ARIZONA STATE LEGISLATURE
Fiftieth Legislature – Second Regular Session
JOINT LEGISLATIVE AUDIT COMMITTEE
House Hearing Room 4 -- 8:00 a.m.
Chairman Seel called the meeting to order at 8:10 a.m. and attendance was noted by the secretary.
Members
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Representative Carl Seel, Chair - 2012 |
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Representative Tom Chabin |
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Representative Justin Olson |
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Representative David Stevens |
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Senator Rick Murphy, Vice Chair - 2012 |
Representative Anna Tovar |
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Senator Rich Crandall |
Representative Andrew Tobin, Ex-officio |
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Senator Linda Lopez |
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Senator David Lujan |
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Senator Steve Pierce, Ex-officio |
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Opening Comments
Chairman Seel announced that, until a quorum is present, he will take discussion only on agenda items. He introduced the staff of the Joint Legislative Audit Committee.
Recovery Audit of Managed Care
Debbie Davenport, Auditor General, addressed the Members to answer any questions.
Chairman Seel asked if his description of a recovery audit was accurate. Ms. Davenport replied that his summary was good and that performing a recovery audit is complicated. She informed the Members that the federal government already mandates recovery audits of all state Medicaid agencies. She explained that there are federal instructions for management and for state auditors and the instructions for management include the mandate for recovery audits, which are a tool for management.
Chairman Seel asked if the recovery audit should cover managed care. Ms. Davenport replied that the federal government is still grappling with how a recovery audit of a managed care environment can and should be conducted; there is no model at this time. She explained that, typically, the firm conducting the audit is paid first from recovered funds and that the remaining recovered funds are split between the federal government and state agencies; but a managed care environment makes the situation more complicated because recovered funds also go to the provider.
Senator Biggs inquired about the distribution of recovered funds; discussion ensued.
Ms. Davenport explained that the Arizona Department of Administration has entered into a contract with Recovery Audit Specialists, a firm which is conducting recovery audits on the fee-for-service portion of AHCCCS, such as pharmacy; she commented that not much has been recovered to this point.
Chairman Seel explained that the Governor's Office believes it is the Executive's prerogative, not the Legislature's, to audit and oversee agencies. The recovery audit described by Ms. Davenport was the result of the Governor's decision. Chairman Seel commented that the fee-for-service portion is only 5 percent of AHCCCS' operation and therefore an audit is not being done on the other 95 percent, which is the managed care portion. He stated that this Committee is empowered to order the Auditor General to perform a recovery audit of the managed care portion of Arizona's Medicaid.
Ms. Davenport stated that recovery audits are complex and resource-intensive and, as a result of recent budget constraints, her office does not have the staff to perform it; this type of audit must be contracted out to a firm that has doctors and nurses on staff to read insurance company invoices and determine validity of the large amount of information collected and reviewed.
Chairman Seel reiterated that it is within the purview of this Committee to instruct the Auditor General to perform this recovery audit. Mr. Chabin asked how an agency working solely for the Legislature will have the authority to recover fees discovered in such an audit. Chairman Seel replied that the Attorney General's Office will address this question.
Art Harding, Attorney General's Office, addressed Mr. Chabin's and Chairman Seel's questions about the Auditor General performing a recovery audit and reporting the findings to this Committee which, Chairman Seel stated, has the clear authority to hold the agency accountable to comply with the findings of the audit. Mr. Harding stated that the Fraud Control Unit of the Attorney General's Office receives referrals from many areas, including AHCCCS, and will investigate each complaint no matter the source; he stated that the Attorney General's Office would certainly look into the results of a recovery audit.
Mr. Chabin inquired if an appropriation for a recovery audit would be required. Chairman Seel commented that a contractor can do the audit on a contingency basis, or AHCCCS would be charged. Discussion ensued regarding who has the authority to order the audit and who will perform the audit.
State Database Aggregation
Chairman Seel described the issues with database aggregation and business intelligence, which are methods of finding things out such as how many deceased persons are on AHCCCS or how many felons are on public assistance.
Dr. Chris LeBlon, family physician, described how Medicaid works in Arizona, how providers bill the plans and how database aggregation will enable the Members to see how to be more efficient and save the taxpayers money. He described situations when a patient went to an emergency room 22 times in one month, at a cost of $450 to $1,000 per visit. If that patient were to go to a primary care physician, the cost would be $75 to $125 per visit, and the number of visits would be greatly decreased.
He discussed:
· the need for a mandatory co-pay to make patients more accountable
· the lack of communication among medical departments
· the incidence of false coding
Chairman Seel reiterated the importance of aggregating databases to help find these inaccuracies. He stated that there will be a meeting next Tuesday to continue the discussion with the Auditor General.
Without objection, the meeting adjourned at 9:00 a.m.
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Jane Dooley, Committee Secretary
March 28, 2012
(Original minutes, attachments and audio on file in the Office of the Chief Clerk; video archives available at http://www.azleg.gov)
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JOINT LEGISLATIVE AUDIT COMMITTEE
March 6, 2012
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