An Act relating to actions of the Department of Health and Social Services regarding certain health facility payments.

HB 168 amends the Medicaid reimbursement rate appeals process to ensure a more timely final decision, which, I believe, will result in lower costs for both health care providers and the Department of Health and Social Services.

Problem: The Medicaid reimbursement rate appeals process currently traps health care providers in a state of administrative indecision when they appeal rates. The payment rates for health care services covered by Medicaid are set annually by the Medicaid Rate Advisory Commission, a five-member board appointed by the Governor. If a health care provider wishes to challenge a reimbursement rate they must file an appeal within 30 days after the rate is set. Once an appeal is filed a briefing and hearing schedule is agreed upon and an evidentiary hearing is held (usually) within 120 days. These hearings often take several days, after which the hearing officer submits a recommendation to the Commissioner of Health and Social Services. The commissioner has three options: accept, deny, or remand the hearing officer's recommendation. In some cases the commissioner has remanded the recommendation, whereupon the hearing officer made additional findings and resubmitted the recommendation to the commissioner, only to have the commissioner remand the decision again. There are cases still in the appeals process that were filed in 1991, nearly a decade ago.

Solution: HB 168 establishes a more responsive timeline for the disposition of rate appeals. Current law (AS 47.07.075) allows the commissioner 30 days to render a decision, with the option of remanding the case back to the hearing officer for additional findings. HB 168 allows the commissioner 30 days to render a final administrative decision. If the commissioner fails to make a final decision, the hearing officer's recommendation becomes the final decision. A final administrative decision may be appealed to the state superior court.

There are currently more than 40 appeals outstanding, with a cost to the state of at least $10 million and as much as $30 million. Health care providers need to be able to more efficiently define their cost and reimbursement structure, and the department needs to be able to finalize these costly administrative appeals in a more timely manner. Please support HB 168, which addresses the needs of both the health care providers and the department.