ASSEMBLY, No. 4062

STATE OF NEW JERSEY

215th LEGISLATURE

 

INTRODUCED MAY 6, 2013

 


 

Sponsored by:

Assemblyman  HERB CONAWAY, JR.

District 7 (Burlington)

Assemblyman  TIMOTHY J. EUSTACE

District 38 (Bergen and Passaic)

Assemblywoman  CONNIE WAGNER

District 38 (Bergen and Passaic)

Assemblywoman  VALERIE VAINIERI HUTTLE

District 37 (Bergen)

 

 

 

 

SYNOPSIS

     Establishes Medicaid Smart Card Pilot Program.

 

CURRENT VERSION OF TEXT

     As introduced.

  


An Act establishing the Medicaid Smart Card Pilot Program and supplementing P.L.1968, c.413 (C.30:4D-1 et seq.).

 

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

     1.  As used in this act:

     “Abuse or fraud” means abuse or fraud as defined in section 3 of P.L.2007, c.58 (C.30:4D-55).

     “Commissioner” means the Commissioner of Human Services.

     “Designated recipient” means a recipient who is issued a Medicaid Smart Card.

     “Division” means the Division of Medical Assistance and Health Services in the Department of Human Services.

     “Health care facility” means a health care facility licensed pursuant to P.L.1971, c.136 (C.26:2H-1 et seq.).

     “Health care professional” means a health care professional who is licensed or otherwise authorized to practice a health care profession pursuant to Title 45 or 52 of the Revised Statutes and is currently engaged in that practice.

     “Medicaid” means the Medicaid program established pursuant to P.L.1968, c.413 (C.30:4D-1 et seq.).

     “Medicaid Smart Card” means a Medicaid eligibility identification card that contains personal health information about the individual to whom it is issued, and which is distributed to designated recipients for use in the pilot program in lieu of their current Medicaid eligibility identification cards.  

     “Pilot program” means the “Medicaid Smart Card Pilot Program” established pursuant to this act.

     “Provider” means a health care professional or health care facility providing health care services to a designated recipient.

     “Recipient” means a recipient of Medicaid benefits.

     “Transaction” means each occasion on which a designated recipient presents at a provider’s premises for the receipt of health care services from that provider.

 

     2.  a.  The Commissioner of Human Services shall establish a pilot program, to be known as the “Medicaid Smart Card Pilot Program,” in the Division of Medical Assistance and Health Services of the Department of Human Services.

     (1)  The objective of the pilot program shall be to reduce the total amount of Medicaid expenditures, by reducing the average cost per designated recipient, relative to what would be expended in the absence of the pilot program.  The pilot program shall be designed to reduce the average monthly cost to Medicaid for recipients within the pilot program area by an amount that is at least sufficient to recover the cost of implementing the pilot program. 

     (2)  The commissioner shall determine the geographic area to be included in the pilot program and may contract with an independent entity as the commissioner determines appropriate for the purpose of developing and implementing the pilot program. 

     b.  The pilot program shall include the following activities, at a minimum:

     (1)  enrollment of designated recipients as pilot program participants;

     (2)  distribution of Medicaid Smart Cards to those recipients;

     (3)  authentication of designated recipients at the point of transaction, at the onset and completion of each transaction, in order to prevent card sharing and other forms of abuse or fraud;

     (4)  denial of ineligible persons at the point of transaction;

     (5)  authentication of providers at the point of transaction to prevent phantom billing and other forms of abuse or fraud; and

     (6)  any efforts necessary to secure and protect the personal identity and information of designated recipients.

     c.  The commissioner shall develop such policies and procedures as necessary concerning the distribution and activation of Medicaid Smart Cards for designated recipients and the handling of lost, stolen, or otherwise unavailable Medicaid Smart Cards.

     d.  The pilot program may include the use of any of the following:

     (1)  a secure Internet-based information system for recording and reporting authenticated transactions;

     (2)  a secure Internet-based information system that interfaces with the appropriate State databases to determine the eligibility of designated recipients;

     (3)  a system that gathers analytical information to be provided to datamining companies in order to assist in data-mining processes;

     (4)  a Medicaid Smart Card with the ability to store multiple recipients’ information on one card;

     (5)  procedures that do not require pre-enrollment of designated recipients; and

     (6)  an image of the designated recipient stored on both the Medicaid Smart Card and the database with which it is matched.

     e.  In implementing the pilot program, the division may do any of the following:

     (1)  incorporate additional or alternative methods of authentication of designated recipients;

     (2)  enter and store billing codes, deductible amounts, and bill confirmations;

     (3)  allow electronic prescribing services and prescription database integration and tracking in order to prevent medical error through information sharing and to reduce prescription drug abuse and lower health care costs;

     (4)  implement quick-pay incentives for a provider when an electronic prescribing service, electronic health record, electronic patient record, or computerized patient record used by the provider automatically synchronizes with a designated recipient’s Medicaid Smart Card and the provider electronically submits a claim; and

     (5)  allow elements of the pilot program, including, but not limited to, Medicaid Smart Cards, fingerprint scanners, and card readers, to be adapted for use by other State programs administered by the Department of Human Services in order to reduce costs associated with the use of multiple electronic benefit cards by a recipient.

     f.  The division shall collaborate with the New Jersey Motor Vehicle Commission to ensure that driver’s license photographic and other identification data are utilized to reduce the cost of implementing the pilot program to the maximum extent practicable.

     g.    The commissioner shall apply for such State plan amendments or waivers as may be necessary to implement the provisions of this act and to secure such federal financial participation through the federal Medicaid program as may be available for State expenditures made under this act.

 

     3.  a.  In order to evaluate the average monthly cost of recipients within the pilot program and develop the strategy necessary to achieve the highest rate of savings to Medicaid, the division shall obtain and analyze four sample sets of data for the pilot program, as follows:

     (1)  The division shall collect claims data for an initial sample set, which shall include all claims for recipients within the pilot program area and the average Medicaid cost per recipient by provider type and county from at least the prior fiscal year for a specified time period for the geographic area covered by the pilot program.

     (2)  In order to evaluate increases or decreases in the cost of health care services provided to recipients, the division shall collect a second sample set of claims data adjusted to the base figures in the first sample set.  The second sample set shall represent a rural area and an urban area not participating in the pilot program, with demographic characteristics that are as close as practicable to the recipient population in the geographic area covered by the pilot program, including specific data relating to sex, age, race, and ethnicity, county similarities, number of providers, and the average Medicaid cost per recipient.  This sample set shall be analyzed against data for the prior fiscal year and compared to data for the current fiscal year for the same time frame and geographic area to determine an increase or decrease in the cost of these health care services.  The increase or decrease in cost per recipient from this sample set shall be factored into the data set determined pursuant to paragraph (1) of this subsection to derive an adjusted base figure or average cost per recipient per month.

     (3)  The division shall collect and analyze a third sample set of claims data for recipients and the average cost per recipient on a monthly basis during the pilot program by provider type.  A comparison of the adjusted base data arrived at by the prior sample set with the actual data from the third sample set shall be made to determine the amount of Medicaid savings by provider type, while adjusting for claims derived outside the geographic area of the pilot program that may reflect designated recipients receiving health care services outside the geographic area of the pilot program in order to avoid abuse or fraud detection.

     (4)  The division shall obtain a fourth sample set of data by surveying a sample that comprises two percent of recipients in the pilot program area, prior to the start of the pilot program, to collect data about the health care services received, the frequency of those services, and recipient satisfaction with services used, and then repeating the survey at the completion of the pilot program in order to ascertain recipient satisfaction with the pilot program.

     b.  The commissioner shall report to the Governor, and to the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), no later than one year after the effective date of this act, on the results of the pilot program with regard to achieving its objective pursuant to paragraph (1) of subsection a. of section 3 of this act, and including the commissioner’s findings and recommendations concerning whether to extend the pilot program or expand it to encompass more recipients.  The commissioner shall not extend the pilot program unless the commissioner has determined that the pilot program has achieved its objective and shall not expand the pilot program unless the data obtained by the division, pursuant to subsection a. of this section, indicate that the pilot program can be expanded through savings to Medicaid achieved by the pilot program. 

 

     4.  a.  The provisions of this act shall not be construed as affecting any person’s obligation to comply with the requirements of federal and State law and regulations concerning the privacy of personal health information.

     b.  The commissioner, the Department of Human Services, and any employee thereof, if acting in good faith, shall not be held responsible for any action of any contractor or subcontractor in the event that the contractor or subcontractor is found to have violated any federal or State law or regulation concerning the privacy of personal health information.

 

     5.  If the division has reason to believe that abuse or fraud has been perpetrated in connection with the pilot program, the division shall refer any such matter to the Office of the State Comptroller pursuant to P.L.2010, c.33 (C.52:15C-20 et seq.).

 

     6.  The commissioner, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), shall adopt rules and regulations necessary to effectuate the purposes of this act.

 

     7.  This act shall take effect on the first day of the fourth month next following the date of enactment, but the commissioner may take such anticipatory administrative action in advance thereof as shall be necessary for the implementation of this act.

 

 

STATEMENT

 

     This bill establishes the Medicaid Smart Card Pilot Program in the Division of Medical Assistance and Health Services (DMAHS) of the Department of Human Services

     The objective of the pilot program is to reduce the total amount of Medicaid expenditures, by reducing the average cost per designated recipient, relative to what would be expended in the absence of the pilot program.  The pilot program will be designed to reduce the average monthly cost to Medicaid for recipients within the pilot program area by an amount that is at least sufficient to recover the cost of implementing the pilot program.

     The Commissioner of Human Services will determine the geographic area to be included in the pilot program and may contract with an independent entity as the commissioner determines appropriate for the purpose of developing and implementing the pilot program.

     The pilot program is to include the following activities, at a minimum:

     (1)  enrollment of designated recipients as pilot program participants;

     (2)  distribution of Medicaid Smart Cards to those recipients, to be used by them in lieu of their current Medicaid eligibility identification cards;

     (3)  authentication of designated recipients at the point of transaction, at the onset and completion of each transaction, in order to prevent card sharing and other forms of abuse or fraud;

     (4)  denial of ineligible persons at the point of transaction;

     (5)  authentication of providers at the point of transaction to prevent phantom billing and other forms of abuse or fraud; and

     (6)  any efforts necessary to secure and protect the personal identity and information of designated recipients.

     The commissioner is to apply for such State plan amendments or waivers as may be necessary to implement the provisions of the bill and to secure such federal Medicaid funding as may be available for State expenditures made under the bill.

     In order to evaluate the average monthly cost of recipients within the pilot program and develop the strategy necessary to achieve the highest rate of savings to Medicaid, DMAHS is to analyze four sample sets of claims and recipient data for the pilot program.  The commissioner is further directed to report to the Governor and the Legislature, no later than one year after the effective date of the bill, on the results of the pilot program with regard to achieving its objective, and including the commissioner’s findings and recommendations concerning whether to extend the pilot program or expand it to encompass more recipients.  The commissioner is not to extend the pilot program unless the commissioner has determined that the pilot program has achieved its objective and is not to expand the pilot program unless the data obtained by the division pursuant to the bill indicate that the pilot program can be expanded through savings to Medicaid achieved by the pilot program. 

     The bill takes effect on the first day of the fourth month following enactment, but authorizes the commissioner to take prior administrative action as necessary for its implementation.