,,ii #aaith ,,congress #b;d ,session ,s4 #dhih ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,june #bd1 #bjbf,mr4 ,scott of ,florida introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to implement recommendations of the ,comptroller ,general of the ,united ,states for improving the ,medicaid ,recovery ,audit ,contractor program and identifying additional opportunities to recover ,medicaid overpayments1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,medicaid ,,rac ,improvement ,act of #bjbf4 #b4 ,improving ,,cms oversight and communication 7a7 ,improved oversight ,section #aijc of the ,social ,security ,act 7#db ,u4,s4,c4 #acif;b7 is amended by adding at the end the following new subsection3 7cc7 ,improving ,state payment integrity 7#a7 ,definitions ,in this subsection3 7,a7 ,medicaid ,,rac program ,the term ,medicaid ,,rac program means a program described in section #aijb7;a77#db77;,b77i74 7,b7 ,,rac exception ,,spa ,the term ,,rac exception ,,spa means a ,state plan amendment submitted to the ,secretary by a ,state for approval of a full exception from1 or an exception to #a or more of1 the requirements described in section #aijb7;a77#db77;,b74 7#b7 ,improved oversight of ,medicaid ,,rac program exceptions ,not later than #ahj days after the date of enactment of this subsection1 the ,secretary shall establish and implement policies and procedures for the following3 7,a7 ,communicate expiration of ,medicaid ,,rac program exception ,clearly communicating to a ,state with an approved ,,rac exception ,,spa-- 7i7 the expiration date of the approval2 and 7ii7 a statement that the ,,rac exception ,,spa approval expiration date shall not be extended after #bjbi4 7,b7 ,monitoring of ,,rac exception ,,spa expirations ,monitoring of ,,rac exception ,,spa expiration dates and notifying ,states with respect to any upcoming expiration date4 7,c7 ,state reports ,requiring annual1 detailed reporting from a ,state with an approved ,,rac exception ,,spa that includes an overview of the ,state's ,medicaid ,,rac program1 including methodologies and justifications for audit limits or exclusions applied under the program4 7#c7 ,improved reporting to ,congress on the effectiveness of the ,medicaid ,,rac program 7,a7 ,in general ,not later than ,december #ca1 #bjbg1 and annually thereafter1 the ,secretary1 in collaboration with ,state ,medicaid agencies1 shall submit to ,congress a report describing the effectiveness of the ,medicaid ,,rac program for the most recently ended fiscal year4 7,b7 ,contents ,each report submitted by the ,secretary to ,congress under subparagraph 7,a7 shall include the following information with respect to the reporting period3 7i7 ,state-specific information ,for each ,state3 7,i7 ,a summary of the ,state's ,medicaid ,,rac program1 including methodologies and justifications for audit limits or exclusions applied under the program1 and a description of any approved exceptions4 7,,ii7 ,the aggregate amount of ,medicaid overpayments recovered and the amount of each overpayment recovered4 7,,iii7 ,the aggregate amount of ,medicaid underpayments and the amount 7actual or estimated7 of each underpayment4 7,,iv7 ,if the ,state that has implemented pre-payment review of ,medicaid payments to beneficiaries1 the aggregate amount of savings 7actual or estimated7 attributable to such pre-payment review4 7,v7 ,the percentage of appeals of demands for overpayment that ended in settlement and1 with respect to any such settlement amount1 the percentage of such amount in comparison to the original overpayment demanded4 7,,vi7 ,the #e initiatives most often implemented by the ,state to reduce overpayments and underpayments4 7,,vii7 ,the number of audit categories-- 7aa7 conducted by a ,state2 or 7bb7 on hold or denied by a ,state4 7ii7 ,secretary recommendations ,recommendations for expanding or improving the ,medicaid ,,rac program1 as the ,secretary determines appropriate4 4 7b7 ,conforming amendment ,section #aijb7;a77#db77;,b77i7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acif;a7a77#db77;,b77i77 is amended by inserting 7but only through ,december #ca1 #bjbh7 after exceptions4 #c4 ,requiring ,medicaid managed care plans to be included in ,medicaid ,,rac programs ,section #aijb7;a77#db7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acif;a7a77#db77 is amended-- 7#a7 in subparagraph 7,a71 by striking and at the end2 7#b7 in subparagraph 7,b77ii7-- 7,a7 in subclause 7,,iii71 by striking and at the end2 and 7,b7 by adding at the end the following new subclause3 7,v7 such program is carried out in a robust manner likely to identify and recoup or prevent a substantial portion of overpayments and specifically includes a review of claims paid by medicaid managed care organizations 7as defined in section #aijc7m77#a77;,a771 prepaid inpatient health plans 7as defined in section #aijc7m77#i77;,d77iii77,i771 and prepaid ambulatory health plans 7as defined in section #aijc7m77#i77;,d77iii77,,ii772 2 and 7#c7 by adding at the end the following new subparagraph3 7,c7 not later than ,january #a1 #bjbh1 the ,state shall provide assurances satisfactory to the ,secretary that the ,state has an adequate process for ensuring that any contract with a medicaid managed care organization 7as defined in section #aijc7m77#a77;,a771 prepaid inpatient health plan 7as defined in section #aijc7m77#i77;,d77iii77,i771 or prepaid ambulatory health plan 7as defined in section #aijc7m77#i77;,d77iii77,,ii771 and a ,state shall include provisions under which such an organization or health plan-- 7i7 shall either-- 7,i7 elect to engage in a period of payment integrity review by designating a period 7not to exceed the lesser of #ah months after payment for a claim or the term of the contract with the managed care organization7 during which the organization or health plan shall be permitted to engage in efforts to identify underpayments and overpayments and recoup overpayments under the ,state plan and under any waiver of the ,state plan with respect to all services for which payment is made to the organization or health plan under such plan or waiver2 or 7,,ii7 agree to permit a ,medicaid recovery audit contractor 7as described in subparagraph 7,b77 engaged by the ,state to engage in such payment integrity review2 and 7ii7 shall agree to-- 7,i7 cooperate with any ,medicaid recovery audit contractor 7as so described7 engaged by the ,state to identify any such underpayments and overpayments and recoup any overpayments under the ,state plan and under any waiver of the ,state plan 7after the expiration of the period designated under clause 7i77,i71 if the organization or health plan has elected such a period72 and 7,,ii7 coordinate such recovery audit efforts in the same manner described in subparagraph 7,b77ii77,,iv77cc72 and 4 #d4 ,additional measures for improving ,medicaid payment integrity 7a7 ,annual reports regarding ,state payment integrity reviews ,section #aijc7;cc7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acif;b71 as added by section #b7;a7 of this ,act1 is amended by adding at the end the following new paragraph3 7#d7 ,annual reports regarding ,state payment integrity reviews 7,a7 ,state reports ,not later than #a year after the date of enactment of this paragraph1 and annually thereafter1 each ,state shall submit1 separate from the information reported under paragraph 7#b77;,c71 a report to the ,secretary1 in such standard form and manner as the ,secretary shall specify1 that identifies the reviewing entity 7including any recovery audit contractor or other program integrity entity7 for each payment stream 7including a non-,state funded payment and capitation or other payments made to a medicaid managed care organization 7as defined in section #aijc7m77#a77;,a771 prepaid inpatient health plan 7as defined in section #aijc7m77#i77;,d77iii77,i771 or prepaid ambulatory health plan 7as defined in section #aijc7m77#i77;,d77iii77,,ii777 under the ,state plan or under a waiver of such ,state plan with respect to all items and services for which payment is made for the applicable reporting period4 7,b7 ,reports to ,congress ,not later than #ahj days after the date of each annual ,state reporting deadline under subparagraph 7,a71 the ,secretary shall prepare and submit to ,congress a report detailing the information contained in such ,state reports1 together with recommendations for such legislation and administrative action as the ,secretary determines appropriate4 4 7b7 ,identifying and testing barriers to ,state participation in ,medicaid ,,rac programs ,section #aijc7;cc7 of the ,social ,security ,act1 as amended by subsection 7a71 is amended by adding at the end the following new paragraphs3 7#e7 ,study on barriers to ,state participation in ,medicaid ,,rac programs 7,a7 ,in general ,the ,secretary shall conduct a study on barriers to ,state establishment and implementation of ,medicaid ,,rac programs as required under section #aijb7;a77#db77;,b77i74 ,such study shall examine-- 7i7 the contingency fee payment structure for recovery audit contractors1 including-- 7,i7 whether such payment structure ensures a healthy and competitive marketplace for ,states to establish and implement ,medicaid ,,rac programs2 and 7,,ii7 the effectiveness of such payment structure based on the population of a ,state that participates in the ,state ,medicaid program2 7ii7 alternative arrangements for engaging recovery audit contractors1 including the viability of multi-,state contracts2 and 7iii7 the start up costs associated with establishing a new ,medicaid ,,rac program in a ,state1 including-- 7,i7 the amount of time before a recovery audit contractor starts recouping overpayments to the extent that the recovery audit contractor recovers such start up costs2 and 7,,ii7 recommendations for a payment structure that could include initial funding to a recovery audit contractor4 7,b7 ,report ,not later than #a year after the date of enactment of this paragraph1 the ,secretary shall submit to ,congress a report containing the results of the study conducted under subparagraph 7,a71 together with recommendations for such legislation and administrative action as the ,secretary determines appropriate4 7#f7 ,demonstration project to improve ,state participation in ,medicaid ,,rac programs 7,a7 ,in general ,not later than #b years after the date of enactment of this paragraph1 based on the study conducted under paragraph 7#e71 the ,secretary shall conduct a #e-year demonstration project designed to increase the number of ,states that establish and implement a ,medicaid ,,rac program in accordance with section #aijb7;a77#db77;,b77i74 7,b7 ,reports to ,congress ,the ,secretary shall submit an interim report to ,congress on the demonstration project conducted under this paragraph not later than #ij days after the initiation of the demonstration project1 and a final report not later than #ahj days after the demonstration project ends4 ,the final report shall include an evaluation of the project and recommendations for such legislation and administrative action as the ,secretary determines appropriate4 4 7c7 ,audit and recovery periods ,section #aijb7;a77#db7 of the ,social ,security ,act 7#db ,u4,s4,c4 #acif;a7a77#db771 as amended by section #c1 is amended by adding at the end the following new subparagraph3 7,d7 notwithstanding clause 7i7 of subparagraph 7,b71 beginning #abj days after the date of enactment of this subparagraph1 each contract entered into by the ,state with a recovery audit contractor under the program described in subparagraph 7,b71 including any contract with a recovery audit contractor applying to a medicaid managed care organization 7as defined in section #aijc7m77#a77;,a771 prepaid inpatient health plan 7as defined in section #aijc7m77#i77;,d77iii77,i771 or prepaid ambulatory health plan 7as defined in section #aijc7m77#i77;,d77iii77,,ii771 shall provide that audit and recovery activities shall be conducted during a fiscal year with respect to payments made under the ,state plan and under any waiver of the ,state plan1 or1 if applicable1 payments made by such an organization or health plan1 during such fiscal year and retrospectively for a period of #d fiscal years prior to such fiscal year2 4