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Second Substitute H.B. 77

Representative David Clark proposes the following substitute bill:


             1     
MEDICAL ASSISTANCE ACCOUNTABILITY

             2     
2011 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: David Clark

             5     
Senate Sponsor: Wayne L. Niederhauser

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill amends provisions of the Utah Health Code relating to management and
             10      oversight of the state's Medicaid and medical assistance programs.
             11      Highlighted Provisions:
             12          This bill:
             13          .    defines terms;
             14          .    provides that an inspector general of Medicaid services or the director of the Office
             15      of Internal Audit and Program Integrity shall designate and oversee the presiding
             16      officer in certain administrative appeal proceedings relating to Medicaid funds or
             17      services;
             18          .    describes other requirements relating to certain Medicaid related administrative
             19      appeal proceedings;
             20          .    describes duties and reporting requirements for the division relating to management
             21      and oversight of the state's Medicaid and medical assistance programs;
             22          .    places the Utah Office of Internal Audit and Program Integrity directly under the
             23      executive director of the Department of Health; and
             24          .    provides the Utah Office of Internal Audit and Program Integrity with full access to
             25      the records of the Division of Health Care Financing.


             26      Money Appropriated in this Bill:
             27          None
             28      Other Special Clauses:
             29          This bill takes effect on July 1, 2011.
             30      Utah Code Sections Affected:
             31      ENACTS:
             32          26-18-601, Utah Code Annotated 1953
             33          26-18-602, Utah Code Annotated 1953
             34          26-18-603, Utah Code Annotated 1953
             35          26-18-604, Utah Code Annotated 1953
             36          26-18-605, Utah Code Annotated 1953
             37     
             38      Be it enacted by the Legislature of the state of Utah:
             39          Section 1. Section 26-18-601 is enacted to read:
             40     
Part 6. MEDICAL ASSISTANCE ACCOUNTABILITY

             41          26-18-601. Title.
             42          This part is known as "Medical Assistance Accountability."
             43          Section 2. Section 26-18-602 is enacted to read:
             44          26-18-602. Definitions.
             45          As used in this part:
             46          (1) "Abuse" means:
             47          (a) an action or practice that:
             48          (i) is inconsistent with sound fiscal, business, or medical practices; and
             49          (ii) results, or may result, in unnecessary Medicaid related costs or other medical or
             50      hospital assistance costs; or
             51          (b) reckless or negligent upcoding.
             52          (2) "Auditor's Office" means the Office of Internal Audit and Program Integrity, within
             53      the department.
             54          (3) "Fraud" means intentional or knowing:
             55          (a) deception, misrepresentation, or upcoding in relation to Medicaid funds, costs,
             56      claims, reimbursement, or practice; or


             57          (b) deception or misrepresentation in relation to medical or hospital assistance funds,
             58      costs, claims, reimbursement, or practice.
             59          (4) "Medical or hospital assistance" is as defined in Section 26-18-2 .
             60          (5) "Upcoding" means assigning an inaccurate billing code for a service that is payable
             61      or reimbursable by Medicaid funds, if the correct billing code for the service would result in a
             62      lower Medicaid payment or reimbursement.
             63          (6) "Waste" means overutilization of resources or inappropriate payment.
             64          Section 3. Section 26-18-603 is enacted to read:
             65          26-18-603. Adjudicative proceedings related to Medicaid funds.
             66          (1) If a proceeding of the department, under Title 63G, Chapter 4, Administrative
             67      Procedures Act, relates in any way to recovery of Medicaid funds:
             68          (a) the presiding officer shall be designated by and report directly to the executive
             69      director of the department or the director of the Office of Internal Audit and Program Integrity;
             70      and
             71          (b) the decision of the presiding officer is the recommended decision to the executive
             72      director of the department or a designee of the executive director who is not in the division.
             73          (2) Subsection (1) does not apply to hearings conducted by the Department of
             74      Workforce Services relating to medical assistance eligibility determinations.
             75          (3) If a proceeding of the department, under Title 63G, Chapter 4, Administrative
             76      Procedures Act, relates in any way to Medicaid or Medicaid funds, the following may attend
             77      and present evidence or testimony at the proceeding:
             78          (a) the director of the Office of Internal Audit and Program Integrity, or the director's
             79      designee; and
             80          (b) the inspector general of Medicaid services, if an Office of Inspector General of
             81      Medicaid Services is created by statute, or the inspector general's designee.
             82          (4) In relation to a proceeding of the department under Title 63G, Chapter 4,
             83      Administrative Procedures Act, a person may not, outside of the actual proceeding, attempt to
             84      influence the decision of the presiding officer.
             85          Section 4. Section 26-18-604 is enacted to read:
             86          26-18-604. Division duties -- Reporting.
             87          (1) The division shall:


             88          (a) develop and implement procedures relating to Medicaid funds and medical or
             89      hospital assistance funds to ensure that providers do not receive:
             90          (i) duplicate payments for the same goods or services;
             91          (ii) payment for goods or services by resubmitting a claim for which:
             92          (A) payment has been disallowed on the grounds that payment would be a violation of
             93      federal or state law, administrative rule, or the state plan; and
             94          (B) the decision to disallow the payment has become final;
             95          (iii) payment for goods or services provided after a recipient's death, including payment
             96      for pharmaceuticals or long-term care; or
             97          (iv) payment for transporting an unborn infant;
             98          (b) consult with the Centers for Medicaid and Medicare Services, other states, and the
             99      Office of Inspector General for Medicaid Services, if one is created by statute, to determine and
             100      implement best practices for discovering and eliminating fraud, waste, and abuse of Medicaid
             101      funds and medical or hospital assistance funds;
             102          (c) actively seek repayment from providers for improperly used or paid:
             103          (i) Medicaid funds; and
             104          (ii) medical or hospital assistance funds;
             105          (d) coordinate, track, and keep records of all division efforts to obtain repayment of the
             106      funds described in Subsection (1)(c), and the results of those efforts;
             107          (e) keep Medicaid pharmaceutical costs as low as possible by actively seeking to obtain
             108      pharmaceuticals at the lowest price possible, including, on a quarterly basis for the
             109      pharmaceuticals that represent the highest 45% of state Medicaid expenditures for
             110      pharmaceuticals and on an annual basis for the remaining pharmaceuticals:
             111          (i) tracking changes in the price of pharmaceuticals;
             112          (ii) checking the availability and price of generic drugs;
             113          (iii) reviewing and updating the state's maximum allowable cost list; and
             114          (iv) comparing pharmaceutical costs of the state Medicaid program to available
             115      pharmacy price lists; and
             116          (f) provide training, on an annual basis, to the employees of the division who make
             117      decisions on billing codes, or who are in the best position to observe and identify upcoding, in
             118      order to avoid and detect upcoding.


             119          (2) At the October 2011 interim meeting of the Health and Human Services Interim
             120      Committee, the division shall report on the measures taken by the division to correct the
             121      problems identified in, and to implement the recommendations made in, the December 2010
             122      Performance Audit of Utah Medicaid Provider Cost Control published by the Office of
             123      Legislative Auditor General.
             124          (3) Beginning in 2012, the division shall annually, before September 1, report to and
             125      provide the Health and Human Services Interim Committee with information, including
             126      statistical information, for the preceding fiscal year, regarding:
             127          (a) incidents of improperly used or paid Medicaid funds and medical or hospital
             128      assistance funds;
             129          (b) division efforts to obtain repayment from providers of the funds described in
             130      Subsection (3)(a);
             131          (c) all repayments made of funds described in Subsection (3)(a), including the total
             132      amount recovered; and
             133          (d) the division's compliance with the recommendations made in the December 2010
             134      Performance Audit of Utah Medicaid Provider Cost Control published by the Office of
             135      Legislative Auditor General.
             136          Section 5. Section 26-18-605 is enacted to read:
             137          26-18-605. Utah Office of Internal Audit and Program Integrity.
             138          The Utah Office of Internal Audit and Program integrity:
             139          (1) may not be placed within the division;
             140          (2) shall be placed directly under, and report directly to, the executive director of the
             141      Department of Health; and
             142          (3) shall have full access to all records of the division.
             143          Section 6. Effective date.
             144          This bill takes effect on July 1, 2011.


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