AN ACT TO ESTABLISH THE NORTH CAROLINA SMART CARD PILOT PROGRAM TO COMBAT FRAUD. Summarized in Daily Bulletin 3/9/11, 4/14/11, and 4/21/11. Enacted June 13, 2011. Effective June 13, 2011.
Summary date: Jun 13 2011 - View summary
Summary date: Apr 21 2011 - View summary
Senate committee substitute makes the following changes to 2nd edition.
Provides that the Smart Card Pilot Program is to be administered by the Provider and Recipient Services Unit of the Division of Medical Assistance (was, administered by the Program Integrity Unit of the Division of Medical Assistance). Directs that the pilot program be initiated for a six-to-12 month period (was, a 12-month period). Provides that the pilot program is to involve enrollment, distribution, and use of smart cards by designated recipients (was, all recipients) as replacements for currently used Medicaid assistance cards. Clarifies that an information system that is included in the pilot program must be a secure Web-based information system. Provides that in implementing the pilot program, the Department of Health and Human Services (Department) may incorporate additional or alternative methods (was, alternative methods) of authentication of residents.
Directs that the pilot program is to be considered a success if it meets minimum criteria defined in this act and reduces the average monthly costs of recipients within the pilot area to recover the cost of the smart card program, (was, reduce the average monthly cost of the pilot program recipients by a minimum of 3%). Prohibits expansion of the pilot program unless the Department’s data indicates that the program can be expanded through program savings (was, prohibited expansion of the program unless the General Assembly provided for its continuation or expansion).
Provides that all federal and state laws regulating the privacy of personal health information including HIPAA and HITECH apply to prosecutions involving both criminal and civil penalties allowable under law, up to a felony criminal conviction. Provides that the provisions regarding compliance and prosecution apply to all contracts made by the Department in regards to this pilot program. Requires that all compliance and prosecution provisions in the proposed act be incorporated into all contractual documents between the Department and a third-party vendor. Provides that any violation of federal or state laws regarding the privacy of personal health information makes the contracting parties subject to prosecution; however, provides that if the Department is acting in good faith, it is not held responsible for the actions of a contractor or subcontractor that violates any federal or state law concerning the protection of personal health information.
Deletes provision specifying that funds appropriated to the General Assembly for 2010-11 fiscal year for fraud prevention be carried forward to the 2011-12 fiscal year to carry out the purposes of this act.
Summary date: Apr 14 2011 - View summary
Senate committee substitute makes the following changes to 1st edition. Removes provisions about finger-imaging system and fingerprint scanners and card readers and storage of recipients’ benefit, insurance, and health information. Also deletes definitions section.
Summary date: Mar 9 2011 - View summary
Establishes a Smart Card Pilot Program under the Department of Health and Human Services (DHHS), Program Integrity Unit of the Division of Medical Assistance to do all of the following: (1) authenticate Medicaid recipients at the onset and completion of ach transaction in order to prevent card sharing and other forms of fraud; (2) deny ineligible persons at the point of transaction; (3) authenticate providers of Medicaid services at the point of transaction to prevent phantom billing and other forms of provider fraud; (4) secure and protect the personal identity and information of Medicaid recipients; and (5) reduce the total amount of medical assistance expenditures by reducing the average cost per recipient. Defines the following terms: claim, medical assistance card, multifactor authentication, and point of transaction.
Specifies that the pilot program must run for 12 months and include the following: (1) smart cards (which replace existing medical assistance cards) for the storage of Medicaid recipients State benefit information, insurance information, prescription history, and other general health information and that are capable of storing multiple recipients’ information on one card; (2) biometric fingerprint scanners and card readers; (3) secure finger-imaging system that is compliant with federal law; (4) information system for recording and reporting authenticated transactions that interfaces with the appropriate State databases to determine eligibility of recipients and that gathers analytical information to be provided to data-mining companies; (5) no requirement for preenrollment of recipients; and (6) the ability to store an image of the Medicaid recipient’s image on the smart card and in the database.
Provides metrics to determine if the pilot program is a success and authorizes DHHS to modify program as necessary if it does not meet projected savings threshold. Specifies that pilot program not be expanded unless authorized by the General Assembly. Requires DHHS to submit a detailed report on the implementation and success of the pilot program to the Governor, Speaker of the House of Representatives, President Pro Tempore of the Senate, Chairs of the Senate and House of Representatives Appropriations Committees, and to the Fiscal Research Division by June 30, 2012.
Specifies that the act must be construed consistent with the federal Social Security Act.
Directs that funds appropriated to DHHS for the 2010-11 fiscal year for the purpose of fraud prevention must be carried forward to the 2011-12 fiscal year to carry out the purposes of the act.