HB407 Summary

• Department of Corrections and Medicaid Agency must jointly adopt and implement a plan to reduce health care overpayments for correctional inmates using clinical code editing technology and automated claims processing.

• Plan shall include implementation of claims audit and recovery services to identify improper payments, validate overpayments, and ensure diagnoses and procedure codes match supporting physician documentation.

• Department and Medicaid Agency must establish automated payment detection, prevention, and recovery solutions to ensure Medicaid is billed appropriately for eligible inpatient hospital and professional services.

• Contracting for services must be structured so that savings achieved exceed program implementation and administration costs, with direct state costs funded through actual savings generated.

• Contractor reimbursement may use percentage of achieved savings, per beneficiary per month, per transaction, case-rate, or blended models, and may include performance guarantees ensuring savings exceed program costs.