Legislature(2003 - 2004)

03/12/2003 01:32 PM HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                SB  41-MEDICAID COSTS AND CRIMES                                                                            
CHAIR  DYSON announced  SB  41  to be  up  for consideration.  He                                                               
called an at-ease from 2:37-2:38 p.m.                                                                                           
SENATOR WILKEN  moved to adopt  the sponsor substitute to  SB 41,                                                               
version  23-LS0204\I,  dated  3/12, as  their  working  document.                                                               
There were no objections and it was so ordered.                                                                                 
SENATOR GREEN, sponsor, said their  work had produced a number of                                                               
changes  and  almost  everyone  agrees  that  it  works  for  the                                                               
department as well as provides  the protection and assurance that                                                               
medical assistance will be given the highest and best use.                                                                      
She reviewed a  sectional analysis that each member  had in their                                                               
packets. She  said that  section 2  is particularly  important to                                                               
her in  that the Department  of Health and Social  Services would                                                               
undertake  a complete  review of  outstanding  claims of  medical                                                               
assistance   providers  charged   with  misconduct   involving  a                                                               
controlled  substance.  If  there are  outstanding  claims,  they                                                               
would be on that review.                                                                                                        
Section  3  adds new  sections  to  AS 47.05.  regarding  medical                                                               
assistance  fraud. It  sets out  the provisions  by which  annual                                                               
audits will  be maintained  and conducted.  The number  of audits                                                               
required  annually   shall  be  .75%  of   all  enrolled  medical                                                               
assistance  providers, but  may not  be  fewer than  75 and  must                                                               
include both  on-site and desk  audits and  must be a  variety of                                                               
provider types.                                                                                                                 
SENATOR GREEN said these audits  would cover doctors and dentists                                                               
from the largest hospital to  the smallest provider. All entities                                                               
will  have  the  potential  of being  audited.  It  outlines  the                                                               
description  of a  successful contractor.  It  is important  that                                                               
there  be  certain  characteristics  and  qualifications  of  the                                                               
auditor  so  legislators  could  feel  confident  that  they  are                                                               
competent enough to conduct the full audit.                                                                                     
Section  (b)  requires  the department  to  begin  administrative                                                               
proceedings to  recoup identified overpayments within  90 days of                                                               
receiving  each audit  report and  requires  the commissioner  to                                                               
provide copies of  all audit reports to the  attorney general for                                                               
purposes  of screening  for criminal  violations. Subsection  (c)                                                               
has  legislative   intent  that  the  state   share  a  recovered                                                               
overpayment or account for it  separately, a portion of which may                                                               
be appropriated to the department to pay for the annual audits.                                                                 
SENATOR  GREEN  said they  want  to  make  sure that  the  audits                                                               
continue on  a regular basis  and the legislature is  required to                                                               
review  the request  for payment  for the  audit. Subsection  (d)                                                               
allows  for audit  and inspections  of the  records of  a medical                                                               
assistance provider that are pertinent  to providing service to a                                                               
medical assistance recipient. Subsection  (e) says the department                                                               
is not prohibited  from performing other audits  that are allowed                                                               
or required under other laws.                                                                                                   
SENATOR GREEN  said that  AS 47.05.210,  page 3,  establishes new                                                               
criminal statutes with  penalties ranging from class  B felony to                                                               
class B  misdemeanor. AS 47.05.220  has notice of charges  by the                                                               
attorney general  that a medical  assistance provider  is charged                                                               
with  fraud.  AS  47.05.230  allows   charges  to  be  aggregated                                                               
depending  on  the  amounts involved.  AS  47.05.240  allows  the                                                               
commissioner  of DHSS  to exclude  a medical  assistance provider                                                               
from participating in  the program if they had  been convicted of                                                               
medical  assistance fraud  or misconduct  involving a  controlled                                                               
substance.  It  includes  persons  convicted  under  both  Alaska                                                               
statutes,  U.S. court  or a  court of  another state  for similar                                                               
crimes.  The  exclusion may  be  up  to  10 years  following  the                                                               
unconditional discharge. AS 47.07.010  defines the purpose of the                                                               
medical  assistance  program  for   needy  persons.  All  records                                                               
pertinent  to   providing  services  to  a   medical  assistant's                                                               
recipient  must  be  available   for  inspection,  not  just  the                                                               
financial  records.  At  one  point   it  listed  only  the  word                                                               
SENATOR WILKEN asked what is  meant by "statewide sample" on page                                                               
2, line 23 and 24.                                                                                                              
MS. TRACI CARPENTER,  Staff to Senator Green,  replied that there                                                               
are approximately 10,000 enrolled medical assistance providers.                                                                 
SENATOR WILKEN asked  if there would always be at  least 75 under                                                               
audit and a maximum of .75%, which would be 100.                                                                                
MS. CARPENTER indicated that was correct.                                                                                       
CHAIR DYSON asked if someone is  convicted of this kind of fraud,                                                               
is there an automatic action against their medical license.                                                                     
SENATOR GREEN replied that she  didn't think that was necessarily                                                               
the case.                                                                                                                       
MR. LABBE said he wasn't sure either.                                                                                           
CHAIR  DYSON  said he  understood  that  most welfare  fraud  was                                                               
perpetrated  by  applicants  and  that most  Medicaid  fraud  was                                                               
perpetrated by providers.                                                                                                       
SENATOR  GREEN said  people  wanted to  make  sure this  language                                                               
applies  to medical  service  providers, so  that  they could  be                                                               
prosecuted under this statute.                                                                                                  
MS.  CATHY   GIESSEL,  Alaska  Nurse   Practitioner  Association,                                                               
wholeheartedly  endorsed SB  41. However,  they have  one concern                                                               
with some  terms that  appear in the  bill. The  term "physician"                                                               
has been used and she thought  it was important to recognize that                                                               
AS  47.07. says  there  are numerous  categories  of health  care                                                               
providers,  not  just  physicians.   There  are  dentists,  nurse                                                               
practitioners,  chiropractors, etc.  Several places  in the  bill                                                               
the terms  medical practice, medical care  and medical profession                                                               
are  used. It  sounds as  thought the  bill is  directed only  to                                                               
physicians and she  recommended that on page 1, line  14; page 2,                                                               
lines 1  and 2;  and page  7, line 17,  that instead  of "medical                                                               
care or medical  provider" the terms "health care  or health care                                                               
provider" be  substituted. That would  encompass all  the various                                                               
providers who provide services to Medicaid recipients.                                                                          
She  said this  bill directs  attention to  controlled substances                                                               
and  the DHSS  last  year put  out a  policy  that restricts  the                                                               
health care providers from the  amount of oxycodone products they                                                               
can  prescribe  each  month  to  Medicaid  recipients.  So,  some                                                               
controls are already in place.                                                                                                  
SENATOR GREEN  moved an amendment  on page  1, line 14  to delete                                                               
"medical" and  insert "healthcare"; on  page 2, line 1  to delete                                                               
"medical"  and insert  "health";  on  page 2,  line  2 to  delete                                                               
"medical" and  insert health  care"; and  on page  7, line  17 to                                                               
delete "medical"  and insert "health".  There were  no objections                                                               
and it was so ordered.                                                                                                          
MR. LINDSTROM supported the new  language. He said he didn't know                                                               
what  the fiscal  note would  be, but  could probably  get a  one                                                               
within 24 hours.  The fiscal note for their  original bill, which                                                               
they  assumed would  be  200 audits  a year,  and  that was  $2.9                                                               
million. He estimated  that this bill would be less  than half of                                                               
CHAIR DYSON  said he  heard that  investigations in  other states                                                               
for Medicaid  fraud have produced  more revenue than the  cost of                                                               
the audits and he hoped that would  be true here and taper off as                                                               
the word got  around. He asked what could be  done with the money                                                               
that is recovered.                                                                                                              
SENATOR  GREEN   replied  that   it  would   require  legislative                                                               
approval, but  the intent would  be for it  to go to  the general                                                               
fund and to be set aside for the audits.                                                                                        
MR.  LINDSTROM  added that  in  the  previous fiscal  note,  they                                                               
estimated  recoveries  beginning  in  FY05  of  approximately  $4                                                               
million  with  $3 million  in  expenditures  and increasing  over                                                               
SENATOR GREEN noted that many  other states have these provisions                                                               
in place already.                                                                                                               
SENATOR WILKEN moved to pass  CSSSSB 41 (HES) from committee with                                                               
individual recommendations  and pending  fiscal note.  There were                                                               
no objections and it was so ordered.                                                                                            

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