2013 -- H 5734

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LC01487

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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 HUMAN SERVICES - MEDICAL ASSISTANCE FRAUD

     Introduced By: Representatives Serpa, Fellela, and Baldelli-Hunt

     Date Introduced: February 28, 2013

     Referred To: House Finance

It is enacted by the General Assembly as follows:

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     SECTION 1. Title 40 of the General Laws entitled "HUMAN SERVICES" is hereby

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amended by adding thereto the following chapter:

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     CHAPTER 8.2.1

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ADOPTION OF PRE-PAYMENT PREVENTION SOLUTIONS

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     40-8.2.1-1. Policy. -- The federal government has estimated that state Medicaid programs

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pay around eighteen billion dollars ($18,000,000,000) annually that is attributed to fraud, waste

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and abuse. In order to reduce this fraud, waste and abuse, and save the associated state tax dollars

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that are lost to this fraud, waste and abuse, it is the intent of the legislature to implement modern

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pre-payment prevention and recovery solutions.

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     40-8.2.1-2. Definitions. -- When used in this chapter and unless the specific context

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indicates otherwise:

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     (1) "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.).

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     (2) "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.).

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     40-8.2.1-3. Implementation. -- (a) The state shall implement provider data verification

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and provider screening technology solutions into the claims processing workflow to check current

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healthcare billing and provider rendering data against a continually maintained provider

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information database for the purposes of automating reviews and identifying and preventing

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inappropriate payments to deceased providers, sanctioned providers, license expiration/retired

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providers and confirmed wrong addresses. In addition, the state shall implement state-of-the-art

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predictive modeling and analytics technologies in a pre-payment position within the healthcare

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claim workflow to provide a more comprehensive and accurate view across all providers,

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

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     (1) Identify and analyze those billing or utilization those billing or utilization patterns that

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represent a high risk of 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.

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     40-8.2.1-4. Contracting for services -- It is the intent of the general assembly that the

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

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

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

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by the program, whereby the state's only direct cost will be funded through the actual savings

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achieved. Further, to enable this model, reimbursement to the contractor may be contracted on the

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

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

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methodologies. Reimbursement models with the contractor may also include performance

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guarantees of the 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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LC01487

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO HUMAN SERVICES - MEDICAL ASSISTANCE FRAUD

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     This act would use technology to identify fraudulent activity in the Medicaid and CHIP

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programs before payment is made.

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     This act would take effect upon passage.

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LC01487

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