04/13/1993 01:30 PM House FIN

  HB 155    An Act relating to audits of health facilities.                    
                                                                               
            HB   155  was   held  in  Committee   for  further                 
            discussion.                                                        
  HOUSE BILL 155                                                               
                                                                               
       "An Act relating to audits of health facilities."                       
                                                                               
  REPRESENTATIVE GARY DAVIS stated HB  155 addresses hospitals                 
  and nursing homes  throughout the State which  receive large                 
  portions  of their revenue  from the  State/Federal Medicaid                 
  program.    The Alaska  statutes  require that  an  audit be                 
  performed by the Department of Health and Social Services to                 
  determine the rates charged for various medical services.                    
                                                                               
  There  are  27  medical  facilities   in  Alaska  which  the                 
  Department  is  obligated to  perform  an annual  audits on.                 
  When  these  audits  are  completed,  the facility  and  the                 
  Department agree what  rates can   appropriately be  charged                 
  for  the  following  fiscal  year.    The  legislation  adds                 
  clarity, consistency  and timeliness  in the  Medicaid audit                 
  process.                                                                     
                                                                               
  GARRY  PESKA,   VICE  PRESIDENT  OF  FINANCE,  ALASKA  STATE                 
  HOSPITAL  &  NURSING  HOME  ASSOCIATION  (ASHNHA),   JUNEAU,                 
  ALASKA, remarked that ASHNHA and  the Department have worked                 
  together  to address  concerns  contained in  the  committee                 
  substitute.   He added each area  contains deadlines for the                 
  bill completion.                                                             
                                                                               
  Co-Chair MacLean noted her  concerns with conflicts  between                 
  the  regulatory agencies.   Mr. Peska  pointed out  that the                 
  deadline for  the completion of the audit  report extends by                 
  the  same  number of  days in  which  ASHNHA must  file late                 
  reports.                                                                     
                                                                               
  Co-Chair  MacLean   recommended  extending   the  time   for                 
  facilities to complete the paper work due to the Department.                 
  Mr.  Peska  admitted   there  is  a  conflict   between  the                 
  Department of  Health and  Social Services  and the  nursing                 
  homes.  The nursing  homes feel that the process  is broken.                 
  Consequently,  provided  the proposed  legislation  in order                 
  that the guidelines could be clearly defined.                                
                                                                               
  Representative Martin questioned how the  back log of audits                 
  would be  handled.  Mr.  Peska advised that  the legislation                 
  does not address those audits.   Representative Martin asked                 
  the most fair  way to  determine the situation.   Mr.  Peska                 
  stated that passage of the bill would guarantee fairness.                    
                                                                               
  Representative  Hanley  interjected  that   the  Committee's                 
  concerns  have  been  addressed  in  the  work  draft.    He                 
  summarized, the  bill currently is  at a point  of different                 
  opinions between the  Legislature and  the Department.   The                 
                                                                               
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  Supreme Court  ruling states  that the  Department does  not                 
  have the ability  to recoup payments  even if they pass  the                 
  audit if they  have over-paid.  They would  then have to pay                 
  back the federal government the 50%.                                         
                                                                               
  Co-Chair MacLean asked if a consideration was made to change                 
  the auditing procedure to  every other year for  the smaller                 
  facilities.  Representative Gary  Davis responded that  most                 
  states do not perform annual audits  of all facilities.  The                 
  Alaska Department of Health and  Social Services does annual                 
  audits of all  facilities and do  not intent to change  that                 
  policy.                                                                      
                                                                               
  Mr. Peska explained "retroactive" recoupment  in relation to                 
  the federal  governments position.   The federal  government                 
  has  recognized  that  some  states  have  prospective  rate                 
  setting systems.   They have  not taken the  position to  go                 
  back and retroactively  recoup when they have  a prospective                 
  rate setting system in place.                                                
                                                                               
  RANDY   WELKER,   LEGISLATIVE  AUDITOR,   LEGISLATIVE  AUDIT                 
  DIVISION, addressed the HESS committee substitute.  He noted                 
  the  concern  within  the Department  of  Health  and Social                 
  Services to seek recoupment resulting  from overpayment.  An                 
  additional  issue  is the  rigid audit  process.   The House                 
  Finance  Committee  work  draft   addresses  many  of  these                 
  concerns.                                                                    
                                                                               
  Mr. Welker recommended that  language to recoup  overpayment                 
  when  costs have been  clearly determined  be included.   He                 
  acknowledged the frustration of  the nursing home facilities                 
  recoupment process.  Mr. Welker  explained the conditions of                 
  overpayment.                                                                 
                                                                               
  Representative  Hanley  noted  the  two  varying   processes                 
  occurring within the legislation,  the rate setting  process                 
  and the audit  process.  He  thought, the audit process  has                 
  been behind over the years.                                                  
                                                                               
  Representative Hanley recommended that the $4 million dollar                 
  fiscal note  be zeroed out.  The  other fiscal notes for the                 
  additional audits can be met  with staff currently employed.                 
  Representative Davis disagreed and  thought that the  fiscal                 
  notes would be  necessary.  He  said that the original  bill                 
  established a time  line placing  the Department in  stress.                 
  The  Department would  not be  able to  complete  an orderly                 
  audit.    Representative  Davis  recommenced  changing   the                 
  wording in the bill from  "shall" to "may" in order  to meet                 
  to the guidelines.                                                           
                                                                               
  Mr.   Peska  explained  the   audit  process.    Retroactive                 
  recoupment  is   not  provided   for  within   the  proposed                 
                                                                               
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  legislation.    Although,   the  adjustment  accounting   is                 
  itemized.                                                                    
                                                                               
  Representative  Hanley  MOVED to  adopt  the work  draft #8-                 
  LS0451\J,  4/06/93  as  the version  before  the  Committee.                 
  There being NO OBJECTION, it was so ordered.                                 
                                                                               
  HB 155 was HELD in Committee for further discussion.