House Committee on Finance (02/09/2010)

Final
STAFF SUMMARY OF MEETING

HOUSE COMMITTEE ON FINANCE

Date:	02/09/2010	ATTENDANCE

Time:	09:47 AM to 10:17 AM	DelGrosso	X
		Frangas	*
Place:	LSB A	Gerou	X
		Kagan	X
This Meeting was called to order by		Kefalas	X
	Representative Judd	Labuda	X
		Roberts	X
This Report was prepared by		Summers	X
	Ron Kirk	Swalm	*
		Benefield	X
		Judd	X
		X = Present, E = Excused, A = Absent, * = Present after roll call

Bills Addressed:		Action Taken:
HB10-1176		Amended, Referred to State, Veterans, & Military Affairs

09:47 AM -- House Bill 10-1176 - Concerning Recovery Audits for State Agencies

Representative Vaad, prime sponsor, explained the provisions of the bill and distributed a table on four states that have recovery audits programs (Attachment A). He explained that the bill requires the Office of State Planning and Budgeting (OSPB) to contract with a third party to perform an audit of state agencies or other covered entities to determine whether overpayments to individuals, vendors, and others occur as a result of pricing errors, neglected rebates, discounts, unclaimed refunds, or other related general errors. The bill applies to state agencies that expend more than $25 million annually and authorizes OSPB to retain a portion of any amount recovered due to an audit to defray the administrative costs incurred in contracting for and providing oversight of the recovery audit.

Representative Vaad noted that under the bill, OSPB must promulgate rules, report to the Legislative Audit Committee and Joint Budget Committee by May 1 of each year regarding exemptions from the recovery audit process, and provide a written report to the General Assembly summarizing the contents of all recovery audit contractor reports received during the prior fiscal year by December 31 of each year. The committee discussed the recovery audit process that is already in place for some of the larger state agencies. As an example, the committee briefly discussed the audit recovery process that is in place for the Department of Health Care Policy and Finance administration of the state's Medicaid program.

The following person testified:

10:03 AM -- Mr. Brad Young, R/X Plus Pharmacies, responded to committee questions and discussed the systems that are already in place for Medicaid. He mentioned that with a contingency audit, some auditors look at everything possible to recover the most amount of money possible. This bill may result in some audit redundancies especially for the Medicaid program that already has a auditing process in place. Mr. Young closed by noting that the cost of the auditor for Medicaid is equal to 18 percent of transactions audited that result in a recovery of funds.

The committee engaged in a discussion on the bill triggering multiple audit processes for those state agencies that already have systems in place. Representative Vaad distributed amendment L.001 (Attachment B) and explained that it made some technical changes that address the exchange of information between state agencies and auditors. The following actions were taken by the committee.

10:12 AM

The bill was placed on the table for action.


BILL:	HB10-1176
TIME:	10:13:10 AM
MOVED:	Roberts
MOTION:	Moved amendment L.001. The motion passed without objection by those members present.
SECONDED:	Swalm
		VOTE
	DelGrosso
	Frangas
	Gerou
	Kagan
	Kefalas
	Labuda
	Roberts
	Summers
	Swalm
	Benefield
	Judd

Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HB10-1176
TIME:	10:14:46 AM
MOVED:	Roberts
MOTION:	Refer House Bill 10-1176, as amended, to the State, Veterans, & Military Affairs Committee. The motion passed on a 11-0 vote.
SECONDED:	Kefalas
		VOTE
	DelGrosso	Yes
	Frangas	Yes
	Gerou	Yes
	Kagan	Yes
	Kefalas	Yes
	Labuda	Yes
	Roberts	Yes
	Summers	Yes
	Swalm	Yes
	Benefield	Yes
	Judd	Yes

Final YES: 11 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS

10:17 AM

Adjourn.