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Second Substitute H.B. 397

This document includes House Floor Amendments incorporated into the bill on Fri, Mar 5, 2010 at 4:14 PM by lerror. --> This document includes Senate 3rd Reading Floor Amendments incorporated into the bill on Tue, Mar 9, 2010 at 10:28 AM by lwells. -->

Representative John Dougall proposes the following substitute bill:


             1     
MEDICAID PROGRAM AMENDMENTS

             2     
2010 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: John Dougall

             5     
Senate Sponsor: Daniel R. Liljenquist

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill amends Medicaid provisions of the Utah Code.
             10      Highlighted Provisions:
             11          This bill:
             12          .    requires the Department of Health to conduct a certain level of internal audits of the
             13      Medicaid program;
             14          .    requires the Department of Health to study and report:
             15              .    direct contracting for primary care services; and
             16              .    the feasibility of establishing a medical homes model;
             16a           H. .    requires the Department of Human Services to report to the Legislature when
             16b      changes to the state Medicaid plan, or a Medicaid waiver effect the care of children and youth
             16c      in custody of the Division of Child and Family Services or the Division of Juvenile Justice
             16d      Services; .H
             17          .    allows the Department of Health to apply for and, if approved, implement a
             18      program for health opportunity accounts;
             19          .    requires certain funds to be deposited in the Medicaid Restricted Account; and
             20          .    expands the use of the Nursing Care Facilities Account, which was established to
             21      assist nursing care facilities providing services under the Medicaid program.
             22      Monies Appropriated in this Bill:
             23          None
             24      Other Special Clauses:
             25          None


             26      Utah Code Sections Affected:
             27      AMENDS:
             28          26-18-3, as last amended by Laws of Utah 2008, Chapters 62 and 382
             29          26-18-402, as last amended by Laws of Utah 2009, Chapters 13 and 199
             30          26-35a-106, as last amended by Laws of Utah 2008, Chapter 382
             31      RENUMBERS AND AMENDS:
             32          26-10-101, (Renumbered from 26-18-301, as last amended by Laws of Utah 2008,
             33      Chapter 159)
             34          26-10-102, (Renumbered from 26-18-302, as last amended by Laws of Utah 2008,
             35      Chapter 159)
             36          26-10-103, (Renumbered from 26-18-303, as enacted by Laws of Utah 1993, Chapter
             37      255)
             38          26-10-104, (Renumbered from 26-18-304, as last amended by Laws of Utah 2008,
             39      Chapters 159 and 382)
             40          26-10-105, (Renumbered from 26-18-305, as last amended by Laws of Utah 2006,
             41      Chapter 116)
             42     
             43      Be it enacted by the Legislature of the state of Utah:
             44          Section 1. Section 26-10-101 , which is renumbered from Section 26-18-301 is
             45      renumbered and amended to read:
             46           [26-18-301].     26-10-101. Definitions.
             47          As used in this part:
             48          (1) "Community based organization":
             49          (a) means a private entity; and
             50          (b) includes for profit and not for profit entities.
             51          (2) "Cultural competence" means a set of congruent behaviors, attitudes, and policies
             52      that come together in a system, agency, or profession and enables that system, agency, or
             53      profession to work effectively in cross-cultural situations.
             54          (3) "Health literacy" means the degree to which an individual has the capacity to
             55      obtain, process, and understand health information and services needed to make appropriate
             56      health decisions.


             57          (4) "Institutional capacity" means the ability of a community based organization to
             58      implement public and private contracts.
             59          (5) "Medically underserved population" means the population of an urban or rural area
             60      or a population group designated by the department as having a shortage of primary health care
             61      services.
             62          (6) "Primary health care" means:
             63          (a) basic and general health care services given when a person seeks assistance to
             64      screen for or to prevent illness and disease, or for simple and common illnesses and injuries;
             65      and
             66          (b) care given for the management of chronic diseases.
             67          (7) "Primary health care services" include[, but are not limited to]:
             68          (a) services of physicians, nurses, physician's assistants, and dentists licensed to
             69      practice in this state under Title 58, Occupations and Professions;
             70          (b) diagnostic and radiologic services;
             71          (c) preventive health services including, [but not limited to,] perinatal services,
             72      well-child services, and other services that seek to prevent disease or its consequences;
             73          (d) emergency medical services;
             74          (e) preventive dental services; and
             75          (f) pharmaceutical services.
             76          Section 2. Section 26-10-102 , which is renumbered from Section 26-18-302 is
             77      renumbered and amended to read:
             78           [26-18-302].     26-10-102. Department to award grants and contracts --
             79      Applications.
             80          (1) (a) Within appropriations specified by the Legislature for this purpose, the
             81      department may make grants to public and nonprofit entities for the cost of operation of
             82      providing primary health care services to medically underserved populations.
             83          (b) The department may, as funding permits, contract with community based
             84      organizations for the purpose of developing culturally and linguistically appropriate programs
             85      and services for low income and medically underserved populations through a pilot program to
             86      accomplish one or more of the following:
             87          (i) to educate individuals:


             88          (A) to use private and public health care coverage programs, products, services, and
             89      resources in a timely, effective, and responsible manner;
             90          (B) to make prudent use of private and public health care resources;
             91          (C) to pursue preventive health care, health screenings, and disease management; and
             92          (D) to locate health care programs and services;
             93          (ii) to assist individuals to develop:
             94          (A) personal health management;
             95          (B) self-sufficiency in daily care; and
             96          (C) life and disease management skills;
             97          (iii) to support translation of health materials and information;
             98          (iv) to facilitate an individual's access to primary care services and providers, including
             99      mental health services; and
             100          (v) to measure and report empirical results of the pilot project.
             101          (2) (a) Grants by the department shall be awarded based on:
             102          (i) applications submitted to the department in the manner and form prescribed by the
             103      department; and
             104          (ii) the criteria established in Section [ 26-18-303 ] 26-10-103 .
             105          (b) The application for a grant under Subsection (2)(a) shall contain:
             106          (i) a requested award amount;
             107          (ii) a budget; and
             108          (iii) a narrative plan of the manner in which the applicant intends to provide the
             109      primary health care services described in Subsection [ 26-18-301 ] 26-10-101 (7).
             110          (c) A contract bid for a service under Subsection (1)(b):
             111          (i) shall be awarded in accordance with Title 63G, Chapter 6, Utah Procurement Code;
             112          (ii) must include the information described in Section [ 26-18-303 ] 26-10-103 ; and
             113          (iii) is subject to Subsection (3) of this section.
             114          (3) (a) An applicant under this chapter must demonstrate to the department that the
             115      applicant will not deny services to a person because of the person's inability to pay for the
             116      services.
             117          (b) Subsection (3)(a) does not preclude an applicant from seeking payment from the
             118      person receiving services, a third party, or a government agency if:


             119          (i) the applicant is authorized to charge for the services; and
             120          (ii) the person, third party, or government agency is under legal obligation to pay the
             121      charges.
             122          (4) The department shall maximize the use of federal matching funds received for
             123      services under Subsection (1)(b) to fund additional contracts under Subsection (1)(b).
             124          Section 3. Section 26-10-103 , which is renumbered from Section 26-18-303 is
             125      renumbered and amended to read:
             126           [26-18-303].     26-10-103. Content of applications.
             127          Applications for grants under this chapter shall include:
             128          (1) a statement of specific, measurable objectives, and the methods to be used to assess
             129      the achievement of those objectives;
             130          (2) the precise boundaries of the area to be served by the entity making the application,
             131      including a description of the medically underserved population to be served by the grant;
             132          (3) the results of an assessment of need demonstrating that the population to be served
             133      has a need for the services provided by the applicant;
             134          (4) a description of the personnel responsible for carrying out the activities of the grant
             135      along with a statement justifying the use of any grant funds for the personnel;
             136          (5) letters and other forms of evidence showing that efforts have been made to secure
             137      financial and professional assistance and support for the services to be provided under the
             138      grant;
             139          (6) a list of services to be provided by the applicant;
             140          (7) the schedule of fees to be charged by the applicant;
             141          (8) the estimated number of medically underserved persons to be served with the grant
             142      award; and
             143          (9) other provisions as determined by the department.
             144          Section 4. Section 26-10-104 , which is renumbered from Section 26-18-304 is
             145      renumbered and amended to read:
             146           [26-18-304].     26-10-104. Process and criteria for awarding grants and
             147      contracts.
             148          (1) The department shall establish rules in accordance with Title 63G, Chapter 3, Utah
             149      Administrative Rulemaking Act, governing the application form, process, and criteria it will


             150      use in awarding grants and contracts under this chapter.
             151          (2) When awarding a primary care grant under Subsection [ 26-18-302 ]
             152      26-10-102 (1)(a), the department shall consider the extent to which the applicant:
             153          (a) demonstrates that the area or a population group to be served under the application
             154      has a shortage of primary health care and that the services will be located so that they will
             155      provide assistance to the greatest number of persons residing in the area or included in the
             156      population group;
             157          (b) utilizes other sources of funding, including private funding, to provide primary
             158      health care;
             159          (c) demonstrates the ability and expertise to serve traditionally medically underserved
             160      populations including persons of limited English-speaking ability, single heads of households,
             161      the elderly, persons with low incomes, and persons with chronic diseases;
             162          (d) demonstrates that it will assume financial risk for a specified number of medically
             163      underserved persons within its catchment area for a predetermined level of care on a prepaid
             164      capitation basis; and
             165          (e) meets other criteria determined by the department.
             166          (3) When awarding a contract for community based services under Subsection
             167      [ 26-18-302 ] 26-10-102 (1)(b), the department shall:
             168          (a) consider the extent to which the applicant:
             169          (i) demonstrates that the area or a population group to be served under the application
             170      is a medically underserved area or population and that the services will be located so that they
             171      will provide assistance to the greatest number of persons residing in the area or included in the
             172      population group;
             173          (ii) utilizes other sources of funding, including private funding, to provide the services
             174      described in Subsection [ 26-18-302 ] 26-10-102 (1)(b);
             175          (iii) demonstrates the ability and expertise to serve traditionally medically underserved
             176      populations including persons of limited English-speaking ability, single heads of households,
             177      the elderly, persons with low incomes, and persons with chronic diseases;
             178          (iv) meets other criteria determined by the department; and
             179          (v) demonstrates the ability to empirically measure and report the results of all contract
             180      supported activities;


             181          (b) consider the extent to which the contract increases the applicant's institutional
             182      capacity;
             183          (c) consult with the state's:
             184          (i) Medicaid program;
             185          (ii) Children's Health Insurance Program; and
             186          (iii) other assistance programs within the Department of Workforce Services and the
             187      Department of Human Services; and
             188          (d) as funding permits, implement the community based service contract as a pilot
             189      program for which the department shall enter into contracts for services as follows:
             190          (i) two contracts in the amount of $50,000 each to be awarded to experienced and
             191      established applicants; and
             192          (ii) three contracts in the amount of $30,000 each to be awarded to applicants that:
             193          (A) are not as established or experienced as the applicants under Subsection (3)(d)(i);
             194      or
             195          (B) represent smaller community based approaches than the applicants described in
             196      Subsection (3)(d)(i).
             197          (4) Once a contract has been awarded under Subsection (3), the department shall
             198      provide technical assistance to the contractee to familiarize the contractee with public and
             199      private resources available to support wellness, health promotion, and disease management.
             200          Section 5. Section 26-10-105 , which is renumbered from Section 26-18-305 is
             201      renumbered and amended to read:
             202           [26-18-305].     26-10-105. Report on implementation.
             203          The department shall report to the Health and Human Services Interim Committee by
             204      November 1, 1994, and every year thereafter on the implementation of the grant program for
             205      primary care services. The report shall include a description of the scope and level of coverage
             206      provided to low-income persons by primary care grant programs.
             207          Section 6. Section 26-18-3 is amended to read:
             208           26-18-3. Administration of Medicaid program by department -- Reporting to the
             209      Legislature -- Disciplinary measures and sanctions -- Funds collected -- Eligibility
             210      standards -- Internal audits -- Studies -- Health opportunity accounts.
             211          (1) The department shall be the single state agency responsible for the administration


             212      of the Medicaid program in connection with the United States Department of Health and
             213      Human Services pursuant to Title XIX of the Social Security Act.
             214          (2) (a) The department shall implement the Medicaid program through administrative
             215      rules in conformity with this chapter, Title 63G, Chapter 3, Utah Administrative Rulemaking
             216      Act, the requirements of Title XIX, and applicable federal regulations.
             217          (b) The rules adopted under Subsection (2)(a) shall include, in addition to other rules
             218      necessary to implement the program:
             219          (i) the standards used by the department for determining eligibility for Medicaid
             220      services;
             221          (ii) the services and benefits to be covered by the Medicaid program; and
             222          (iii) reimbursement methodologies for providers under the Medicaid program.
             223          (3) (a) The department shall, in accordance with Subsection (3)(b), report to either the
             224      Legislative Executive Appropriations Committee or the Legislative Health and Human
             225      Services Appropriations Subcommittee when the department:
             226          (i) implements a change in the Medicaid State Plan;
             227          (ii) initiates a new Medicaid waiver;
             228          (iii) initiates an amendment to an existing Medicaid waiver; or
             229          (iv) initiates a rate change that requires public notice under state or federal law.
             230          (b) The report required by Subsection (3)(a) shall:
             231          (i) be submitted to the Legislature's Executive Appropriations Committee or the
             232      legislative Health and Human Services Appropriations Subcommittee prior to the department
             233      implementing the proposed change; and
             234          (ii) shall include:
             235          (A) a description of the department's current practice or policy that the department is
             236      proposing to change;
             237          (B) an explanation of why the department is proposing the change;
             238          (C) the proposed change in services or reimbursement, including a description of the
             239      effect of the change;
             240          (D) the effect of an increase or decrease in services or benefits on individuals and
             241      families;
             242          (E) the degree to which any proposed cut may result in cost-shifting to more expensive


             243      services in health or human service programs; and
             244          (F) the fiscal impact of the proposed change, including:
             245          (I) the effect of the proposed change on current or future appropriations from the
             246      Legislature to the department;
             247          (II) the effect the proposed change may have on federal matching dollars received by
             248      the state Medicaid program;
             249          (III) any cost shifting or cost savings within the department's budget that may result
             250      from the proposed change; and
             251          (IV) identification of the funds that will be used for the proposed change, including any
             252      transfer of funds within the department's budget.
             252a           H. (4)(a) The Department of Human Services shall report to the Legislative Health
             252b      and Human Services Appropriations Subcommittee no later that December 31, S. [ 2012 ]
             252c      2010 .S in
             252c      accordance with Subsection (b).
             252d          (b) The report required by Subsection (a) shall include:
             252e          (i) changes made by the division or the department beginning July 1, 2010 that effect
             252f      the Medicaid program, a waiver under the Medicaid program, or an interpretation of
             252g      Medicaid services or funding, that relate to care for children and youth in the custody of the
             252h      Division of Child and Family Services or the Division of Juvenile Justice Services;
             252i          (ii) the history and impact of the changes under Subsection (b)(i);
             252j          (iii) the Department of Human Service's plans for addressing the impact of the changes
             252k      under Subsection (b)(i); and
             252l          (iv) ways to consolidate administrative functions within the Department of Human
             252m      Services, the Department of Health, the Division of Child and Family Services, and the
             252n      Division of Juvenile Justice Services to more efficiently meet the needs of children and youth
             252o      with mental health and substance disorder treatment needs.
             253           [ (4) ] 5 .H Any rules adopted by the department under Subsection (2) are subject to
             253a      review and
             254      reauthorization by the Legislature in accordance with Section 63G-3-502 .
             255           H. [ (5) ] 6 .H The department may, in its discretion, contract with the Department of
             255a      Human
             256      Services or other qualified agencies for services in connection with the administration of the
             257      Medicaid program, including:
             258          (a) the determination of the eligibility of individuals for the program;
             259          (b) recovery of overpayments; and


             260          (c) consistent with Section 26-20-13 , and to the extent permitted by law and quality
             261      control services, enforcement of fraud and abuse laws.
             262           H. [ (6) ] 7 .H The department shall provide, by rule, disciplinary measures and sanctions
             262a      for
             263      Medicaid providers who fail to comply with the rules and procedures of the program, provided
             264      that sanctions imposed administratively may not extend beyond:
             265          (a) termination from the program;
             266          (b) recovery of claim reimbursements incorrectly paid; and
             267          (c) those specified in Section 1919 of Title XIX of the federal Social Security Act.
             268           H. [ (7) ] 8 .H Funds collected as a result of a sanction imposed under Section 1919 of
             268a      Title XIX
             269      of the federal Social Security Act shall be deposited in the General Fund as nonlapsing
             270      dedicated credits to be used by the division in accordance with the requirements of Section
             271      1919 of Title XIX of the federal Social Security Act.
             272           H. [ (8) ] 9 .H (a) In determining whether an applicant or recipient is eligible for a service
             272a      or
             273      benefit under this part or Chapter 40, Utah Children's Health Insurance Act, the department


             274      shall, if Subsection (8)(b) is satisfied, exclude from consideration one passenger vehicle
             275      designated by the applicant or recipient.
             276          (b) Before Subsection (8)(a) may be applied:
             277          (i) the federal government must:
             278          (A) determine that Subsection (8)(a) may be implemented within the state's existing
             279      public assistance-related waivers as of January 1, 1999;
             280          (B) extend a waiver to the state permitting the implementation of Subsection (8)(a); or
             281          (C) determine that the state's waivers that permit dual eligibility determinations for
             282      cash assistance and Medicaid are no longer valid; and
             283          (ii) the department must determine that Subsection H. [ (8) ] 9 .H (a) can be implemented
             283a      within
             284      existing funding.
             285           H. [ (9) ] 10 .H (a) For purposes of this Subsection H. [ (9) ] 10 .H :
             286          (i) "aged, blind, or disabled" shall be defined by administrative rule; and
             287          (ii) "spend down" means an amount of income in excess of the allowable income
             288      standard that must be paid in cash to the department or incurred through the medical services
             289      not paid by Medicaid.
             290          (b) In determining whether an applicant or recipient who is aged, blind, or disabled is
             291      eligible for a service or benefit under this chapter, the department shall use 100% of the federal
             292      poverty level as:
             293          (i) the allowable income standard for eligibility for services or benefits; and
             294          (ii) the allowable income standard for eligibility as a result of spend down.
             295           H. [ (10) ] 11 .H The department shall conduct internal audits of the Medicaid program, in
             296      proportion to at least the level of funding it receives from Medicaid to conduct internal audits.
             297           H. [ (11) ] 12 .H In order to determine the feasibility of contracting for direct Medicaid
             297a      providers
             298      for primary care services, the department shall:
             299          (a) issue a request for information for direct contracting for primary services that shall
             300      provide that a provider shall exclusively serve all Medicaid clients:
             301          (i) in a geographic area;
             302          (ii) for a defined range of primary care services; and
             303          (iii) for a predetermined total contracted amount; and
             304          (b) by February 1, 2011, report to the Health and Human Services Appropriations


             305      Subcommittee on the response to the request for information under Subsection (11)(a).
             306           H. [ (12) ] 13 .H (a) By December 31, 2010, the department shall:
             307          (i) determine the feasibility of implementing a three year patient-centered medical
             308      home demonstration project in an area of the state using existing budget funds; and
             309          (ii) report the department's findings and recommendations under
             309a      Subsection H. [ (12) ] 13 .H (a)(i)
             310      to the Health and Human Services Appropriations Subcommittee.
             311          (b) If the department determines that the medical home demonstration project
             312      described in Subsection H. [ (12) ] 13 .H (a) is feasible, and the Health and Human Services
             312a      Appropriations
             313      Subcommittee recommends that the demonstration project be implemented, the department
             314      shall:
             315          (i) implement the demonstration project; and
             316          (ii) by December 1, 2012, make recommendations to the Health and Human Services
             317      Appropriations Subcommittee regarding the:
             318          (A) continuation of the demonstration project;
             319          (B) expansion of the demonstration project to other areas of the state; and
             320          (C) cost savings incurred by the implementation of the demonstration project.
             321           H. [ (13) ] 14 .H (a) The department may apply for and, if approved, implement a
             321a      demonstration
             322      program for health opportunity accounts, as provided for in 42 U.S.C. Sec. 1396u-8.
             323          (b) A health opportunity account established under Subsection H. [ (13) ] 14 .H (a) shall
             323a      be an
             324      alternative to the existing benefits received by an individual eligible to receive Medicaid under
             325      this chapter.
             326          (c) Subsection H. [ (13) ] 14 .H (a) is not intended to expand the coverage of the Medicaid
             326a      program.
             327          Section 7. Section 26-18-402 is amended to read:
             328           26-18-402. Medicaid Restricted Account.
             329          (1) There is created a restricted account in the General Fund known as the Medicaid
             330      Restricted Account.
             331          (2) (a) Except as provided in Subsection (3), the following shall be deposited into the
             332      Medicaid Restricted Account:
             333          (i) any general funds appropriated to the department for the state plan for medical
             334      assistance or for the Division of Health Care Financing that are not expended by the
             335      department in the fiscal year for which the general funds were appropriated and which are not



             336      otherwise designated as nonlapsing shall lapse into the Medicaid Restricted Account; [and]
             337          (ii) any unused state funds that are associated with the Medicaid program, as defined in
             338      Section 26-18-2 , from the Department of Workforce Services and the Department of Human
             339      Services; and
             340          [(ii)] (iii) any penalties imposed and collected under:
             341          (A) Section 17B-2a-818.5 ;
             342          (B) Section 19-1-206 ;
             343          (C) Section 79-2-404 ;
             344          (D) Section 63A-5-205 ;
             345          (E) Section 63C-9-403 ; or
             346          (F) Section 72-6-107.5 .
             347          (b) The account shall earn interest and all interest earned shall be deposited into the
             348      account.
             349          (c) The Legislature may appropriate monies in the restricted account to fund programs
             350      that expand medical assistance coverage and private health insurance plans to low income
             351      persons who have not traditionally been served by Medicaid, including the Utah Children's
             352      Health Insurance Program created in Chapter 40.
             353          (3) For fiscal years 2008-09, 2009-10, and 2010-11, the following funds are
             354      nonlapsing:
             355          (a) any general funds appropriated to the department for the state plan for medical
             356      assistance, or for the Division of Health Care Financing that are not expended by the
             357      department in the fiscal year in which the general funds were appropriated [are nonlapsing.];
             358      and
             359          (b) funds described in Subsection (2)(a)(ii).
             360          Section 8. Section 26-35a-106 is amended to read:
             361           26-35a-106. Restricted account -- Creation -- Deposits.
             362          (1) (a) There is created a restricted account in the General Fund known as the "Nursing
             363      Care Facilities Account" consisting of:
             364          (i) proceeds from the assessment imposed by Section 26-35a-104 which shall be
             365      deposited in the restricted account to be used for the purpose described in Subsection (1)(b);
             366          (ii) money appropriated or otherwise made available by the Legislature; and


             367          (iii) any interest earned on the account.
             368          (b) (i) Money in the account shall only be used:
             369          (A) to the extent authorized by federal law, to obtain federal financial participation in
             370      the Medicaid program; [and]
             371          (B) to provide the increased level of hospice reimbursement resulting from the nursing
             372      care facilities assessment imposed under Section 26-35a-104 ; and
             373          [(B)] (C) in the manner described in Subsection (1)(b)(ii).
             374          (ii) The money appropriated from the restricted account to the department:
             375          (A) shall be used only to increase the rates paid prior to the effective date of this act to
             376      nursing care facilities for providing services pursuant to the Medicaid program and for
             377      administrative expenses as described in Subsection (1)(b)(ii)(C);
             378          (B) may not be used to replace existing state expenditures paid to nursing care facilities
             379      for providing services pursuant to the Medicaid program, except for increased costs due to
             380      hospice reimbursement under Subsection (1)(b)(i)(B); and
             381          (C) may be used for administrative expenses [for implementation of this act], if the
             382      administrative expenses for the fiscal year do not exceed 3% of the money deposited into the
             383      restricted account during the fiscal year.
             384          (2) Money shall be appropriated from the restricted account to the department for the
             385      purposes described in Subsection (1)(b) in accordance with Title 63J, Chapter 1, Budgetary
             386      Procedures Act.


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