HB 315-ELECTRONIC VISIT VERIFICATION: MEDICAID  4:31:24 PM CHAIR SEATON announced that the next 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." 4:31:43 PM REPRESENTATIVE VAZQUEZ moved to adopt CSHB 315, Version 29- LS1287\E, Glover, 3/21/16, as the working document. REPRESENTATIVE STUTES objected 4:32:18 PM ANITA HALTERMAN, Staff, Representative Liz Vazquez, Alaska State Legislature, read from prepared testimony as follows: The most salient points of this bill is that the bill protects the most vulnerable of our population. It does so by allowing an alert to be triggered for the home and community based provider agency who then can remediate this matter with a beneficiary. The goal of HB 315 is to ensure that the state only pays providers for the approved services that are rendered by the appropriate home health agency personnel while within that recipient's home or other authorized setting. Alaska's population is aging and the demand for PCA and home care services will increase. Accordingly it will continue to become increasingly more important to ensure that the home care is delivered properly and that publically funded resources are being managed and spent appropriately. It is anticipated that Alaska has the potential to realize savings of between $15 million and $35 million with this bill. CHAIR SEATON asked how the anticipated savings are to be realized. 4:34:01 PM MS. HALTERMAN answered that she would like to get a little bit more background on the bill, there's been a lot of questions about the bill that have been raised by the public and the Department of Health and Social Services. She asked that she be allowed to read notes written for the record, as follows: House Bill 315 is the electronic visit verification Medicaid bill. A 2012, the Government Accountability Office (GAO) report has indicated that 40 percent of all national fraud convictions initiated by the Medicaid Fraud Control Units (MFCUs) are related to services that are rendered in the home and community based settings. According to the institutes of Medicaid ... medicine fraud ... medical fraud and abuse in health care costs $75 billion annually, and the cost to unattended patients can be immeasurable. It has been reported that the adoption of use of technology is not only about compliance, it is about survival. Even FedEx deliveries of a $4 item requires an electronic signature proving the delivery. Why shouldn't something as valuable as patient care be electronically documented and verified? Perspective approaches to combatting fraud, waste, and abuse, are far more effective than reactive or retrospective approaches such as audits and imposing new mandates. To give a little bit of history, the State of Alaska has previously considered using electronic visit electronic verification systems. On July 28, 2014, it was reported by the Anchorage or the ... the ADN that the state was considering a pilot for EVV. The Assistant Attorney General at that time reported that Medicaid fraud was costing Alaska Medicaid a conservative estimate of $45 million per year. EVV systems are easy to use, they don't require any installation of software or hardware. They ensure that beneficiaries receive the services that are authorized for the support that has been approved and for which the state is being billed. A person who can use EVV, typically can use the telephone. EVV is used for compliance and for quality assurance purposes throughout the nation. Beneficiaries are identified by either a landline or a GPS location and caregivers are identified by a unique identifier, and a biometric match that allows the system to verify that the calls were made from the proper caregiver for the beneficiary. EVV systems authenticate the presence of service providers, they may rely on telephony, which is the most commonly used form of EVV, GPS tracking, biometrics, computers for the provider agencies, mobile tablets, tokens, or other applications - those names of devices vary by vendor, and then smart phones. An individual without landline or systems used to authenticate services can be provided a device by a vendor, kind of like a pager. This generates a client ID with a ... that provides a digital readout that can be given to the caregiver who can call in and then enter that code into a system about that client. Our research indicates that it appears the average cost of ... of that verification is approximately $0.15 per visit. Biometrics are critical component for successful EVV implementation. They ensure further reduction of fraud, waste, and abuse by identifying that caregiver's identify. Statewide independent approaches involve vendor solutions and are considered funded mandates. These are cloud-based platforms that allow for remote patient monitoring. The states that have chosen the statewide approaches have done so because they want to maintain oversight over their EVV systems. Statewide vendor solutions do the following: it allows the state to access federal assistance matching percentages of up to 90 percent for frontend system development; they gain 75 percent for recurring costs when the systems are plugged into the claims system; it removes fraud liability from the consumer directed home care provider agency and it places it directly on the consumer directed PCA or caregiver under her consumer directed clients. This morning I confirmed with the department that only approximately 1.5 percent of the clients are served under an agency based model, so this would limit liability from any of our consumer directed beneficiaries and their agencies. 4:39:13 PM CHAIR SEATON asked for more explanation. MS. HALTERMAN explained there are two different models, such as an agency based model that typically requires that the agency staff the beneficiary's care in that home, and sends someone, typically a CNA, to the home to provide that care. The agency has some direct responsibility over directing the care when it is an agency based caregiver. When it is a consumer directed PCA model, the consumer directly hires, supervises, and fires their caregivers, they provide the training, and they are responsible for the oversight of their care. These systems place that responsibility more directly on the consumer and its caregivers, rather than the agency, she said. 4:40:16 PM MS. HALTERMAN continued reading her written testimony as follows: Statewide vendor solutions can also be set to trigger an alert so that they can be sent to the provider agency in order for that agency to investigate a gap in care. These can be set to set an alert to an administrator within the state agency, but only if the state chooses that option. EVV systems can monitor to ensure visits are happening as expected and/or alert that provider agency when a gap in care is occurring. The reports and these alerts are optional for the Department of Health and Social Services. Provider agencies maintain all control over scheduling and resolving any gaps in care with that direct caregiver. Generally, vendors provide training and the use of the EVV systems to administrative staff within those agencies, who then provide training to the direct caregiver. EVV systems statewide allow for con ... configuration of new software so EVV systems can incorporate programs specific business rules for each of our agencies. They ensure for comprehensive training to be consistently provided, which may include providing a training kit, visual aids, videos, or documentation on best practices. EVV systems can generate reports that alert agencies when the caregiver fails to show up. EVV systems can be integrated, again with the existing provider systems, to minimize the impact on those provider agencies. A standards based approach, which we've heard some folks testify and some ... we've seen some written testimony in support of. Um, I want to kind of define the standards based approach. It is an approach where the department sets the minimum set of requirements that the provider must meet with the use of an EVV system. The provider then needs to ensure that those requirements ... um, occur with the solution that they provide ... or they procure on their own. Standards based approaches are unfunded mandates. States have chosen those options but those that have done so have experienced that they have little control and oversight over their data. The standards approach may lead to increased reimbursement due to the cost and complications of implementing new systems for each provider. For instance, the State of Washington we have learned has increased reimbursement to providers due to the implementation of a standards based recordkeeping system or timekeeping system. It's not technically a fully ... fully functioning EVV system. It has no oversight or management of claims integration. 4:43:15 PM MS. HALTERMAN continued reading her written testimony as follows: Standards based EVV systems do not necessarily lead to the savings that are found in the vendor based solutions because the provider still maintains control and check the validity of all of the data that is sent to the state. There is no data sent to the state independently and; therefore, no independence of any EVV data. Standards based solutions may become too costly for some of our smaller providers. They may become far too complicated for smaller providers to implement. Even our PCA Association has pointed this fact out. Our fear is that if we implement a standards based solution this could cause some of our small providers in Alaska to close their doors and impede competition due to an unfunded mandate of the development of new systems. Standards based EVV systems can significantly slow implementation because if the state allows for integration of standards based EVV solutions into existing business practices it may take a lot longer to finish full implementation. Standards based EVV approaches can be challenging for some of our providers, it can be complicated for those providers. They may delay the full implementation or cause non-compliance for provider agencies that can't fully implement. They may reduce the savings generated, again due to the lack of oversight and control. This is still essentially a (indisc.) model with no upfront fraud prevention. Standards based solutions place the burden of verifying or certifying systems within the State of Alaska on the department in order to assure that strong technical controls are placed and maintained. Requiring the state to make exceptions to address the needs of remote or small providers as has been suggested by some, may force a vendor solution in part to be considered along with a standards based solution because otherwise small providers may be forced to close their doors. 4:45:34 PM MS. HALTERMAN continued reading her written testimony as follows: So, I want to talk a little bit about what EVV systems do. EVV systems can do the following: they can reduce inappropriate billing for home health and personal care attendant services; they can improve efficiencies; reduce paid work for both the agencies and the State of Alaska's Medicaid Agency. They can improve quality by ensuring services are provided for the most vulnerable of our populations. They may assist agencies and providers in helping to identify unmet needs or missed or late appointments when caregivers don't show. They may improve the ability to make adjustments to care quickly by triggering an alert to an agency who then knows the caregiver didn't show up, they can initiate a backup plan. They can improve policy decisions and improve strategies due to the ... having access to the encounter data that the state has never had before. It can improve data collection, evaluation, and also provide a unified view of each home and community based and PCA service that will allow care to be examined across multiple agencies and possibly multiple provider types. This will improve the quality of services for those beneficiaries. EVV systems can afford a more effective invoice, billing, scheduling, and documentation of the service delivery process and they can lead to enhanced administrative processes for those agencies. EVV systems capture and electronically submit claims data with accurate dates from visits that are verified which allows the state to validate that the data is coming from an independent source. EVV systems can ease reporting by providing a central location that identifies the support and services that those providers are rendering. EVV systems can generate exception reports that can be run ad hoc ... um, and they can reduce adult protective service issues and the need for investigations. These reports may help DHSS identify concerns earlier than they have been able to do so in the past. So, the benefits of EVV include the potential to eliminate the padding of timesheets by caregivers, it allows for a flag to the supervisors, the agencies ... um, to alert to suspected abuse or neglect. It can reduce errors, it can save money for agencies and for the State of Alaska. If plugged into the claims system it can speed up payments if implemented with that claims system. It can ensure compliance with state and federal regulations. It can improve quality assurance and streamline processes including payroll for many of our agencies. They can improve efficiencies and effectiveness. And, lastly save money on audits because the proof of care will be automated. I have in our research, Rep. Vazquez and I have discovered... 4:49:10 PM REPRESENTATIVE VAZQUEZ interjected that she wanted to place certain relative experiences on the record and offered her extensive Medicaid fraud background. She related that many states have been using electronic visit verification (EVV) systems for years, if not decades. As a prosecutor she attended numerous national conferences on Medicaid fraud and has seen demonstrations on how these systems work. Currently, there is evidence that these systems can save states money by reducing fraud, waste, and abuse, and add to the quality of care that the most vulnerable of Alaska's population needs. Recent research indicates that Congress has gotten onto this idea, and in 2015, Representative Steven Guthrie introduced HR 2446, which would require these types of systems for every state offering Medicaid, which is now all 50 states, and stipulates that states that do not implement the system will be subject a decrease of Federal Medical Assistance Percentage (FMAP), the federal share. The most recent action on this bill was November 4, 2015, when the bill was forwarded to the subcommittee on Health to the full Energy and Commerce Committee. In 2015, on the House of Representatives side of Congress, Senator Charles "Chuck" Grassley introduced SB 2416, which also would require EVV systems in Medicaid and in addition Medicare. The bill stipulates that states that do not implement will be subject to a decreased federal share in Medicaid, or FMAP. She explained that it's always difficult, as a prosecutor who also dealt with civil cases, to chase after Medicaid providers after the fact because it very difficult once the horse has left the barn to recover money. In 2015, there was a PCA agency owner and it was alleged that $1.2 million were billed inappropriately to the Medicaid program. Restitution was ordered by the judge at judgement but recovering $1.2 million posed a difficult challenge for the state. This bill in essence would try to catch the fraud, waste, and abuse, upfront before the horse leaves the barn and it also adds to the quality of care for individuals, she explained. 4:53:32 PM MS. HALTERMAN added that their research identified a number of vendors that provide this service. Sandata is the vendor the sponsor's office has been working with to crunch numbers that used some data from Kaiser Family Foundation from 2012. She pointed out that Sandata would like to analyze more current data and the department has been speaking with this vendor and they had a meeting to share insights about these systems, and answer questions. There are a number of vendors such as, First Data, Vilify Health, Access, Technology Solutions, and Care Watch are all EVV vendors. She explained that it has been made clear to Sandata that no guarantee were offered to Sandata in the RFP process. She said that unfortunately, of the 130 fraud cases that have been investigated by Alaska's Medicaid Fraud Control Unit, 120 of them are directly related to the populations that would be targeted with this bill. MS. HALTERMAN referred to Sandata's Brian Lawson's previous testimony and said he is willing to make himself available for anyone with further questions to explain the benefits of analyzing real data and the return on investment found from an effective implementation of an EVV system. Although, Sandata was not their only research tool, it helped develop the pricing and return on investment forecast is collected from the Kaiser Family Foundation, its 2012 data. It has been noted that the enrollment in populations in the Medicaid expenditures are down, but only PCA data was presented. Ms. Halterman continued reading her written testimony as follows: While the return on investment that was generated by Sandata includes not just PCA, it identifies potential savings for home and community based waiver. Now, in the targets that they presented on that return and investment because it was not using actual Medicaid data. They would need to have access to true data, real data, from the department, enrollments numbers and spending outcomes in order to present a more valid forecast of what these savings could be. So now the current data does show that the beneficiaries and spending are down slightly for these populations that would be targeted with this bill. It is clear that the proper implementation of an EVV system would provide a significant return on investment regardless of what the numbers are, regardless of how much is spent. The 5 percent return on investment was based on the PCA and home and community based population savings that use an EVV system. And the total of those expenditures was approximately $305 million, the numbers again used for the analysis was sample data and it used fail information that the vendor identified from a source that was valid but wasn't a reliable ... necessarily a 100 percent reliable source. If the department is willing to provide more reliable data, the vendor is willing to analyze current real data to come up with a realistic return on investment. It should be noted that while Sandata did present a return on investment that used 5 percent, 8 percent, and 12 percent returns, Medicaid Fraud Control unit has alerted us that those are conservative estimates because they have presented that fraud has conservatively reached approximately 20 percent with those populations. So sadly, in light of the testimony last year in Senate Finance and House Finance it is clear that Alaska has a fraud problem. Several documents... 4:59:54 PM REPRESENTATIVE SEATON interrupted and pointed out that the committee actually wanted a summary of changes. Before each member is HB 315, with a proposal to take up a committee substitute which is different, he said. The committee wanted a summary of those changes which he opined that one requires that a standards based model be used, and Version E is that the department shall contract with the vendor to implement an electronic visit verification (EVV) system. Also, he said it required real time reporting, to the extent feasible. He asked whether the committee has questions on considering the vendor model versus the standard based model in the original bill. 5:01:25 PM REPRESENTATIVE TARR advised she does not have Version E. The committee took an at-ease from 5:01 p.m. to 5:05 p.m. 5:05:23 PM REPRESENTATIVE WOOL noted that the committee heard from the vendors during the last committee meeting and asked whether the committee has heard from the department. 5:06:29 PM DEB ETHERIDGE, Deputy Director, Division of Senior and Disabilities Services, Department of Health and Social Services, said she is available. REPRESENTATIVE SEATON asked Ms. Etheridge to discuss fiscal note wherein it lists $224,000 each year for the next five years; however, in the analysis, he paraphrased the following: "Three states passed legislation to implement an EVV program and two are fully implemented but that they reported there was high cost of however reported initial cost for implementation of $13 million." He remarked that he is trying to relate that although they have a larger population, but it reads that "a timeline for implementation be 24 months." He pointed out that this fiscal note relates to Version A. 5:07:47 PM REPRESENTATIVE VAZQUEZ offered a correction that the fiscal note before the committee, OMB Component Number 2663, states that the total cost is $224,200, and it would be 50 percent federal match so the general fund match would be $112,100. REPRESENTATIVE SEATON offered that it is a recurring cost and he is trying to determine how that corresponds to the narrative, and he paraphrased the following, "that said in several places that the impacts were substantial. 5:08:55 PM MS. ETHERIDGE responded that the fiscal note before the committee is a fiscal note to the administrative component, and it captures the department's personnel costs for implementation and ongoing compliance and oversight of the electronic visit verification (EVV) system. The fiscal note was developed on the original version and not on Version E. The other estimated cost that the department struggled to develop would have impacted the Senior and Disability Services Medicaid component and at this time there is not an indeterminate Medicaid component note. However, the division did note in the narrative on its administrative fiscal note that there would be expenditures impacting its Medicaid budget, and it gave some logic about what the division anticipates or why it had difficulty anticipating the cost associated with how it would impact Medicaid. REPRESENTATIVE SEATON surmised that was looking at one GGU Health Program Manager II positions in Anchorage, and it is the main portion of the fiscal note. MS. ETHERIDGE agreed that it is the main portion of the administrative fiscal note. REPRESENTATIVE SEATON asked whether Ms. Etheridge had had a chance to look at the vendor portion and generate a fiscal note. MS. ETHERIDGE stated that she had an opportunity today to learn more about the intention of the implementation of the EVV system and she has a better understanding of what the obligations may be and she is preparing a fiscal note. REPRESENTATIVE SEATON added that he just wanted to clarify that because there is a single fiscal note there, but that's if the department would do it and not through the vendor model which is Version E. 5:11:38 PM REPRESENTATIVE TARR offered that due to the recent changes to the PCA program, and also the major Medicaid reform package that is moving through the legislature, her concern is that this is potentially too many things at once. MS. ETHERIDGE related that the department does, and the Division of Senior and Disability Services has a number of initiatives in which it is working on currently through Medicaid reform, through its CMS compliance necessary for the home community based services. Which includes the initiatives the department has taken to streamline and have more oversight over its personal care program. She noted that is part of the reason the department would require additional staff to implement this program, and the department anticipates it will take 24 months, at least. REPRESENTATIVE TARR surmised that the changes that affected the amount of time each recipient is receiving, in part to address the issue of potential fraud or misuse of the time. She opined that in this particular instance, some of the potential problems may have been addressed through that process. MS. ETHERIDGE answered that the division has made some changes to account for time for task, and it allocates time and then the recipient receives a time that is authorized weekly. The division feels like it has oversight and a more clear understanding of the services it has been authorizing; however, it understands the benefits of an EVV system as it has explored implementing that system. There are some examples of rounding that may happen that it may capture if it was to be directly tied into the division's enterprise system so that claims were tied into the system so there could be some efficiencies in that way. She advised that it is difficult for the division to say what percent of fraud would be realized at this time, but she has talked to other states and is trying to get a handle on it. 5:14:24 PM REPRESENTATIVE SEATON reminded the committee that the motion to adopt Version E, a vendor system, is still on the table. 5:14:33 PM REPRESENTATIVE STUTES removed her objection to adopt CSHB 315, Version 29-LS1287\E, Glover, 3/21/16, as the working document. There being no objection, Version E was before the committee. CHAIR SEATON asked Ms. Etheridge to round out some numbers for Version E. MS. ETHERIDGE agreed. [HB 315 was held over.]