0403 Div of Human Services General Administration Fund, 8722 Consolidated Federal Funds Division of Human Services General Administration Fund

Sources of Revenue:

General Fund,Other Fund Federal

Legislation creates:

Neither Program nor Fund

Fiscal Note Summary

Effect this measure will have on costs and revenues of state government.

    The purpose of this bill is to improve program integrity for the State's Medicaid and Children's Health Insurance Program by implementing waste, fraud and abuse, prevention detection and recovery. It provides legislative intent and definitions. The bill provides for data verification and provider screening technology solutions, state of the art clinical code editing technology, state-of-the-art predictive modeling and analytics technologies and implementation of fraud investigative services combining retrospective claims analysis and prospective waste, fraud or abuse detection. It further provides for implementation of Medicaid and Children's Health Insurance Program claims audit and recovery services. It requires contracting with or using contractor selection process with information from the Cooperative Purchasing Network. The bill requires that contract entities be provided with appropriate access to claims and other data, and the bill requires the Secretary of the Department of Health and Human Services and the Director of the Children's Health Insurance Agency to file reports with the Legislature.
    The fiscal impact of this proposed legislation cannot be determined at this time (see "Memorandum" section below).

Fiscal Note Detail

Effect of Proposal Fiscal Year
Fiscal Year
(Upon Full
1. Estmated Total Cost 0 0 0
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 0 0

Explanation of above estimates (including long-range effect):



    Many of the objectives outlined in the proposed legislation can be accomplished with two initiatives that are required by the Affordable Care Act of 2010 (ACA); those are the Recovery Audit Contract (RAC) and National Correct Coding Initiative edits (NCCI) and compliance with revised provider screening and enrollment regulations. ACA required State Medicaid programs to establish RAC programs, the purpose of which is to identify and recover Medicaid overpayments and identify underpayments. States are required to submit a State Plan Amendment (SPA) to CMS and obtain approval of their program; WV's RAC SPA has been approved by CMS and the Department is in the process of issuing a Request for Proposals to obtain a contractor to perform the functions of the RAC program.
    The NCCI edits will address many of the provisions of the proposed legislation related to enhancing cost containment through improved claim accuracy. CMS is requiring State Medicaid programs to implement the NCCI edits, and the Department is currently working to meet that requirement.
    The ACA mandates that States establish procedures under which provider screening is conducted with respect to providers of medical items or services and suppliers under Medicare, Medicaid and CHIP in an effort to combat fraud, waste and abuse. Federal regulations require that all participating providers be screened according to their categorical risk upon initial enrollment and at re-enrollment or revalidation of enrollment. Beginning March 25, 2011, States are required to complete revalidation of enrollment for all providers at least every 5 years. These efforts must be completed by March 24, 2016. The Department is currently revising enrollment policies and processes to ensure compliance with the regulations.
    At this time the Department has no historical experience with these initiatives upon which to estimate the potential cost savings they may generate, or whether those savings would cover the costs of meeting CMS' requirements to implement the programs. If activities beyond those required by the Federal regulations are legislated by the State, there may be an additional cost and also may create conflict between Federal and State intentions. The proposed legislation also indicates that the savings achieved through the article shall more than cover the costs of implementation. The Department is unable to assure that the savings would cover the costs of implementation, but utilizing the ACA initiatives will insure that any costs will be split between the federal government and state government based on the appropriate FMAP.

    Person submitting Fiscal Note: Michael J. Lewis, M.D., Ph.D
    Email Address: