H 3685 General Bill, By Quinn, Wilkins, Rice and Loftis

Similar(H 3579, H 3768, H 3770)
 A BILL TO ENACT THE "SOUTH CAROLINA HEALTH AND HUMAN SERVICES REORGANIZATION
 AND ACCOUNTABILITY ACT OF 2003"; TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA,
 1976, BY ADDING ARTICLE 3 TO CHAPTER 30, TITLE 1 SO AS TO TRANSFER THE
 CONTINUUM OF CARE FOR EMOTIONALLY DISTURBED CHILDREN FROM THE OFFICE OF THE
 GOVERNOR TO THE DEPARTMENT OF SOCIAL SERVICES, TO TRANSFER THE DEPARTMENT OF
 ALCOHOL AND OTHER DRUG ABUSE SERVICES AND THE DEPARTMENT OF MENTAL HEALTH TO
 THE DEPARTMENT OF HEALTH AND HUMAN SERVICES, TO TRANSFER CERTAIN ALCOHOL AND
 DRUG TREATMENT FACILITIES OPERATED BY THE DEPARTMENT OF VOCATIONAL
 REHABILITATION TO THE DEPARTMENT OF HEALTH AND HUMAN SERVICES, TO TRANSFER THE
 SOUTH CAROLINA COMMISSION FOR THE BLIND TO THE DEPARTMENT OF VOCATIONAL
 REHABILITATION, TO RETAIN THE SOUTH CAROLINA MENTAL HEALTH COMMISSION AND THE
 SOUTH CAROLINA COMMISSION FOR THE BLIND AS ADVISORY BOARDS TO THE DEPARTMENT
 OF HEALTH AND HUMAN SERVICES, AND TO PROVIDE TRANSFER AND TRANSITION
 PROVISIONS; TO ADD ARTICLE 5 TO CHAPTER 30, TITLE 1 SO AS TO ESTABLISH THE
 DEPARTMENT OF INFORMATION TECHNOLOGY FOR HEALTH AND HUMAN SERVICES AGENCIES
 AND TO PROVIDE FOR ITS POWERS AND DUTIES, INCLUDING THE MANAGEMENT AND
 ADMINISTRATION FOR ALL INFORMATION TECHNOLOGIES ASSOCIATED WITH THESE
 AGENCIES; TO ADD CHAPTER 64 TO TITLE 2 SO AS TO ESTABLISH A JOINT LEGISLATIVE
 COMMITTEE ON HEALTH AND HUMAN SERVICES AND TO PROVIDE FOR ITS MEMBERSHIP,
 FUNCTIONS, DUTIES, AND RESPONSIBILITIES INCLUDING, AMONG OTHER THINGS,
 REVIEWING THE STATE MEDICAID PLAN; TO ADD ARTICLE 8 TO CHAPTER 6, TITLE 44 SO
 AS TO ESTABLISH THE OFFICE OF INSPECTOR GENERAL FOR THE DEPARTMENT OF HEALTH
 AND HUMAN SERVICES, TO PROVIDE THAT THE INSPECTOR GENERAL MUST BE APPOINTED BY
 AND UNDER THE DIRECTION OF THE JOINT LEGISLATIVE COMMITTEE ON HEALTH AND HUMAN
 SERVICES, AND TO FURTHER PROVIDE FOR THE POWERS AND DUTIES OF THE INSPECTOR
 GENERAL, INCLUDING CONDUCTING AUDITS, PREVENTING WASTE, AND PROMOTING
 ACCOUNTABILITY; TO ADD SECTION 12-2-100 SO AS TO REQUIRE THE DEPARTMENT OF
 REVENUE TO PROVIDE THE DEPARTMENT OF HEALTH AND HUMAN SERVICES ELECTRONIC
 ACCESS TO TAXPAYER INFORMATION TO USE IN DETERMINING MEDICAID ELIGIBILITY; TO
 ADD SECTION 38-71-270 SO AS TO REQUIRE HEALTH INSURERS TO PROVIDE NAMES AND
 IDENTIFYING INFORMATION ON THEIR INSUREDS TO BE USED BY THE DEPARTMENT OF
 HEALTH AND HUMAN SERVICES IN DETERMINING MEDICAID ELIGIBILITY; TO ADD SECTION
 44-6-75 SO AS TO PROVIDE FOR A MEDICAID COST CONTAINMENT ACTION PLAN FOR THE
 PROJECTED EXPENDITURES FOR THE STATE MEDICAID PROGRAM FOR THE NEXT FISCAL YEAR
 AND TO PROVIDE FOR THE CONTENTS OF THE PLAN AND FOR ALTERNATIVE MEASURES WHEN
 REVENUE IS NOT SUFFICIENT TO ADEQUATELY FUND THE MEDICAID PROGRAM; TO
 ESTABLISH THE SOUTH CAROLINA MEDICAID MANDATORY MANAGED CARE PILOT PROGRAM TO
 BE IMPLEMENTED BY THE DEPARTMENT OF HEALTH AND HUMAN SERVICES IN CHARLESTON,
 FLORENCE, GREENVILLE, AND RICHLAND COUNTIES FOR FIVE YEARS TO ENROLL MEDICAID
 RECIPIENTS IN A HEALTH MAINTENANCE ORGANIZATION OR WITH PRIMARY CARE CASE
 MANAGEMENT PROVIDERS AND TO INCLUDE PROVISIONS TO ENSURE COMPETITION,
 ACCOUNTABILITY, AND ACTUARIAL SOUNDNESS; TO REQUIRE THE DEPARTMENT OF HEALTH
 AND HUMAN SERVICES TO IMPLEMENT A PILOT PROJECT TO EVALUATE THE VIABILITY OF
 PRIVATIZING THE MEDICAID ELIGIBILITY PROCESS; TO ADD SECTION 44-7-75 SO AS TO
 REQUIRE THE DEPARTMENT OF HEALTH AND HUMAN SERVICES TO CONTRACT FOR THE
 MANAGEMENT AND OPERATION OF CERTAIN NURSING HOMES FORMERLY UNDER THE
 DEPARTMENT OF MENTAL HEALTH; AND TO DESIGNATE SECTIONS 1-30-10 THROUGH
 1-30-120 AS ARTICLE 1, CHAPTER 30, TITLE 1 AND NAMED "DEPARTMENTS OF STATE
 GOVERNMENT".

   02/25/03  House  Introduced and read first time HJ-34
   02/25/03  House  Referred to Committee on Ways and Means HJ-34

TO ENACT THE "SOUTH CAROLINA HEALTH AND HUMAN SERVICES REORGANIZATION AND ACCOUNTABILITY ACT OF 2003"; TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING ARTICLE 3 TO CHAPTER 30, TITLE 1 SO AS TO TRANSFER THE CONTINUUM OF CARE FOR EMOTIONALLY DISTURBED CHILDREN FROM THE OFFICE OF THE GOVERNOR TO THE DEPARTMENT OF SOCIAL SERVICES, TO TRANSFER THE DEPARTMENT OF ALCOHOL AND OTHER DRUG ABUSE SERVICES AND THE DEPARTMENT OF MENTAL HEALTH TO THE DEPARTMENT OF HEALTH AND HUMAN SERVICES, TO TRANSFER CERTAIN ALCOHOL AND DRUG TREATMENT FACILITIES OPERATED BY THE DEPARTMENT OF VOCATIONAL REHABILITATION TO THE DEPARTMENT OF HEALTH AND HUMAN SERVICES, TO TRANSFER THE SOUTH CAROLINA COMMISSION FOR THE BLIND TO THE DEPARTMENT OF VOCATIONAL REHABILITATION, TO RETAIN THE SOUTH CAROLINA MENTAL HEALTH COMMISSION AND THE SOUTH CAROLINA COMMISSION FOR THE BLIND AS ADVISORY BOARDS TO THE DEPARTMENT OF HEALTH AND HUMAN SERVICES, AND TO PROVIDE TRANSFER AND TRANSITION PROVISIONS; TO ADD ARTICLE 5 TO CHAPTER 30, TITLE 1 SO AS TO ESTABLISH THE DEPARTMENT OF INFORMATION TECHNOLOGY FOR HEALTH AND HUMAN SERVICES AGENCIES AND TO PROVIDE FOR ITS POWERS AND DUTIES, INCLUDING THE MANAGEMENT AND ADMINISTRATION FOR ALL INFORMATION TECHNOLOGIES ASSOCIATED WITH THESE AGENCIES; TO ADD CHAPTER 64 TO TITLE 2 SO AS TO ESTABLISH A JOINT LEGISLATIVE COMMITTEE ON HEALTH AND HUMAN SERVICES AND TO PROVIDE FOR ITS MEMBERSHIP, FUNCTIONS, DUTIES, AND RESPONSIBILITIES INCLUDING, AMONG OTHER THINGS, REVIEWING THE STATE MEDICAID PLAN; TO ADD ARTICLE 8 TO CHAPTER 6, TITLE 44 SO AS TO ESTABLISH THE OFFICE OF INSPECTOR GENERAL FOR THE DEPARTMENT OF HEALTH AND HUMAN SERVICES, TO PROVIDE THAT THE INSPECTOR GENERAL MUST BE APPOINTED BY AND UNDER THE DIRECTION OF THE JOINT LEGISLATIVE COMMITTEE ON HEALTH AND HUMAN SERVICES, AND TO FURTHER PROVIDE FOR THE POWERS AND DUTIES OF THE INSPECTOR GENERAL, INCLUDING CONDUCTING AUDITS, PREVENTING WASTE, AND PROMOTING ACCOUNTABILITY; TO ADD SECTION 12-2-100 SO AS TO REQUIRE THE DEPARTMENT OF REVENUE TO PROVIDE THE DEPARTMENT OF HEALTH AND HUMAN SERVICES ELECTRONIC ACCESS TO TAXPAYER INFORMATION TO USE IN DETERMINING MEDICAID ELIGIBILITY; TO ADD SECTION 38-71-270 SO AS TO REQUIRE HEALTH INSURERS TO PROVIDE NAMES AND IDENTIFYING INFORMATION ON THEIR INSUREDS TO BE USED BY THE DEPARTMENT OF HEALTH AND HUMAN SERVICES IN DETERMINING MEDICAID ELIGIBILITY; TO ADD SECTION 44-6-75 SO AS TO PROVIDE FOR A MEDICAID COST CONTAINMENT ACTION PLAN FOR THE PROJECTED EXPENDITURES FOR THE STATE MEDICAID PROGRAM FOR THE NEXT FISCAL YEAR AND TO PROVIDE FOR THE CONTENTS OF THE PLAN AND FOR ALTERNATIVE MEASURES WHEN REVENUE IS NOT SUFFICIENT TO ADEQUATELY FUND THE MEDICAID PROGRAM; TO ESTABLISH THE SOUTH CAROLINA MEDICAID MANDATORY MANAGED CARE PILOT PROGRAM TO BE IMPLEMENTED BY THE DEPARTMENT OF HEALTH AND HUMAN SERVICES IN CHARLESTON, FLORENCE, GREENVILLE, AND RICHLAND COUNTIES FOR FIVE YEARS TO ENROLL MEDICAID RECIPIENTS IN A HEALTH MAINTENANCE ORGANIZATION OR WITH PRIMARY CARE CASE MANAGEMENT PROVIDERS AND TO INCLUDE PROVISIONS TO ENSURE COMPETITION, ACCOUNTABILITY, AND ACTUARIAL SOUNDNESS; TO REQUIRE THE DEPARTMENT OF HEALTH AND HUMAN SERVICES TO IMPLEMENT A PILOT PROJECT TO EVALUATE THE VIABILITY OF PRIVATIZING THE MEDICAID ELIGIBILITY PROCESS; TO ADD SECTION 44-7-75 SO AS TO REQUIRE THE DEPARTMENT OF HEALTH AND HUMAN SERVICES TO CONTRACT FOR THE MANAGEMENT AND OPERATION OF CERTAIN NURSING HOMES FORMERLY UNDER THE DEPARTMENT OF MENTAL HEALTH; AND TO DESIGNATE SECTIONS 1-30-10 THROUGH 1-30-120 AS ARTICLE 1, CHAPTER 30, TITLE 1 AND NAMED "DEPARTMENTS OF STATE GOVERNMENT".

Be it enacted by the General Assembly of the State of South Carolina:

SECTION    1.    This act may be cited as the "Health and Human Services Reorganization and Accountability Act of 2003".

SECTION    2.    Chapter 30, Title 1 of the 1976 Code is amended by adding:

Section 1-30-310.    (A)    Notwithstanding any other provision of law, effective on July 1, 2003, the following agencies, boards, and commissions, including all of the allied, advisory, affiliated, or related entities as well as the employees, funds, property, and all contractual rights and obligations associated with any such agency, except for those subdivisions specifically included under another department, are hereby transferred to the state agency as indicated:

(1)    the Continuum of Care for Emotionally Disturbed Children currently within the Office of the Governor, as provided for in Section 20-7-5610 et seq., is transferred to the Department of Social Services;

(2)    the Department of Alcohol and other Drug Abuse Services, as provided for in Section 44-49-10 et. seq., and the Department of Mental Health as provided in Section 44-9-10 et. seq., are transferred to the Department of Health and Human Services which shall establish and employ a director for:

(a)    the Office of Alcohol and Other Drug Abuse Services; and

(b)    the Division of Mental Health.

The South Carolina Mental Health Commission shall serve in an advisory capacity to the Department of Health and Human Services.

(3)    The inpatient alcohol and drug treatment facilities operated by the Department of Vocational Rehabilitation and known as Holmesview Center and Palmetto Center and the inpatient alcohol and drug treatment facility operated by the Department of Mental Health are transferred to the Office of Alcohol and Other Drug Abuse Services within the Department of Health and Human Services.

(4)    the South Carolina Commission for the Blind, as provided for in Section 43-25-10 et. seq., is transferred to the Department of Vocational Rehabilitation and the board for the South Carolina Commission for the Blind shall serve in advisory capacity to the Department of Vocational Rehabilitation.

(B)    Nothing in this section may be construed to affect the authority, duties, and responsibilities of the boards for the local:

(a)    commission on alcohol and other drug abuse services;

(b)    community mental health centers.

However, these boards must report to their respective office and division directors within the Department of Health and Human Services.

Section 1-30-320.    (A)    It is the intent of the General Assembly in reorganizing and consolidating these agencies to improve the communication, coordination, and cooperation of the employees employed by these agencies in order to provide accessible, quality services. In keeping with this purpose, the agency heads must be evaluated annually on their leadership and accomplishments in establishing clear lines of authority, staff training and competence, evaluation, and a cost benefit analysis of all of its programs.

(B)    It is also the intent of the General Assembly in reorganizing these agencies that the following principles apply:

(1)    minimal disruption of services to the public;

(2)    the elimination of duplication of operations;

(3)    the consolidation of services and programs;

(4)    the establishment of clear lines of authority;

(5)    the achievement of cost efficiency; and

(6)    the integration of program application and eligibility determination processes to the fullest extent possible.

Section 1-30-330.    (A)    The Executive Director of the State Budget and Control Board and the agencies reporting to the executive director shall assist with the implementation of the reorganization provided for in this article. The affected agencies shall cooperate with this reorganization plan.

(B)    The Executive Director of the Budget and Control Board shall provide for the orderly transfer of appropriated funds for these agencies, offices, services, and programs consistent with reorganization as set forth in this article. The executive director, in consultation with affected agencies, has final decision-making authority with regards to the realignment of appropriations to carry out the provisions of this article. The reorganization must proceed in a manner and on a schedule as prescribed by the State Budget and Control Board as soon as practicable.

Section 1-30-340.    The state directors of all health and human service agencies, which include the Department of Social Services, the Department of Health and Human Services, the Department of Disabilities and Special Needs, the Department of Vocational Rehabilitation, and the Department of Health and Environmental Control may require offices within their respective jurisdiction to:

(1)    locate all or a portion of the agency's employees and programs in the same building as another office or at a location near or adjacent to the location of another health and human services office;

(2)    ensure that the agency's location is accessible to disabled employees and agency clients; and

(3)    consolidate agency support services, including clerical and administrative support services and information resources support services, with support services provided to or by another health and human services office. The state directors of all health and human service agencies are directed to post on the agency's respective web sites, the agency's progress in meeting these objectives."

SECTION    3.    Chapter 30, Title 1 of the 1976 Code is amended by adding:

Section 1-30-510.    There is created the Department of Information Technology for Health and Human Services Agencies. The Governor shall appoint the director of the department with the advice and consent of the Senate. The director must have training and experience in the field of information technology planning, administration, and operations.

Section 1-30-520.    (A)    The department is responsible for the management and administration of all information technologies, including information technology appropriations, other funding, and contracting, for the:

(1)    Department of Social Services, including the Office of Continuum of Care for Emotionally Disturbed Children;

(2)    Department of Health and Human Services, including the Office of Alcohol and Other Drug Abuse Services and the Division of Mental Health;

(3)    Department of Disabilities and Special Needs;

(4)    Vocational Rehabilitation, including those programs formerly operated by the Commission for the Blind; and

(5)    Department of Health and Environmental Control.

(B)    The director has final approval for all proposed expenditures. A director of an agency enumerated in subsection(A) may appeal decisions regarding information technologies to the State Budget and Control Board for consideration. Decisions by the board on these matters are final.

Section 1-30-530.    In carrying out the responsibilities of this article the director shall:

(1)        develop a coordinated strategic plan for information resources management that;

(a)    covers a multi-year period;

(b)    defines objectives for information resources management at each health and human services agency;

(c)    prioritizes information resources projects and implementation of new technology for all health and human services agencies;

(d)    integrates planning and development of each information resources system used by a health and human services agency into a coordinated information resources management planning and development system established by the commission;

(e)    establishes standards for information resources system security and that promotes the ability of information resources systems to operate with each other; and

(f)    achieves economies of scale and related benefits in purchasing for health and human services information resources systems;

(2)    establish information resources management policies, procedures, and technical standards and ensure compliance with those policies, procedures, and standards; and

(3)    review and approve the information resources management and operating plan of each health and human services agency; and no later than December 15 of each year, the director shall post the plan on the department's web site.

Section 1-30-540.    The director may appoint an information technology advisory committee composed of information resources managers for state agencies and for private employers which may advise the director regarding:

(1)    overall goals and objectives for information resources management for all health and human services agencies;

(2)    coordination of agency information resources management plans;

(3)    development of short-term and long-term strategies for:

(a)    implementing information resources management policies, procedures, and technical standards;

(b)    ensuring compatibility of information resources systems across health and human services agencies as technology changes;

(4)    information resources training and skill development for health and human services agency employees and policies to facilitate recruitment and retention of trained employees;

(5)    standards for determining:

(a)    the circumstances in which obtaining information resources services under contract is appropriate;

(b)    the information resources services functions that must be performed by health and human services agency information resources services employees; and

(c)    the information resources services skills that must be maintained by health and human services agency information resources services employees;

(6)    optimization of the use of information resources technology that is in place at health and human services agencies;         (7)    existing and potential future information resources technologies and practices and the usefulness of those technologies and practices to health and human services agencies; and

(8)    shall review and make recommendations to the committee relating to the consolidation and improved efficiency of information resources management functions, including:

(a)    cooperative leasing of information resources systems equipment;

(b)    consolidation of data centers;

(c)    improved network operations;

(d)    technical support functions, including help desk services, call centers, and data warehouses;

(e)    administrative applications;

(f)    purchases of standard software;

(g)    joint training efforts;

(h)    recruitment and retention of trained agency employees;

(i)        video conferencing; and

(j)     other related opportunities for improved efficiency."

SECTION    4.    Title 2 of the 1976 Code is amended by adding:

Section 2-64-10.    There is established the Joint Legislative Committee on Health and Human Services composed of six members, three members of the Senate appointed by the Chairman of the Senate Finance Committee and three members of the House of Representatives appointed by the Chairman of the House Ways and Means Committee.

Section 2-64-20.    (A)    In carrying out its responsibilities under this chapter, the committee shall:

(1)    make a detailed and careful study of the State Medicaid Plan, the federal laws pertaining to the Medicaid program, and all laws of the State which have a bearing upon the Medicaid program;

(2)    review the state Medicaid program's compliance with state and federal laws, regulations, and other requirements.

(3)    compare the state Medicaid program with the Medicaid program structures of other states;

(4)    recommend changes in the Medicaid program structure regarding eligibility, type, scope, and duration of services, together with predicted General Fund revenue, to make the State Medicaid Plan more stable and affordable for the taxpayers of the State;

(5)    provide for the revision of state laws and the State Medicaid Plan to develop a more easily understood, financially manageable, and stable system;

(6)    review efforts of the state Medicaid agency such as:

(a)    cost containment measures;

(b)    fiscal and program accountability;

(c)    quality of care;

(d)    effective coordination of all health care providers and payers;

(e)    performance measurement and reporting; and

(f)    detection of fraud and abuse.

(7)    submit reports and recommendations annually to the Governor and the General Assembly for improving state health care policy and financing and other recommendations as may be appropriate.

(B)    In carrying out its responsibilities under this chapter, the committee may:

(1)    hold public hearings;

(2)    receive testimony of any employee of the State or any other witness who may assist the committee in its duties;

(3)    call for assistance in the performance of its duties from any employee or agency of the State or any of its political subdivisions;

(4)    employ consultants to assist the committee in accomplishing its duties.

Section 2-64-30.    The committee may adopt by majority vote rules not inconsistent with this chapter that it considers proper with respect to matters relating to the discharge of its duties under this section. Professional and clerical services for the committee must be made available from the staffs of the General Assembly, the Budget and Control Board, and the Department of Health and Human Services.

Section 2-64-40.    Expenses of the committee may be paid from appropriated funds of the House of Representatives upon approval of the Speaker of the House and from appropriated funds of the Senate upon approval of the President Pro Tempore of the Senate."

SECTION    5.    Chapter 6, Title 44 of the 1976 Code is amended by adding:

Section 44-6-1010.    (A)    There is established the Office of Inspector General (Office) for the Department of Health and Human Services for the purpose of:

(1)    conducting independent and objective audits, reviews, investigations, and inspections;

(2)    preventing and detecting waste, fraud, and abuse;

(3)    promoting accountability, economy, effectiveness, and efficiency.

(B)    The inspector general must be appointed by and under the direction of the Joint Legislative Committee on Health and Human Services, established pursuant to Section 2-64-10. The inspector general must be appointed without regard to political affiliation and solely on the basis of integrity, related experience, and demonstrated ability in accounting, auditing, financial analysis, and management analysis.

Section 44-6-1020.    In carrying out the duties of the office the inspector general may:

(1)    conduct audits, reviews, analyses, investigations, and inspections relating to the administration and operation of all programs administered by the department;

(2)    under authority currently residing with the department, conduct audits, reviews, analyses, investigations, and inspections of providers, recipients, and other entities doing business with the department to determine compliance with applicable departmental contracts and regulations and to detect related fraud and abuse;

(3)    receive and investigate complaints concerning possible violations of regulations or law, gross mismanagement, fraud, waste, or abuse. The office may not disclose the identity of an individual submitting a complaint unless the disclosure is unavoidable during the course of an investigation;

(4)    issue evaluation and audit reports in accordance with professional standards;

(5)    have direct access to all systems, records, reports, reviews, files, documents, papers, and similar information related to the programs and operations of the department and entities doing business with the department;

(6)    request information and assistance as necessary from any state, federal, or local agency;

(7)    to the extent, and in such amounts as provided under this section and the annual general appropriations act, enter into contracts and make payments for necessary staff and resources;

(8)    collect directly or to instruct the department to collect or withhold amounts related to fraud and abuse findings.

Section 44-6-1030.    The Inspector General, no less than semi-annually and more frequently at the request of the committee chair, shall provide to the Joint Legislative Committee on Health and Human Services a:

(1)    description of significant problems, abuses, and deficiencies encountered in the administration and operation of departmental programs along with recommendations of corrective action;

(2)    listing of each audit report issued during the period along with estimates for the dollar value of questioned costs;

(3)    report on each recommendation issued in a prior audit report, over six months old, to which the appropriate entity has not complied;

(4)    status report on fraud and abuse activity that includes case volumes, collections, results of reviews and investigations, and referrals to the Attorney General or other prosecutorial and law enforcement authorities;

(5)    status report on the annual audit plan that provides progress on current reviews as well as known intended reviews and their completion dates;

(6)    other information as requested by the committee.

Section 44-6-1040.    The Inspector General, in carrying out these duties and responsibilities, shall make every attempt to avoid duplication and ensure effective coordination and cooperation. Nothing in this section is intended to duplicate the activity of the State Auditor, or the Attorney General's Medicaid Fraud Control Unit, or the Legislative Audit Council.

Section 44-6-1050.    The Inspector General shall immediately report to the committee chair and the director of the department any extraordinary egregious and flagrant problems or fraud and abuse.

Section 44-6-1060.    The existing fraud and abuse staff, eligibility quality control staff, and internal audit staff within the department are transferred to the Inspector General's Office along with all affiliated authority. All equipment, systems, and other necessary components of operations are included in this transfer. Additionally, related personal service, direct administrative, and prorata indirect appropriations accompany the transfer. The department, in accordance with a prescribed cost allocation plan, shall draw and transfer related federal and other funds on behalf of the Inspector General's Office. The department shall continue to provide appropriations, office space, equipment, communications equipment, services, and supplies until practical transfer can occur.

Section 44-6-1070.    The Inspector General is authorized to retain or receive one-half of all fraud and abuse collections to further enhance its fraud and abuse detection capabilities."

SECTION    6.    Chapter 2, Title 12 of the 1976 Code is amended by adding:

"Section 12-2-100.    By July 1, 2003, the Department of Revenue shall implement electronic interface between information systems that will enable the Department of Health and Human Services to electronically obtain income and related financial information of residents of the State from the department for the purpose of assisting the Department of Health and Human Services in making eligibility determinations of persons applying for Medicaid coverage."

SECTION    7.    Article 1, Chapter 71, Title 38 of the 1976 Code is amended by adding:

"Section 38-71-270.    An insurer, including a health maintenance organization, providing health insurance to residents of this State shall submit the names and other identifying information of its insureds to the Department of Insurance in the manner and time prescribed by the department. The department shall submit this information to the Department of Health and Human Services to be used to identify Medicaid applicants who have other health insurance coverage."

SECTION    8.    Article 1, Chapter 6, Title 44 of the 1976 Code is amended by adding:

"Section 44-6-75.    (A) By November 15 of each year, the Director of the Department of Health and Human Services shall submit in writing to each member of the Budget and Control Board, a 'Medicaid Cost Containment Action Plan' on the projected expenditures for the state Medicaid program for the next fiscal year. The action plan must include:

(1)    a description of each action to be taken;

(2)    the number of individuals affected;

(3)    the Medicaid services or programs affected;

(4)    an estimate of the financial impact on the Medicaid program for the fiscal year in question; and

(5)    other information as directed by the board.

(B)    Upon receipt of the report, and if the report calls for actions to reduce projected spending within this limitation, the action plan must be implemented by the director. However, the action plan must not be implemented if, by separate legislation, the General Assembly enacts legislation with a two-thirds vote in each body, specifically calling for a suspension of the Medicaid Cost Containment Action Plan that would reduce Medicaid expenditures.

(C)    If the director informs the Budget and Control Board that general fund expenditures that match federal Medicaid dollars are projected to increase over the current fiscal year by a percentage greater than projected percentage growth of the state's total general fund, the director shall inform the board, in priority order, of the actions to be taken by the department to reduce expenditures in the Medicaid program for the following fiscal year so as to not exceed an amount equal to the percentage growth of the state's general fund revenue for that fiscal year as estimated by the Board of Economic Advisors."

SECTION    9.    (A)    This section may be known as the "South Carolina Medicaid Mandatory Managed Care Pilot Program".

(B)    The South Carolina Department of Health and Human Services shall implement a mandatory managed care enrollment pilot program in Charleston, Florence, Greenville, and Richland Counties before June 1, 2003. The pilot program shall operate for a five-year period unless the program fails to demonstrate budget neutrality over the life of the project.

(C)    The department shall provide for a health care delivery system that includes, but is not limited to, Health Maintenance Organizations (HMOs) and Primary Care Case Management (PCCM) Providers who can deliver health care services and provide options to state Medicaid recipients, including all individuals who fall under the Temporary Assistance to Needy Families (TANF) and Supplemental Omnibus Budget Reconciliation Act (SOBRA) categories.

(D)    To ensure competition, accountability, and the actuarial soundness of this pilot program, the joint legislative committee with jurisdictional oversight shall require the department to designate a third-party actuary to establish the HMO and PCCM rates effective January 2003, with annual updates based on actuarially sound business methods and projected cost savings to the State. The joint committee maintains the responsibility to evaluate the project and shall engage a nationally recognized organization to evaluate annually. This evaluation must include, but is not limited to, state specific and cross-state analyses of the impact on utilization, cost trends, recipient coverage, public and private expenditures, quality, access, and satisfaction.

(E)    The department shall enroll Medicaid recipients into either a participating HMO fully licensed by the Department of Insurance or the state's Physicians Enhancement Program (PEP) in the designated pilot counties. Recipients in the counties served by the pilot program must be notified by the department about enrollment options and must be given sixty days to choose a medical home through either a HMO or PCCM delivery system. After sixty days, those not responding must be auto-assigned by the department. HMO's participating in the waiver program must meet all network requirements.

(F)    In order to ensure accountability, all HMO and PCCM participants must be held to the same nationally recognized standards, including credentialing, quality improvement, network adequacy, outreach, and education. The South Carolina Department of Insurance, consistent with community standards, shall conduct all network adequacy monitoring, and the department shall rely on the South Carolina Department of Insurance to avoid duplication of oversight cost.

(G)    The department shall provide for a health care delivery system that includes, but is not limited to, Health Maintenance Organizations (HMOs) and Primary Care Case Management (PCCM) Providers who can deliver health care services and provide options to state Medicaid recipients including all individuals who fall under the Temporary Assistance to Needy Families and Supplemental Omnibus Budget Reconciliation Act categories.

SECTION    10.    Before November 1, 2003, the department shall implement a pilot project to assess the viability of privatizing the determination of Medicaid eligibility. This pilot project must be implemented in at least four major metropolitan areas of the State and may test both partial and total privatization of the eligibility process. The data must be collected and analyzed to evaluate the integrity of a privatized process.

SECTION    11.    Article 1, Chapter 7, Title 44 of the 1976 Code is amended by adding:

"Section 44-7-75.    The Department of Health and Human Services shall enter into contractual agreements for the management and operation of skilled nursing facilities formerly under the jurisdiction of the Department of Mental Health."

SECTION    12.    Sections 1-30-10 through 1-30-120 are designated as Article 1, Chapter 30, Title 1 of the 1976 Code and named "Departments of State Government".

SECTION    13.    This act takes effect upon approval by the Governor unless otherwise provided for in this act.