2013 -- S 0134

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LC00410

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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 HEATH AND SAFETY -- CORRECTIONAL HEALTHCARE ACT

     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 23 of the General Laws entitled "HEALTH AND SAFETY" is hereby

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amended by adding thereto the following chapter:

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     CHAPTER 88

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CORRECTIONAL HEALTHCARE ACT

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     23-88-1. Short title. – This chapter shall be known and may be cited as the “Correctional

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Healthcare Act.”

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     23-88-2. Legislative intent. -- It is the intent of the general assembly to:

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     (1) Reduce the state’s correctional healthcare costs by requiring hospitals and other

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medical service providers to bill Medicaid for eligible inmate inpatient hospital and professional

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services;

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     (2) Implement improper payment detection, prevention and recovery solutions to reduce

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correctional healthcare costs by introducing prospective solutions to eliminate overpayments and

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retrospective solutions to recover those overpayments that have already occurred;

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     (3) Cap all contract and non-contract correctional healthcare reimbursement rates at no

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more than one hundred ten percent (110%) of Medicare; and

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     (4) Embrace technologies to better manage correctional healthcare expenses.

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     23-88-3. Definitions. -- The following definition shall apply throughout this chapter

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unless the context clearly requires otherwise:

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     (1) “Medicare” means the social insurance program administered by the United States

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government, established under Title XVIII of the Social Security Act of 1965.

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     23-88-4. Application. -- Unless otherwise stated, this chapter shall specifically apply to:

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     (1) State correctional healthcare systems and services provided under the general laws;

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and

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     (2) State contracted managed correctional healthcare services provided under the general

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laws.

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     23-88-5. Cap of payments. -- The state shall cap all contract and non-contract payments

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to correctional healthcare providers at no more than one hundred ten percent (110%) of the

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federal Medicare reimbursement rate.

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     23-88-6. Electronic format. -- To the maximum extent practicable, all non-contract

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correctional healthcare claims shall be submitted to the state in an electronic format.

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     23-88-7. Billing for eligible services. -- Hospitals and other medical service providers

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shall bill Medicaid for all eligible inmate inpatient hospital and professional services.

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     23-88-8. Technology solutions. -- The state shall implement state-of-the-art clinical code

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

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through improved claim accuracy and appropriate code correction. The technology shall identify

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and prevent errors or potential overbilling based on widely accepted and referenceable protocols

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such as the American Medical Association and the Centers for Medicare and Medicaid Services.

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The edits shall be applied automatically before claims are adjudicated to speed processing and

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

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more open adjudication process and fewer delays in provider reimbursement.

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     23-88-9. Predictive modeling technology. -- The state shall implement state-of-the-art

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predictive modeling and analytics technologies to provide a more comprehensive and accurate

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view across all providers, beneficiaries and geographies within correctional healthcare programs

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in order to:

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     (1) Assure that hospitals and medical service providers bill Medicaid for all eligible

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inmate inpatient hospital and professional services;

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

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inappropriate, inaccurate or erroneous activity;

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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 the likelihood of potentially inappropriate, inaccurate or erroneous activity;

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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;

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

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potentially inappropriate, inaccurate or erroneous until the claims have been automatically

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verified as valid; and

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     (7) Audit and recover improper payments made to providers based upon inappropriate,

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inaccurate or erroneous billing or payment activity.

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     23-88-10. Audit and recover services. -- 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 diagnoses 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 may include, without limitation: coding compliance diagnosis related

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group (DRG) reviews, transfers, readmissions, cost outlier reviews, outpatient seventy-two (72)

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hour rule reviews, payment errors, and billing errors and others.

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     23-88-11. Contractor selection. -- To implement the inappropriate, inaccurate or

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erroneous detection, prevention and recovery solutions in this chapter, the state shall either sign

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an intergovernmental agreement with another state already receiving these services, contract with

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the cooperative purchasing network (TCPN) to issue a request for proposals (RFP) to select a

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contractor or use the following contractor selection process:

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     (1) Not later than sixty (60) days after the effective date of this chapter the state shall

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issue a request for information (RFI) to seek input from potential contractors on capabilities and

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cost structures associated with the scope of work of this chapter. The results of the RFI shall be

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used by the state to create a formal (RFP) to be issued within ninety (90) days of the closing date

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of the RFI.

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     (2) Not later than ninety (90) days after the close of the RFI, the state shall issue a formal

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RFP to carry out this chapter during the first year of implementation. To the extent appropriate,

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the state may include subsequent implementation years and may issue additional RFPs with

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respect to subsequent implementation years.

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     (3) The state shall select contractors to carry out this chapter using competitive

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procedures as provided for in the state procurement laws.

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     (4) The state shall enter into a contract under this chapter with 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 chapter; 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.

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     (5) The state shall only enter into a contract under this chapter with an entity to the extent

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the entity complies with conflict of interest standards in the state procurement laws.

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     23-88-12. Access to data. -- The state shall provide entities with a contract under this

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chapter with appropriate access to claims and other data necessary for the entity to carry out the

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functions included in this chapter, including, but not limited to: providing current and historical

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correctional healthcare claims and provider database information; and taking necessary regulatory

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action to facilitate appropriate public-private data sharing, including across multiple correctional

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managed care entities.

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     23-88-13. Reporting. -- The following reports shall be completed by the department of

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health:

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

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under this chapter, the department of health shall submit, on an annual basis, to the house and

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senate finance committees, and make available to the public a report that includes the following:

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     (i) A description of the implementation and use of technologies included in this chapter

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during the year;

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     (ii) A certification by the department of health that specifies the actual and projected

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savings to state correctional healthcare programs as a result of the use of these technologies,

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including estimates of the amounts of such savings with respect to both improper payments

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recovered and improper payments avoided;

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     (iii) The actual and projected savings in correctional healthcare services 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 inappropriate,

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inaccurate or erroneous activity;

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     (iv) Any modifications or refinements that should be made to increase the amount of

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actual or projected savings or mitigate any adverse impact on correctional healthcare 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 inappropriate, inaccurate or erroneous activity in correctional healthcare

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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 correctional healthcare beneficiaries; and

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

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healthcare 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 (2nd)

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implementation year under this chapter, the department of health shall submit, on an annual basis,

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to the house and senate finance committees, and make available to the public a report that

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includes, with respect to such year, the items required under subdivision (1) as well as any other

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additional items deemed appropriate with respect to the 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 under this chapter, the department of health shall submit, on an annual basis, to the house

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and senate finance committees, and make available to the public a report that includes with

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respect to such year, the items required under subdivision (1), as well as any other additional

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items deemed appropriate with respect to the report for such year.

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     23-88-14. Shared savings. -- It is the intent of the general assembly that the savings

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achieved through this chapter shall more than cover the costs of implementation. Therefore, to the

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extent possible, technology services used in carrying out this chapter shall be secured using a

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shared savings model, whereby the state’s only direct cost will be a percentage of actual savings

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achieved. Further, to enable this model, a percentage of achieved savings may be used to fund

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expenditures under this chapter.

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     23-88-15. Severability. -- If any section, paragraph, sentence, clause, phrase, or any part

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of the chapter passed is declared invalid, the remaining sections, paragraphs, sentences, clauses,

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phrases, or parts thereof shall be in no manner affected and shall remain in full force and effect.

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     SECTION 2. This act shall take effect upon passage.

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LC00410

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO HEATH AND SAFETY -- CORRECTIONAL HEALTHCARE ACT

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     This act would establish the correctional healthcare act in order to reduce the costs of

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correctional healthcare.

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     This act would take effect upon passage.

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LC00410

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