Medicaid cost containment bill advanced

Lawmakers gave first-round approval March 16 to a bill designed to encourage the fiscal integrity of Nebraska’s Medicaid program.

Introduced by the Health and Human Services Committee, LB541 would require the state Department of Health and Human Services to contract with one or more recovery audit contractors for the following services:

• provider claim review and overpayment recovery;
• cost avoidance through identifying third-party liability;
• cost recovery of third-party liability through postpayment reimbursement; and
• identification and recovery of claims that were the result of accident or neglect and payable to a casualty insurer.

The bill also would require HHS to contract for a health insurance premium assistance payment program and would allow the department to enter into any other contract that would promote the integrity of the state’s Medicaid program. All contracts would be entered into on a contingent fee basis.

Lincoln Sen. Kathy Campbell, chairperson of the committee, said 40 states use specialized contractors to help contain Medicaid costs and ensure that funds are well spent. She said LB541 would build on current HHS efforts to recover overpayments.

“The committee feels strongly that we need to make a statement of how important it is to contain Medicaid costs,” Campbell said.

Sen. Danielle Conrad of Lincoln expressed concern about placing an additional bureaucratic burden on Medicaid providers but supported the bill’s intent.

Campbell acknowledged that the bill would require more time and paperwork from providers but said it is projected to save the state at least $4 million annually.

The bill advanced to select file on a 30-0 vote.