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).