Legislature(1993 - 1994)
04/13/1993 01:30 PM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
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 6 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 7 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.