HB 315-ELECTRONIC VISIT VERIFICATION: MEDICAID  3:14:18 PM VICE CHAIR LIZ VAZQUEZ announced that the first order of business would be HOUSE BILL NO. 315, "An Act relating to an electronic visit verification system for providers of certain medical assistance services." 3:14:37 PM ANITA HALTERMAN, Staff, Representative Liz Vazquez, Alaska State Legislature, paraphrased from the Sponsor Statement [included in members' packets], which read, in part: This bill requires the implementation and use of EVV systems for PCA services in Alaska. The EVV systems monitor and verify home health services delivered by PCAs by tracking whether home visits occurred and the time spent in the home. The EVV system will verify in real time the physical location of the provider (PCA) and the recipient after they both "sign in" and "sign out" of the EVV system. The "sign in" and "sign out" is usually done by land-line or cell phone and the location is verified by the EVV program. Thus, the EVV system reduces waste, abuse and fraud by capturing and reporting actual time worked by the PCA or home care provider. The goal of HB 315 is to ensure the State only pays providers for approved services rendered by appropriate home health agency personnel while within the recipients' home or other authorized setting. This ensures that Medicaid recipients receive services as authorized. It is anticipated that billing errors, fraud, and abuse will be reduced significantly through verification of home visits through these efforts. As Alaska's population is aging, the demand for PCA and home care services will increase. Accordingly, it is will become increasingly more important to ensure that home care is delivered properly and that publicly funded resources are being managed and spent appropriately. It is anticipated that Alaska has the potential to realize savings of between $15 million and $37 million dollar. MS. HALTERMAN relayed that some of the major benefits of the proposed HB 315 included that the technology could potentially provide early identification for adult protective service issues by identifying neglect situations and triggering alerts to the agencies when a care giver did not show up at the home, which would also realize savings for reducing payment of services not rendered. She directed attention to supportive documents which addressed the return on investment [included in members' packets].   3:17:02 MS. HALTERMAN paraphrased from some proposed changes [included in members' packets] from the original bill to a not yet introduced committee substitute (CS) for HB 315, labeled 29- LS1287\W, Glover, 2/18/16 [included in members' packets], which read: Upon reviewing the bill as it had been written, I'd realized that home and community based and personal care attendant services are NOT always provided in the home but that sometimes they are provided in other settings. The language change on version W addresses the need for more flexibility with language to accommodate the various settings where services may be provided. The addition of language to allow for "other approved settings" addressed that issue.   3:17:50 MS. HALTERMAN moved on to paraphrase proposed changes [included in members' packets] from the not yet introduced Version W to a not yet introduced committee substitute (CS) for HB 315, labeled 29-LS1287\E, Glover, 3/21/16 [included in members' packets], which read: Version E keeps the change made in version W and adds a few others as follows: 1. Prior to requesting a hearing over this bill, SDS inquired of our office about the development of the new system they appear to have thought they were to develop in light of language used in versions A and W of this bill. The changes to version H make it clear that the Department shall procure an electronic visit verification system and not develop one of their own. The development of a system would be costly and the Department alerted me on March 16, 2016 that this bill would likely have a $5 million dollar fiscal note, this lead us to understand that they had not understood the intent of this bill. In addition, the changes in version H also add a stipulation that the system must allow providers to electronically document the service in near real-time where it is technically feasible. This will allow us to address allowing more flexibility in remote areas with no telephone, cell phone or computer access. It has been discovered that vendors appear to offer another solution for those settings that actually is entered after the visit occurs. These vendors offer a unique number to assure that the above information is collected and stored when technology solutions are not feasible. The bill ensures that any vendor must be capable of meeting these requirements. 2. The PCA providers have raised issues with a third party employment relationship concern that has been addressed by the Federal Department of Labor and our office felt the need to place assurances in the bill that address this issue. We do not intend to replace the role of the PCA provider or Home and Community based provider agencies in the role of employer. In order to address that concern, we changed the language of the bill in order to ensure the providers still have the ability to be alerted to concerns that need to be managed by the agency. Therefore it seems advisable to add language that requires the vendor to alert the provider agency of any gaps or missed appointments in order for them to remediate the issue. The state also should have the option to receive these alerts and the new CS addresses that issue. 3. The final change addresses integration concerns that agencies raised. Some claim to have proprietary systems that they feel will no longer be usable with a vendor based EVV system. The final version E adds a new section that addresses this by requiring the vendor to integrate any existing EVV systems into the vendor solution. 4. We had leg legal define "real time" as "within a couple of minutes of the occurrence". This was done in order to identify any gaps in service or to allow adult protective service issues to be identified as early as possible for the most vulnerable beneficiaries. 3:21:34 PM MS. HALTERMAN summarized that the bill "is easy to use, it doesn't require hardware or software, and it does assure that the services that are paid for by state government are actually being rendered within those homes." 3:21:50 PM VICE CHAIR VAZQUEZ opened public testimony. 3:22:15 PM ALLISON LEE, State Director; Chair, Rescare Alaska, Alaska PCA Providers Association, stated support for electronic visit verification (EVV) systems for PCA (personal care attendant) services, and pointed to some issues with the not yet proposed committee substitute. She directed attention to a white paper stating general support for the proposed bill [included in members' packets], and she noted that the Department of Health and Social Services had the authority to establish requirements for EVV without any legislation. 3:23:55 PM DENISE TOCCO, Sandata Technologies, stated support for proposed HB 315, and reported that Sandata Technologies was a vendor currently which offered EVV systems in seven states, and had been providing this EVV technology to payers and providers for the past 36 years. She stated that the EVV systems had proven to remove fraud and improve quality by ensuring that only visits that were properly verified were allowed to be submitted as claims. She declared that the third party outcomes showed that EVV programs could reduce claims costs by as much as 50 percent without changing the benefit structure or care delivery model, as the savings were a result of the removal of fraud. She estimated that EVV systems could provide a "minimum claims reduction of 5 percent," which represented an estimated $50 million savings in the first year prior to any Federal Medical Assistance Percentages (FMAP). She relayed that Centers for Medicare & Medicaid Services (CMS) had recently approved enhanced FMAP rates at 90 percent for one time fees and 75 percent for recurring fees for two states with EVV programs. She declared that proposed HB 315 was an important first step toward improving efficiency and insuring care, after which the Department of Health and Social Services could evaluate and procure an EVV solution that works best for Alaska. She suggested that Sandata Technologies recommended a single vendor solution in order to maximize program savings, and increase quality of care with consistent monitoring and alerts. She also recommended that an EVV solution be required to integrate with existing provider software systems, to help maintain the investments made by local providers. She shared that the majority of home care providers in most states had not made an investment in technology and would welcome solutions to help automate their businesses. She reported that EVV solutions were sold as a software service, and that there was not any software or hardware to buy. She relayed that it would take four to six months to implement a statewide program. She reiterated support for the proposed HB 315. 3:26:32 PM MS. TOCCO, in response to Representative Tarr, said that she was affiliated with Sandata Technologies, a vendor providing EVV software to state programs. REPRESENTATIVE TARR asked if Sandata anticipated an interest in providing the services, should the proposed bill pass. MS. TOCCO replied that Sandata would like to bid on any public procurement as a result of the proposed bill. 3:28:52 PM GREY MITCHELL, Director, Division of Labor Standards & Safety, Department of Labor & Workforce Development, in response to Representative Tarr, explained that he did not have any specific information about the services, as his involvement was for the potential impacts on labor laws and any EVV requirement issues that may impact the state. 3:29:42 PM MS. TOCCO, in response to Representative Tarr, offered an explanation as an industry vendor, and not specifically as a representative from her company. She explained that non-urban visits could be verified through a variety of ways, including telephonic verification of visits, cellular GPS solutions, home- based device solutions, and she acknowledged that the geography of Alaska offered some unique challenges. She shared that her company had operated in many large states with rural areas, where connectivity could be a challenge, and the company, and other vendors, had found multiple solutions for verification of visits. 3:30:44 PM REPRESENTATIVE WOOL asked about the changes in technology over the past 36 years that Sandata Technologies had been in business. MS. TOCCO replied that her company had used telephones, and had held the original patents on electronic visit verification (EVV) although that had since expired. 3:31:16 PM CONNIE SIPE, Executive Director; Co-Chair, Center for Community, Alaska PCA Providers Association, reported that Alaska PCA Providers Association represented the largest provider companies in Alaska. She stated support of the proposed bill, in concept, and directed attention to the aforementioned white paper [included in members' packets]. She expressed desire to work on the not yet introduced committee substitutes. She relayed that the Medicaid expenditures for PCAs in the last year had been about $89 million in Alaska, pointing out that the provider agencies were "economic engines in the communities where we provide many, many hours of jobs and work." She reported that the white paper had urged a standards based method, used by Washington and other states, which had set a standard for the kind of EVV systems to be used statewide, so that the providers could use an integrated software system. She noted that the State of Alaska was still requiring hard copy time sheets signed by the worker and the client. She offered belief that one uniform state system could be very inefficient as there were large providers from multiple states with different systems. She expressed concern with a real time window as it imposed an implied monitoring obligation that could be difficult to staff. She relayed information from a CMS seminar during which some states had been told they were "joint employers" of personal care attendants, as indicated by an EVV system with real time access by the state. She stated that, as there were not any clear federal regulations, this was currently based on interpretation by the U.S. Department of Justice. She pointed out that this could affect the state's liability for overtime pay to a personal care attendant. She pointed out that, although the aggregate cost of Medicaid spent on personal care attendants seemed large, this was so much less per client than the cost of nursing homes. She reported that the personal care attendants were the lowest paid per unit service in the Alaska Medicaid system. 3:37:24 PM REPRESENTATIVE TARR relayed that this issue had arisen in the past, as there had been a re-evaluation of the time allotted for personal care services (PCAs). She relayed that some services had been re-scheduled into 15 minute increments, which she opined had scaled back the amount of time allocated to patients. She asked if this was putting a lot of strain on the system to provide the services in the allotted time, and possibly taking away from provider time with the client. MS. SIPE reported that Medicaid costs for the PCAs had come down from over $100 million annually, partially as an effort by the Department of Health and Social Services to become more prescriptive about the amount of time and service. She noted that, in other states, many consumers did not have land line phones, and not all PCAs had a cell phone or availability of a land line. She expressed concern for this, sharing that sometimes workers were met by a crisis immediately upon arrival at a job, and were not able to sign-in right away. She reminded that the agencies were in a constant back and forth with workers and clients, so were much more aware of the goings-on, and that this provider information and data were kept available to the state upon request. 3:41:01 PM REPRESENTATIVE TARR asked how frequently the association was audited. MS. SIPE relayed that the state would draw 50 of the higher risk service providers each year, of which a number were PCA agencies and home and community based providers. She shared that her agency included 10 providers and had been audited three times, although never found to have any problems. She noted that, as they were subject to audit for seven years, they kept the records for that far back. 3:42:30 PM VICE CHAIR VAZQUEZ asked about the periods of time for the three audits. MS. SIPE offered her belief that the state audits were for service in 2006, then again for services in 2010 and in 2011. VICE CHAIR VAZQUEZ asked about the compensation received from the Department of Health and Social Services for every 15 minutes of service. MS. SIPE stated that the Medicaid base rate for personal care in Anchorage, although there were some regional adjustments because of cost, was $6.10 for each 15 minute unit. She reported that many PCAs in this area had Certified Nursing Assistant (CNA) certificates, and asked to be paid $15 - $16 per hour. She added that all the unpaid costs, support costs, and supervisory costs were also paid out of this, as they only billed for the actual services delivered. She pointed out that the agency paid the travel time, as it was not billed to Medicaid. MS. SIPE, in response to Vice Chair Vazquez, said that the regional cost in SE Alaska was 9 percent higher, adding about $2 per hour. She relayed that the PCAs started at $14.58 or $15.02, and, dependent on prior experience, could start higher, up to $16 per hour. She said that it was difficult to pay less than $16 per hour in Anchorage, although in smaller communities in SE Alaska PCAs were sometimes paid $14.50 - $15 per hour. VICE CHAIR VAZQUEZ asked if the agency offered health insurance. MS. SIPE replied that the agency would be obligated to start providing health insurance for people with variable hours, fluctuating around 30 hours per week, on July 1. She stated that it was likely they would not be able to provide this, and would then also have to drop the health insurance for 40 hour per week workers as the agency could not afford to pay the insurance premiums. She acknowledged that this would result in the payment of penalties. She reported that the monthly insurance premium for a worker with no dependents was $950 per month, with a fairly high deductible. She stated that it was not possible to pay these premiums for those only working 30 hours per week. She shared that the agency was looking at lower cost policies with higher deductibles that would still meet the Patient Protection and Affordable Care Act (PPACA) requirements. She said that part time workers received the required benefits of unemployment insurance, a small Christmas bonus, and an occasional paid holiday each year. She reported that the [profit] margin was very low as there was a lot of paid time for training, no-shows, supervisors, billing clerks, compliance staff, and "other things." [HB 315 was held over.]