(1) In enacting this section, the general assembly intends to:
Implement waste, fraud, and abuse detection, prevention, and recovery solutions toimprove program integrity in the state's medicaid program and create efficiency and cost savings through a shift from a retrospective "pay and chase" model to a prospective prepayment model; and
Invest in the most cost-effective technologies or strategies that yield the highest return on investment.
(2) By September 30, 2013, the state department shall issue a request for information to seek input from potential contractors on capabilities that the state department does not currently possess, functions that the state department is not currently performing, and the cost structures associated with implementing:
(a) Advanced predictive modeling and analytics technologies to provide a comprehensive and accurate view across all providers, recipients, and geographic locations within the medicaid program in order to:
Identify and analyze those billing and utilization patterns that represent a high risk offraudulent activity;
Be easily integrated into the existing medicaid program claims operations;
Undertake and automate such analysis before payment is made to minimize disruptions to state department operations and speed claim resolution;
Prioritize the identified transactions for additional review before payment is madebased upon the likelihood of potential waste, fraud, or abuse;
Obtain outcome information from adjudicated claims to allow for refinement andenhancement of the predictive analytics technologies based on historical data and algorithms with the system; and
Prevent the payment of claims for reimbursement that have been identified as potentially wasteful, fraudulent, or abusive until the claims have been automatically verified as valid;
(b) Provider and recipient data verification and screening technology solutions, which may use publicly available records, for the purposes of automating reviews and identifying and preventing inappropriate payments by:
Identifying associations between providers, practitioners, and beneficiaries that indicate rings of collusive fraudulent activity; and
Discovering recipient attributes that indicate improper eligibility, including but notlimited to death, out-of-state residency, inappropriate asset ownership, or incarceration; and
(c) Fraud investigation services that combine retrospective claims analysis and prospective waste, fraud, or abuse detection techniques. These services must include analysis of historical claims data, medical records, suspect provider databases, and high-risk identification lists, as well as direct recipient and provider interviews. Emphasis must be placed on the state department providing education to providers and allowing them the opportunity to review and correct any problems identified prior to administrative proceedings.
(3) In addition to the information provided pursuant to subsection (2) of this section, a potential contractor responding to the request for information shall include information concerning:
The extent to which the potential contractor will seek clinical and technical expertisefrom Colorado providers concerning the design and implementation of the medicaid fraud detection system described in this section and the method or methods for seeking that expertise; and
The potential contractor's ability to create an education and outreach program that iswidely available and easily accessible to Colorado providers for purposes of educating providers on issues relating to coverage and coding.
(4) (a) The state department is encouraged to use the results of the request for information to create formal requests for proposals to carry out the work identified in this section if the following conditions are met:
The state department expects to generate state savings by preventing fraud, waste,and abuse;
This work can be integrated into the state department's current medicaid operationswithout creating additional costs to the state; and
The reviews or audits are not anticipated to delay or improperly deny the paymentof legitimate claims to providers.
(b) Prior to awarding any contract pursuant to this section, the state department shall establish an appeal process for providers that minimizes the administrative burden placed on providers, limits the number of medical records requests, and provides adequate time for providers to respond to inquiries.
(5) It is the intent of the general assembly that the savings achieved through this section must more than cover the cost of implementation and administration. Therefore, to the extent possible, technology services used in carrying out this section must be secured using the savings generated by the program, with the state's direct cost funded through the actual savings achieved.
Source: L. 2013: Entire section added, (SB 13-137), ch. 285, p. 1501, § 1, effective August 7.