Legislature(1999 - 2000)

04/04/2000 02:00 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
HOUSE BILL NO. 325                                                                                                              
                                                                                                                                
An Act relating to priorities, claims, and liens for                                                                            
payment for certain medical services provided to                                                                                
medical assistance recipients; and providing for an                                                                             
effective date.                                                                                                                 
                                                                                                                                
JON SHERWOOD, DIVISION OF MEDICAL ASSISTANCE, DEPARTMENT OF                                                                     
HEALTH AND SOCIAL SERVICES, testified in support of the                                                                         
legislation.  He noted that HB 325 would:                                                                                       
                                                                                                                                
? Provide the Department of Health and Social Services                                                                          
with unambiguous authority to recover medical costs                                                                             
incurred by the Division of Medical Assistance when a                                                                           
legal settlement making a monetary award to cover                                                                               
injuries has been made; and                                                                                                     
? Allow providers to bill the Division for services up to                                                                       
twelve months from the date of service. The current                                                                             
period is six months.                                                                                                           
                                                                                                                                
Mr. Sherwood stated that the Department would like to                                                                           
provide an exemption for good cause. If there was good cause                                                                    
for missing a deadline, then the services that have been                                                                        
provided should be paid for by the Department.                                                                                  
                                                                                                                                
Co-Chair Therriault noted that the members were provided                                                                        
with a proposed committee substitute, 1-GH2058\H,                                                                               
Lauterbach, 4/4/00. [Copy on File].  He noted that the                                                                          
proposed committee substitute would separate the two issues.                                                                    
The draft contains the provisions of the bill going after                                                                       
the third party payments.  He noted that he was attempting                                                                      
to determine a way to cover the assisted living aspect of                                                                       
the bill.                                                                                                                       
                                                                                                                                
In response to a question by Representative Phillips, Mr.                                                                       
Sherwood explained that the legislation would apply to                                                                          
Medicaid and chronic and acute medical assistance                                                                               
recipients.                                                                                                                     
                                                                                                                                
Co-Chair Therriault inquired if a third party claim could go                                                                    
beyond the six months.  Mr. Sherwood responded that at                                                                          
present time, you could.  If you have private insurance, the                                                                    
provider bills insurance and then bills the Division for the                                                                    
balance of the claims.  The proposed legislation does not                                                                       
change that provision.                                                                                                          
                                                                                                                                
Co-Chair Therriault noted that the committee substitute                                                                         
drops off the blanket extension to twelve months from                                                                           
payments of providers.  He referenced the fiscal note,                                                                          
pointing out that the committee substitute would capture                                                                        
additional revenue.                                                                                                             
                                                                                                                                
In response to concerns voiced by Representative J. Davies,                                                                     
Mr. Sherwood noted that in the portion being deleted, the                                                                       
Division had proposed to extend the filing deadline for                                                                         
providers.  If there was no insurance to provide service,                                                                       
the third party providers would then have six months.  Under                                                                    
the proposed change, the period would be extended to twelve                                                                     
months; the committee substitute would keep it at six                                                                           
months. Mr. Sherwood added that the committee substitute                                                                        
would also eliminate exemptions for cause.  He observed that                                                                    
twelve months is the national standard practice for the                                                                         
industry.                                                                                                                       
                                                                                                                                
Co-Chair Therriault questioned the fiscal impact of allowing                                                                    
exemptions for "good cause". Mr. Sherwood did not know the                                                                      
amount.                                                                                                                         
                                                                                                                                
Representative J. Davies questioned the intent of the                                                                           
committee substitute.  He recommended that providers should                                                                     
have the opportunity to collect.                                                                                                
                                                                                                                                
Co-Chair Mulder pointed out that most claims would be made                                                                      
by doctors and hospitals and that it would be "reasonable"                                                                      
to expect billing within six months.  He added, that is                                                                         
standard practice in Alaska.                                                                                                    
                                                                                                                                
BOB LABBE, DIRECTOR, DIVISION OF MEDICAL ASSISTANCE,                                                                            
DEPARTMENT OF HEALTH AND SOCIAL SERVICES, provided                                                                              
information on the legislation.  He stated that there is not                                                                    
a lot of business that comes this way, but emphasized that                                                                      
there are some small providers with late filings. Mr. Labbe                                                                     
noted that the federal government allows twelve months to                                                                       
file a claim.  Alaska has a six-month filing time.  He                                                                          
stressed that the cost of longer filings is minimal and it                                                                      
would help the "provider community".                                                                                            
                                                                                                                                
Co-Chair Mulder asked if passage of the legislation would                                                                       
provide an "incentive" for companies to be late in their                                                                        
submissions. Mr. Labbe responded that 90% percent is                                                                            
received within the first 30 days.  He stated that it is the                                                                    
anomalies that come in later.  He admitted that the                                                                             
Department would have changed it in regulation if it had                                                                        
been possible.                                                                                                                  
                                                                                                                                
Co-Chair Mulder suggested that it would take longer to close                                                                    
out the State's accounting books.  Mr. Labbe explained that                                                                     
the Medicaid process runs on a cash basis and he did not                                                                        
foresee a problem in the Department's bookkeeping.                                                                              
Representative J. Davies pointed out that the incentive to                                                                      
file timely exists in order to receive payment.                                                                                 
                                                                                                                                
LEONARD ANDERSON, (TESTIFIED VIA TELECONFERENCE),                                                                               
REPRESENATIVE FOR THE STATE OF ALASKA THIRD PARTY RECOVERY                                                                      
FOR MEDICAID MATTERS, ANCHORAGE, stated that the current                                                                        
bill contains a "notice" problem and recognition in the                                                                         
State's right to recover Medicaid payments from a liable                                                                        
third party.  Currently, when cases are made and payments                                                                       
are paid, the State finds out about third party recipients                                                                      
through the third party. The State Medicaid portion is                                                                          
included in any recovery. Mr. Anderson found that the State                                                                     
is receiving notice of a potentially liable third party well                                                                    
into the case, possibly during settlement or after.  The                                                                        
bill would allow absolute notice of a third party earlier in                                                                    
the process.                                                                                                                    
                                                                                                                                
Mr. Anderson continued, the second problem is that current                                                                      
statute is based on segregation principles.  The new                                                                            
legislation gives the State the opportunity to get a better                                                                     
bargaining position and would allow them to have an                                                                             
opportunity to affect what is liable.                                                                                           
                                                                                                                                
LISA KIRSCH, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF LAW,                                                                     
offered to answer questions of the Committee members.                                                                           
                                                                                                                                
LORRAINE DERR, ALASKA STATE HOSPITAL AND NURSING HOME                                                                           
ASSOCIATION (ASHANHA), JUNEAU, testified in support of the                                                                      
legislation as originally written.                                                                                              
                                                                                                                                
Co-Chair Therriault advised that he would not offer the                                                                         
committee substitute.  He noted that the Legislature would                                                                      
continue to work with the Department on the expenditure side                                                                    
of the fiscal note through the Conference Committee.                                                                            
                                                                                                                                
Co-Chair Mulder MOVED to report CS HB 325 (JUD) out of                                                                          
Committee with individual recommendations and with the                                                                          
accompanying fiscal note.                                                                                                       
                                                                                                                                
CS HB 325 (JUD) was reported out of Committee with a "do                                                                        
pass" recommendation and with a fiscal note by Department of                                                                    
Health and Social Services dated 2/2/00.                                                                                        
                                                                                                                                
(TAPE CHANGE, HFC 00 - 100, Side 2).                                                                                            

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