SB74 begins the process of reform and cost containment needed to slow the growth of the Alaska Medicaid program. The current and former administration have testified the Medicaid program, as it stands, is not sustainable. Low oil prices and billions of dollars in revenue shortfalls have forced us to change how we do business.
In July of 2013, the Medicaid Budget Group of the Department of health and Social Services reported the total spending on Medicaid Services will reach $6.3 billion in 2032, including $2.8 billion in state matching funds. They stated if we do not act now to bend the growth curve of Medicaid, many of our most vulnerable Alaskans will be without the critical health care services they need.
The underlying principle is called Coordinated Care. This takes a holistic approach to case management and using all available technologies to improve the care delivery. SB74 reduces waste and redundancy in Medicaid usage, billing and delivery. The components of reform and coordinated care include Telemedicine (breaking barriers to behavioral health), Pharma-Control (preventing abusive drug shopping), Travel Smart (preventing redundant trip requirements), and Better Oversight (vet real claims smarter, fighting fraud and abuse).
SB74 takes a measured approach by setting a medical framework assistance and reform program into statute. This program requires the Department of Health and Social Services to expand the use of telehealth, enhances fraud prevention, enforcement, and recovery. It also undertakes additional pharmacy initiatives, reduces the cost of the state’s home and community-based services with a new waiver program, and provides electronic explanation of benefits to recipients, as well as referrals to a range of community and social supports.
In the next five years, the savings projection for the State of Alaska is around $479 million.
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