2013 -- S 0132

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LC00483

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

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A N A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT -- CORRECTIONAL

INSTITUTIONS

     Introduced By: Senator William A. Walaska

     Date Introduced: January 24, 2013

     Referred To: Senate Finance

It is enacted by the General Assembly as follows:

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     SECTION 1. Title 42 of the General Laws entitled "State Affairs and Government" is

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hereby amended by adding thereto the following chapter:

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     CHAPTER 56.4

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CORRECTIONAL HEALTHCARE COST REDUCTION

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     42-56.4-1. Legislative findings. -- The legislature finds and declares that states have

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saved millions of dollars by implementing solutions to eliminate and recover correctional

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healthcare overpayments. Similarly, states have significantly reduced correctional healthcare

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costs by billing Medicaid for eligible inpatient healthcare costs. Therefore, it is the intent of the

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legislature to implement automated payment detection, prevention and recovery solutions to

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reduce correctional healthcare overpayments and to assure that Medicaid is billed for eligible

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inpatient hospital and professional services.

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     42-56.4-2. Application. -- Unless otherwise stated, the chapter shall specifically apply to:

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     (1) State correctional healthcare systems and services.

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     (2) State contracted managed correctional healthcare services.

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     42-56.4-3. Clinical code editing technology. -- The state shall implement state-of-the-art

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clinical code editing technology solutions to further automate claims resolution and enhance cost

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containment through improved claim accuracy and appropriate code correction. The technology

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shall indentify and prevent errors or potential overbilling based on widely accepted and

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referenceable protocols such as the American Medical Association and the Centers for Medicare

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and Medicaid Services. The edits shall be applied automatically before claims are adjudicated to

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speed processing and reduce the number of pended or rejected claims and help ensure a smoother,

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more consistent and more open adjudication process and fewer delays in provider reimbursement.

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     42-56.4-4. Healthcare claims auditing. -- The state shall implement correctional

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healthcare claims audit and recovery services to identify improper payments due to non-

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fraudulent issues, audit claims, obtain provider sign-off on the audit results and recover validated

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overpayments. Post payment reviews shall ensure that the diagnosis and procedure codes are

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accurate and valid based on the supporting physician documentation within the medical records.

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Core categories of reviews could include coding compliance diagnosis related group (DRG)

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reviews, transfers readmissions, cost outlier reviews, outpatient seventy-two (72)-hour rule

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reviews, payment errors, billing errors, and others.

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     42-56.4-5. Automated payment detection -- Prevention and recovery services. -- The

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state shall implement automated payment detection, prevention and recovery solutions to assure

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the Medicaid is billed for eligible inpatient hospital and professional services.

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     42-56.4-6. Implementation. -- It is the intent of the legislature that the state shall

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contract for these services and that the savings achieved through this chapter shall more than

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cover the cost of implementation and administration. Therefore, to the extent possible, technology

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services used in carrying out this chapter shall be secured using the savings generated by the

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program, whereby the state’s only direct cost will be funded through the actual savings achieved.

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Further, to enable this model, reimbursement to the contractor may be contracted on the basis of a

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percentage of achieved savings model, a per beneficiary per month model, a per transaction

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model, a case-rate model, or any blended model of the aforementioned methodologies.

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Reimbursement models with the contractor may also include performance guarantees of the

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contractor to ensure savings identified exceeds program costs.

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     SECTION 2. This act shall take effect upon passage.

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LC00483

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT -- CORRECTIONAL

INSTITUTIONS

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     This act would reduce inmate healthcare costs by billing Medicaid for eligible inpatient

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hospitals and professional services.

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     This act would take effect upon passage.

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LC00483

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