2016 -- S 2197

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LC003159

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2016

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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 27, 2016

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Title 23 of the General Laws entitled "HEALTH AND SAFETY" is hereby

amended by adding thereto the following chapter:

CHAPTER 94

CORRECTIONAL HEALTHCARE ACT

     23-94-1. Short title. -- This chapter shall be known and may be cited as the "Correctional

Healthcare Act."

     23-94-2. Legislative intent. -- It is the intent of the general assembly to:

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

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

services;

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

correctional healthcare costs by introducing prospective solutions to eliminate overpayments and

retrospective solutions to recover those overpayments that have already occurred;

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

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

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

     23-94-3. Definitions. -- The following definitions shall apply throughout this chapter

unless the context clearly requires otherwise:

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

government, established under Title XVIII of the Social Security Act of 1965, 42 U.S.C. §§1395

et seq.

     23-94-4. Application. – Unless otherwise stated, this chapter shall specifically apply to:

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

and

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

laws.

     23-94-5. Cap of payments. -- The state shall cap all contract and non-contract payments

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

federal Medicare reimbursement rate.

     23-94-6. Electronic format. -- To the maximum extent practicable, all non-contract

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

     23-94-7. Billing for eligible services. -- Hospitals and other medical service providers

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

     23-94-8. Technology solutions. -- The state shall implement state-of-the-art clinical code

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

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

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

such as those of the American Medical Association and the Centers for Medicare and Medicaid

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

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

more consistent and more open adjudication process with fewer delays in provider

reimbursement.

     23-94-9. Predictive modeling technology. – The state shall implement state-of-the-art

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

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

in order to:

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

inmate inpatient hospital and professional services;

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

inappropriate, inaccurate or erroneous activity;

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

disruptions to the workflow and speed claim resolution;

     (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;

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

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

within the system;

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

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

verified as valid; and

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

inaccurate or erroneous billing or payment activity.

     23-94-10. Audit and recover services. -- The state shall implement correctional

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

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

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

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

Core categories of reviews may include, without limitation: coding compliance diagnosis related

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

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

     23-94-11. Contractor selection. – To implement this chapter, the state shall either sign

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

The Cooperative Purchasing Network (TCPN) to issue a request for proposals (RFP) to select a

contractor or use the following contractor selection process:

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

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

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

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

the RFI.

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

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

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

respect to subsequent implementation years.

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

procedures as provided for in the state procurement laws.

     (4) The state shall enter into a contract under this chapter with an entity only if the entity:

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

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experience to carry out the functions required by this chapter; or

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

criteria.

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

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

     23-94-12. Access to data. -- The state shall provide entities with a contract under this

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

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

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

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

managed care entities.

     23-94-13. Reporting. – The following reports shall be completed by the department of

health:

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

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

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

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

during the year;

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

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

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

recovered and improper payments avoided;

     (iii) The actual and projected savings in correctional healthcare services as a result of

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

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

inaccurate or erroneous activity;

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

actual or projected savings or mitigate any adverse impact on correctional healthcare beneficiaries

or providers;

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

prevented and detected inappropriate, inaccurate or erroneous activity in correctional healthcare

programs;

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

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

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

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

     23-94-14. Shared savings. -- It is the intent of the general assembly that the savings

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

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

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

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

expenditures required by this chapter.

     23-94-15. Severability. -- If any section, paragraph, sentence, clause, phrase, or any part

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

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

     SECTION 2. This act shall take effect upon passage.

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LC003159

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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 procedures that would reduce the state's correctional inmate

healthcare costs.

     This act would take effect upon passage.

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LC003159

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