2012 -- H 7235

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LC00758

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

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H O U S E R E S O L U T I O N

RESPECTFULLY REQUESTING THE GOVERNOR OF THE STATE OF RHODE ISLAND

TO IMPLEMENT PROGRAMS AND METHODOLOGY TO IMPROVE MEDICAID

INTEGRITY IN THE STATE

     Introduced By: Representatives Serpa, Tarro, Mattiello, Silva, and Morgan

     Date Introduced: January 25, 2012

     Referred To: House Finance

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     WHEREAS, The federal government has estimated that fraud, waste, and abuse have cost

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state Medicaid programs around $18 billion dollars annually; and

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     WHEREAS, Implementation of modern fraud screening and prevention solutions to

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detect fraud and abuse prior to Medicaid claims being paid is essential in protecting taxpayer

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dollars; and

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     WHEREAS, In addition, federal law now requires states to improve program integrity for

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Medicaid and Children’s Health Insurance Programs by implementing waste, and fraud and

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abuse, prevention, detection, and recovery solutions; and

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     WHEREAS, Rhode Island’s Medicaid program is an Executive function administered by

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the state’s Department of Human Services in conjunction with the state’s Department of

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Administration and the Department of Health; now, therefore be it 

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     RESOLVED, That this House of Representatives of the State of Rhode Island and

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Providence Plantations hereby respectfully requests the Governor of the State of Rhode Island to

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implement waste, and fraud and abuse, detection, prevention, and recovery solutions to:

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     (1) Improve program integrity for Medicaid and the children’s health insurance program

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or “CHIP” in the state, and to create efficiency and cost savings through a shift from a

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retrospective “pay and chase” model to a prospective pre-payment model; and

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     (2) Comply with program integrity provisions of the federal patient protection and

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affordable care act and the health care and education reconciliation act of 2010, as promulgated in

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the centers for Medicare and Medicaid services final rule 6028; and be it further

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     RESOLVED, That the subsequent words and phrases used in this resolution will have the

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following meanings, unless the context clearly indicates otherwise:

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     (1) “CHIP” means the children’s health insurance program established under title XXI of

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the Social Security Act (42 U.S.C. 1397aa et seq.) and implemented in Rhode Island, including

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but not limited to, any plans and/or programs implemented pursuant to the provisions of chapter

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40-8.4 (“Health Care for Families”) in the Rhode Island General Laws;

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     (2) “Department” means the Rhode Island department of human services;

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     (3) “Enrollee” means an individual who is eligible to receive benefits and is enrolled in

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either the Medicaid or CHIP programs;

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     (4) “Medicaid” means the program to provide grants to states for medical assistance

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programs established under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.); and

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     (5) “Secretary” means the U.S. secretary of health and human services, acting through the

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administrator of the centers for Medicare and Medicaid Services; and be it further

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     RESOLVED, That programs and provisions referenced in this resolution include:

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     (1) The State Medicaid managed care programs, including programs operated under

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and/or pursuant to the provisions of title 40 (Human Services) of the Rhode Island General Laws;

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     (2) State Medicaid programs operated under and/or pursuant to the provisions of title 40

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(Human Services) of the Rhode Island General Laws;

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     (3) The state CHIP program operated under title 40 (Human Services) of the Rhode

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Island General Laws and implemented in Rhode Island, including, but not limited to, any plans

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and/or programs implemented pursuant to the provisions of chapter 40-8.4 (“Health Care for

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Families”) of the Rhode Island General Laws; and be it further

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     RESOLVED, That the department will implement provider data verification and provider

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screening technology solutions to check healthcare billing and provider rendering data against a

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continually maintained provider information database for the purposes of automating reviews and

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identifying and preventing inappropriate payments to:

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     (1) Deceased providers;

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     (2) Sanctioned providers;

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     (3) License expiration/retired providers; and

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     (4) Confirmed wrong addresses; and be it further

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     RESOLVED, The department will implement state-of-the-art clinical code editing

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technology solutions to further automate claims resolution and enhance cost containment through

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improved claim accuracy and appropriate code correction. The technology will identify and

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prevent errors or potential overbilling based on widely accepted and transparent protocols such as

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the American Medical Association and the Centers for Medicare and Medicaid Services. The

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edits will be applied automatically before claims are adjudicated to speed processing and reduce

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the number of pended or rejected claims and help ensure a smoother, more consistent and more

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transparent adjudication process and fewer delays in provider reimbursement; and be it further

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     RESOLVED, That the department will implement state-of-the-art predictive modeling

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and analytics technologies to provide a more comprehensive and accurate view across all

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providers, beneficiaries and geographies within the Medicaid and CHIP programs in order to:

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     (1) Identify and analyze those billing or utilization patterns that represent a high-risk of

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fraudulent activity;

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     (2) Be integrated into the existing Medicaid and CHIP claims workflow;

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     (3) Undertake and automate such analysis before payment is made to minimize

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disruptions to the workflow and speed claim resolution;

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     (4) Prioritize such identified transactions for additional review before payment is made

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based on likelihood of potential waste, fraud or abuse;

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     (5) Capture outcome information from adjudicated claims to allow for refinement and

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enhancement of the predictive analytics technologies based on historical data and algorithms

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within the system; and

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     (6) Prevent the payment of claims for reimbursement that have been identified as

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potentially wasteful, fraudulent, or abusive until the claims have been automatically verified as

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valid; and be it further

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     RESOLVED, That the department will implement fraud investigative services that

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combine retrospective claims analysis and prospective waste, fraud or abuse detection techniques.

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These services will include analysis of historical claims data, medical records, suspect provider

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databases and high-risk identification lists, as well as direct patient and provider interviews.

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Emphasis will be placed on providing education to providers and ensuring that they have the

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opportunity to review and correct any problems identified prior to adjudication; and be it further

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     RESOLVED, That the department will implement Medicaid and CHIP claims audit and

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recovery services to identify improper payments due to non-fraudulent issues, audit claims, obtain

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provider sign-off on the audit results and recover validated overpayments. Post payment reviews

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will ensure that the diagnoses and procedure codes are accurate and valid based on the supporting

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physician documentation within the medical records. 

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     The core categories of reviews will include:

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     (1) Coding compliance diagnosis related group (“DRG”) reviews;

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     (2) Transfers;

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     (3) Readmissions;

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     (4) Cost outlier reviews;

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     (5) Outpatient seventy-two (72) hour rule reviews;

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     (6) Payment errors;

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     (7) Billing errors; and

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     (8) Such others as may be designated by the department; and be it further

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     RESOLVED, That in order to implement these provisions, the department will either

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contract with the cooperative purchasing network (“CPN”) to issue a request for proposals

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(“RFP”) to select a contractor or use the following contractor selection process:

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     (1) On or before January 1, 2013, the department will issue a request for information

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(“RFI”) to seek input from potential contractors on capabilities and cost structures associated with

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the scope of work in this resolution. The results of the RFI will be used by the department to

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create a formal RFP to be issued within ninety (90) days of the closing date of the RFI;

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     (2) No later than ninety (90) days after the close of the RFI, the department will issue a

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formal RFP to carry out the provisions outlined in this resolution during the first year of

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implementation. To the extent appropriate, the department may include subsequent

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implementation years and may issue additional RFPs with respect to subsequent implementation

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years;

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     (3) The department will select contractors to carry out provisions outlined in this

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resolution using competitive procedures as provided for in chapter 37-2 (“State Purchases”) of the

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Rhode Island General Laws.

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     (4) The department will enter into a contract under the provisions of this resolution with

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an entity only if the entity:

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     (i) Can demonstrate appropriate technical, analytical and clinical knowledge and

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experience to carry out the functions included in this resolution; or

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     (ii) Has a contract, or will enter into a contract, with another entity that meets the above

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criteria; and

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     (5) The department will only enter into a contract under the provisions outlined in this

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resolution with an entity to the extent the entity complies with conflict of interest standards under

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state law, including, but not limited to, the provisions of chapter 37-2 (“State Purchases) of the

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Rhode Island General Laws; and be it further

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     RESOLVED, That the state department of human services will provide entities with a

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contract pursuant to the provisions of this resolution with appropriate access to claims and other

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data necessary for the entity to carry out the functions included in this resolution. This will

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include, but will not be limited to, providing current and historical Medicaid and CHIP claims

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and provider database information, and taking necessary regulatory action to facilitate appropriate

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public-private data sharing, including across multiple Medicaid managed care entities; and be it

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further

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     RESOLVED, That the following reports will be completed by the state department of

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human services:

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     (1) Not later than three (3) months after the completion of the first  implementation year

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outlined in this resolution , the department will submit to the clerk of the house of representatives

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and the clerk of the senate, and also make available to the public, a report that includes the

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following:

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     (i) A description of the implementation and use of technologies set forth in this resolution

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during the year;

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     (ii) A certification by the department that specifies the actual and projected savings to the

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Medicaid and CHIP programs as a result of the use of these technologies, including estimates of

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the amounts of such savings with respect to both improper payments recovered and improper

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payments avoided;

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     (iii) The actual and projected savings to the Medicaid and CHIP programs as a result of

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such use of technologies relative to the return on investment for the use of such technologies and

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in comparison to other strategies or technologies used to prevent and detect fraud, waste, and

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abuse;

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     (iv) Suggestions for any modifications or refinements that should be made to increase the

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amount of actual or projected savings or mitigate any adverse impact on Medicare beneficiaries

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or providers;

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     (v) An analysis of the extent to which the use of these technologies successfully

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prevented and detected waste, fraud, or abuse in the Medicaid and CHIP programs;

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     (vi) A review of whether the technologies affected access to, or the quality of, items and

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services furnished to Medicaid and CHIP beneficiaries; and

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     (vii) A review of what effect, if any, the use of these technologies has had on Medicaid

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and CHIP providers, including assessment of provider education efforts and documentation of

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processes for providers to review and correct problems that are identified.

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     (2) Not later than three (3) months after the completion of the second implementation

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year outlined in this resolution, the department will submit to the clerk of the house of

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representatives and the clerk of the senate, and also make available to the public, a report that will

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include, with respect to such year, the items requested under subdivision (1) herein for said

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second (2nd) year, as well as any other additional items determined appropriate with respect to the

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report for such year.

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     (3) Not later than three (3) months after the completion of the third (3rd) implementation

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year outlined in this resolution, the department will submit to the clerk of the house of

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representatives and the clerk of the senate, and make available to the public, a report that will

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include with respect to such year, the items required under subdivision (1) herein for said third

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(3rd) year, as well as any other additional items determined appropriate with respect to the report

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for such year; and be it further

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     RESOLVED, That this House of Representatives hereby believes that the savings

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achieved through the implementation of this resolution will be sufficient to cover the costs of

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implementation. Therefore, to the extent possible, technology services used in carrying out this

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resolution will be secured using a shared savings model, whereby the state’s only direct cost will

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be a percentage of actual savings achieved. Further, to enable this model, a percentage of

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achieved savings may be used to fund expenditures outlined in this resolution; and be it further

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     RESOLVED, That the Secretary of State be and he hereby is authorized and directed to

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transmit duly certified copies of this resolution to the Governor of the State of Rhode Island, the

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Director of the Department of Human Services, the Director of the Department of Administration,

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and the Director of the Department of Health.

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LC00758

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