that the package of received
services under the waiver or through the grants was
substantially different.
4:09:59 PM
REPRESENTATIVE VAZQUEZ addressed the graph titled "Senior
Community Based Grants - Adult Day 1915(i) Impact" and, asking
about the funding for the adult day care centers, questioned how
a 1915(i) waiver could be fashioned to do away state funding.
MR. SHERWOOD acknowledged that the option would require the
state to pay its share of 50 percent. He stated that it was not
anticipated for everyone receiving these adult day services to
qualify for Medicaid. He pointed out that the projection was
for about 25 percent of the participants, and that DHSS would
maintain the general fund match for the 1915(i) waiver, as well
as the grant program payment for those who did not qualify for
that waiver.
CHAIR SEATON pointed out that of the current 423 individuals,
114 would be eligible for the waiver.
CHAIR SEATON maintained his objection to proposed Amendment 2.
4:12:17 PM
A roll call vote was taken. Representatives Vazquez and
Talerico voted in favor of proposed Amendment 2, labeled 29-
LS1096\H.8, Glover, 2/20/16. Representatives Wool, Tarr, and
Seaton voted against it. Therefore, Amendment 2 failed to be
reported out of the House Health and Social Services Standing
Committee by a vote of 2 yeas - 3 nays.
4:13:07 PM
CHAIR SEATON returned attention to proposed Amendment 1, labeled
29-LS1096\H.7, Glover, 2/19/16.
MS. BRODIE, in response to an earlier question by Representative
Vazquez, stated that the department had recovered $775,330 as a
result of the audits.
CHAIR SEATON noted that there had been 75 audits.
REPRESENTATIVE VAZQUEZ asked how many Medicaid providers were
enrolled with Department of Health and Social Services.
CHAIR SEATON relayed that the e-mail dated February 16, 2016
[Included in members' packets] had stated there were 5,823
active [Medicaid] billing providers.
REPRESENTATIVE VAZQUEZ stated that she had wanted confirmation.
MS. BRODIE acknowledged that this was the number of Medicaid
billing providers, subject to these audits.
REPRESENTATIVE TARR asked how many of these audits resulted in
the assessments of overpayments.
REPRESENTATIVE WOOL asked for the amount paid to the auditing
contractor for those 75 audits.
MS. BRODIE relayed that the first year of the contract had paid
$651,309 and the second year had paid $426,380.
CHAIR SEATON reiterated that there was a question for the number
of the 75 audited providers who had paid.
MS. BRODIE replied that she was researching the answer.
CHAIR SEATON set proposed Amendment 1 aside, clarifying that
there had not yet been a vote.
4:17:52 PM
CHAIR SEATON moved to adopt proposed Amendment 3, labeled 29-
LS1096\H.5, Glover, 2/19/16, which read:
Page 6, line 3, following "audit.":
Insert
"The department may not assess interest under
this subsection if a provider
(1) identifies and reports an overpayment
to the department independent of an audit conducted
under this section; and
(2) repays the amount of the overpayment to
the department within five months after the date the
provider received the overpayment."
REPRESENTATIVE TARR objected for discussion.
4:18:34 PM
TANEEKA HANSEN, Staff, Representative Paul Seaton, Alaska State
Legislature, explained that proposed Amendment 3, labeled 29-
LS1096\H.5, Glover, 2/19/16, added to the audit section of
proposed HB 227 and it clarified that the Department of Health
and Social Services not assess interest on overpayment from the
audits if the provider had identified and reported the
overpayment independent of the audit and if the amount of
overpayment was repaid to DHSS within five months of the date
the provider received the overpayment.
REPRESENTATIVE WOOL asked for clarification that self-reporting
by the provider would not result in interest or penalties.
CHAIR SEATON clarified that there was not any interest or
penalty if the provider self-identified the problem and reported
it within five months. He reminded the committee that there had
already been a substantial amount of testimony regarding this.
REPRESENTATIVE WOOL asked if interest and penalties would still
be assessed, even as the proposed Amendment 3 only addressed
interest.
MS. HANSEN relayed that Section 5 of the proposed bill did
mention penalties and interest, although she deferred to the
department for its interpretation.
CHAIR SEATON opined that the purpose was to avoid the conflict
and he suggested a conceptual amendment adding "penalties" would
be acceptable.
MR. SHERWOOD opined that the Department of Health and Social
Services authority for interest was on the overpayments and that
penalties was a separate authority.
4:23:27 PM
CHAIR SEATON posed that if there was an overpayment, which was
subsequently self-reported, there would not be interest. He
asked if there were circumstances when the overpayment would be
penalized, even if it was self-reported.
MR. SHERWOOD replied that Section 6 of proposed HB 227 addressed
civil penalties, and he offered his belief that the intention of
the Department of Health and Social Services was that some
circumstances, including failure to comply with regulations,
allowed for penalties to overpayment although interest would not
be charged.
REPRESENTATIVE WOOL offered his belief that there was a penalty
for policy or practice failures with a separate penalty for an
overpayment.
MR. SHERWOOD stated that overpayment was not considered a
penalty; it was an instance whereby the department had paid
incorrectly either because the service was not eligible for
payment or perhaps the service was not priced correctly. He
pointed out that sometimes an overpayment was because the
provider had failed to do something in compliance with
regulation, which could trigger the civil penalties. He noted
that these were the only penalties that DHSS had the authority
to issue to a provider.
REPRESENTATIVE VAZQUEZ questioned application for the five month
limitation to return of the overpayment.
MR. SHERWOOD suggested that a reasonable amount of time to pay
back should be based on the time of disclosure.
REPRESENTATIVE VAZQUEZ suggested the proposed amendment should
read five months after discovery of the overpayment.
CHAIR SEATON reiterated the earlier discussion for a more timely
review of the billings. He stated that he was in support of any
reasonable timeframe which allowed a review of the records. He
pointed out that receipt of payment, discovery of an
overpayment, and its ultimate report to the department would not
necessarily be the same.
4:32:47 PM
REPRESENTATIVE VAZQUEZ suggested a conceptual amendment for
within five months after the date that the provider reports or
discloses the overpayment to the department.
CHAIR SEATON suggested a conceptual amendment to line 7 of
proposed Amendment 3, which would delete "receive" and insert
"reported."
4:34:06 PM
CHAIR SEATON offered conceptual Amendment 1 to proposed
Amendment 3, which would read: line 7, delete "received";
insert "reported"; and add "to the department" after "the
overpayment."
REPRESENTATIVE WOOL suggested that someone may not report unless
they saw an audit coming. He offered his belief that a business
would be incentivized by a time frame.
CHAIR SEATON pointed out that was the reason for the five months
after receipt of the overpayment, although it could be changed
to make it simpler.
REPRESENTATIVE WOOL suggested that providers should review the
payments frequently enough to catch it, and then be incentivized
to report it.
4:36:19 PM
REPRESENTATIVE VAZQUEZ expressed her agreement with conceptual
Amendment 1 and suggested inserting language which stated that
the provider had not received notice of an audit.
CHAIR SEATON directed attention to line 4 of proposed Amendment
3, and asked if this defined the suggestion by Representative
Vazquez.
4:38:08 PM
MR. SHERWOOD, in response to Chair Seaton, said the department
had never had this language to use, so there had not ever been
that determination. He offered his belief that an audit trigger
would be determined upon notification. He reiterated that the
department had never made that policy call.
CHAIR SEATON stated that "independent of an audit" meant "before
you have been notified that an audit was to be conducted." He
explained that this would apply when a provider was self-
reporting. He directed attention back to conceptual Amendment
1.
4:40:09 PM
REPRESENTATIVE VAZQUEZ moved to adopt conceptual Amendment 1 to
proposed Amendment 3, which read: line 7, delete "received";
insert "reported"; and add "to the department" after "the
overpayment."
CHAIR SEATON objected for discussion.
REPRESENTATIVE TALERICO offered that this was a substantial
improvement and stated his support.
CHAIR SEATON removed his objection.
REPRESENTATIVE WOOL mused that a time limit was necessary, and
asked how often the department investigated older payments.
MR. SHERWOOD said that identified overpayments could go back a
considerable time, and he shared that audits were conducted
after a sample had been pulled from a one year period. He
pointed out that the claims identified as overpayments were at
least two to three years old at final determination, and that
assessed interest would begin considerably after the actual
overpayment.
REPRESENTATIVE WOOL asked if acknowledgement by a provider of an
overpayment triggered a look into the possibility of additional
overpayments to the same provider.
MR. SHERWOOD opined that the vast majority of overpayments were
self-disclosed, and did not usually raise concerns, dependent on
the nature of what had been identified. He shared that
sometimes there was deemed a need for provider education or
technical assistance. He allowed that most overpayments were
considered relatively benign mistakes or incorrect systems. He
said that it could lead to additional investigation, although
this was not common circumstance.
MS. BRODIE relayed that each case was different, and that
certain triggers could make the department look deeper,
especially for any problem with policies or procedures that
required education for many providers. She stated that this
quick analysis was done on each audit for whether a deeper look
for education or for problems was necessary.
CHAIR SEATON reminded that the purpose of the proposed amendment
was for providers to investigate their books and self-report, if
necessary.
REPRESENTATIVE WOOL suggested a year maximum to stimulate an
annual review by each provider.
4:47:29 PM
There being no further objection, conceptual Amendment 1 to
proposed Amendment 3 was adopted.
REPRESENTATIVE TALERICO asked if all audits had a pre-
notification requirement.
MR. SHERWOOD replied that this was the procedure for all of
these types of general provider audits; however, audits based on
valid suspicion for fraud or abuse could be initiated without
prior notice.
4:49:16 PM
REPRESENTATIVE TALERICO moved to adopt conceptual Amendment 2 to
proposed Amendment 3, which, on line 5, added "the notice of"
after "independent of." He suggested that this may inspire
providers to self-audit prior to any notice.
4:50:33 PM
There being no objection, conceptual Amendment 2 to proposed
Amendment 3 was adopted.
4:50:58 PM
CHAIR SEATON brought attention back to proposed Amendment 3 and
asked if there was further discussion.
4:51:16 PM
REPRESENTATIVE TARR removed her objection.
There being no further objection, Amendment 3, labeled 29-
LS1096\H.5, Glover, 2/19/16, as amended, was adopted.
4:51:34 PM
CHAIR SEATON returned attention to proposed Amendment 1, labeled
29-LS1096\H.7, Glover, 2/19/16.
MS. BRODIE, in response to Chair Seaton regarding an earlier
question for the number of the 75 audited providers who had
paid, said that, although there were 55 providers who paid, as
the audits had been conducted over the last few years, only 9 of
the providers were from the current 75 audits conducted.
MR. SHERWOOD, in response to Representative Tarr, explained that
although 75 audits were initiated in a year, not all of these
audits were completed in that year. Of the 55 providers the
department recovered money from during this last year, only 9 of
these were from the current audit cycle, as the other 46 audits
took more than one year to complete.
REPRESENTATIVE TARR surmised that about 20 of each year's audits
would be resolved annually.
CHAIR SEATON reiterated that for the past three years there had
been audits of 225 providers, 75 audits each year, and the
substantial portion of the recovery was from 55 of these audits,
about 25 percent of those providers audited over the past three
years.
MR. SHERWOOD opined that 75 audits were initiated and closed out
in a given year, however, it was not necessarily all the same
audits. He pointed out that an average of 55 of those closed
out audits would owe something each year.
MR. SHERWOOD, in response to Representative Wool, said that nine
was the number for audits initiated and recovered in that same
year.
CHAIR SEATON asked if all 55 audits had substantial recoveries.
MS. BRODIE replied that 55 audits had contributed to all the
recoveries, reporting that there were only 9 providers with
recoveries over $25,000 each.
REPRESENTATIVE TARR suggested that, as only 9 of the audits
evaluated had substantial recoveries, this was about 20 percent
of the suggested 50 audits annually, which she deemed to be an
adequate sampling.
MR. SHERWOOD acknowledged that this was reasonable logic "in
terms of identifying the larger providers that would still give
us an ample sample to discover." He pointed out that although
each additional audit increased the chances of finding
something, it was necessary to strike a balance.
REPRESENTATIVE VAZQUEZ declared that the current statute
required 75 audits, out of 5,823 enrolled providers, which she
deemed not to be an unreasonable burden on the provider
community. She emphasized that the number should not be
lessened, especially in light of the current fiscal
circumstances. She stressed that it was necessary to maintain
the integrity of the program and to be accountable for the money
spent on these programs.
REPRESENTATIVE WOOL reiterated that 75 audits were performed
each year under the current statute. In the past year, while 55
of those audits reported some payout, only 9 of those 55 audits
were from the current calendar year. He surmised that, as 75
audits were completed each year, this was almost cost neutral,
and the addition of more audits would only increase the money
paid for the audits.
MR. SHERWOOD replied that, on average, 75 audits were completed
each year, and the department was not falling behind on its
audits.
CHAIR SEATON asked if the reduction in DHSS personnel would have
any effect on these, noting that the audits were done by private
contract.
MR. SHERWOOD replied that the cost for audits was paid as a
Medicaid administrative expense. He stated that he did not
recall whether that was a 50 or 75 percent federal match. He
shared that there was some degree of required staff support to
hire, oversee, and assist with the contracts and the Medicaid
data.
5:03:52 PM
CHAIR SEATON removed his objection.
REPRESENTATIVE TARR stated her objection.
REPRESENTATIVE WOOL asked how 75 audits would affect DHSS, would
it still be cost neutral, would it incur any extra work, and
would more audits mean more return or hinder the department in
any way.
MR. SHERWOOD replied that, as there were currently 75 audits, a
return to this would not impose any additional burden, while a
reduction to 50 audits would not appreciably impact the work
load. He opined that it would be cost neutral for either number
of audits. He declared that more audits would encourage tighter
or stricter compliance, better record keeping, and better
attention to regulation, although there would be a cost to the
providers. He shared that, as there had now been 12 or 13 audit
cycles, many of the providers had been audited more than once
and had established reactions to audits. He stated that there
was "no magic line" for the number of audits, and this would not
provide any additional burden to the department.
5:07:11 PM
A roll call vote was taken. Representatives Seaton, Vazquez,
Wool, and Talerico voted in favor of proposed Amendment 1.
Representative Tarr voted against it. Therefore, Amendment 1,
labeled 29-LS1096\H.7, Glover, 2/19/16, was adopted by a vote of
4 yeas - 1 nay.
5:08:30 PM
The committee took an at-ease from 5:08 p.m. to 5:18 p.m.
5:18:06 PM
CHAIR SEATON moved to adopt proposed Amendment 4, labeled 29-
LS1096\H.6, Glover, 2/19/16, which read:
Page 9, line 30:
Delete "DEMONSTRATION"
Insert "PILOT"
Page 9, line 31:
Delete "January"
Insert "July"
Page 9, line 31, through page 10, line 1:
Delete "design and implement a demonstration
project"
Insert "contract with a third party to establish
a care coordination pilot project for approximately
500 voluntary participants who are eligible for
medical assistance under AS 47.07.020(b)(14)"
Page 10, lines 2 - 4:
Delete "The demonstration project shall provide
for the voluntary enrollment of approximately 500
recipients who are eligible for medical assistance
under AS 47.07.020(b)(14). The Department of Health
and Social Services shall"
Insert "The care coordination pilot project must
focus on nutritional sufficiency and"
Page 10, line 6:
Delete "demonstration"
Insert "care coordination pilot"
Page 10, line 7:
Delete "demonstration"
Insert "care coordination pilot"
Page 10, line 9:
Delete "demonstration"
Insert "care coordination pilot"
Page 10, line 15, following "(July 2013).":
Insert "Two years after the date the Department
of Health and Social Services first enrolls recipients
in the care coordination pilot project, the Department
of Health and Social Services shall deliver a report
to the senate secretary and the chief clerk of the
house of representatives and notify the legislature
that the report is available. The report shall
describe the results of the care coordination pilot
project, any difference in the pre-term birth rate for
participants in the pilot project as compared to the
pre-term birth rate for the state, and the estimated
savings to the state resulting from the pilot
project."
REPRESENTATIVE TARR objected for discussion.
5:18:28 PM
MS. HANSEN explained that proposed Amendment 4 removed language
in the pre-term birth demonstration project, replacing
"demonstration project" with "coordinated care." She reported
that this had previously read that the department would design
and implement the demonstration project; instead, a contract
with a third party to establish a coordinated care pilot project
would be substituted. She relayed that the other parameters
would remain the same, to include: 500 voluntary participants
from Denali Kid Care with a focus on nutrition. She directed
attention to page 10, line 15, which added a requirement for a
report describing the results of the pilot project and any
estimated savings.
5:19:47 PM
REPRESENTATIVE TARR removed her objection. There being no
further objection, Amendment 4, labeled 29-LS1096\H.6, Glover,
2/19/16, was adopted.
[HB 227 was held over.]
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 227 Proposed Amendment packet_3.2.16.pdf |
HHSS 3/3/2016 3:15:00 PM |
HB 227 |
| HB 227 Testimony_Chris Gunderson_denali.pdf |
HHSS 3/3/2016 3:15:00 PM |
HB 227 |
| HB 227 Testimony_Family Centered Services.pdf |
HHSS 3/3/2016 3:15:00 PM |
HB 227 |
| HB 227 DHSS _Waivers Options Graphics i & k_response to 2.23.2016.pdf |
HHSS 3/3/2016 3:15:00 PM |
HB 227 |
| HB 227 DHSS_federal Medicaid Authorities_home & community.pdf |
HHSS 3/3/2016 3:15:00 PM |
HB 227 |
| HB 227 Testimony_ACoA Comment_3.3.16.pdf |
HHSS 3/3/2016 3:15:00 PM |
HB 227 |
| HB 227 Amendment proposal from AK hospitalists.pdf |
HHSS 3/3/2016 3:15:00 PM |
HB 227 |