(a) The department shall contract with one or more third parties to implement one or more coordinated care demonstration projects for recipients of medical assistance identified by the department. The purpose of a demonstration project under this section is to assess the efficacy of a proposed health care delivery model with respect to cost for, access to, and quality of care for medical assistance recipients. The department may contract for separate demonstration projects to coordinate care for different groups of medical assistance recipients to achieve more effective care for recipients at greater cost savings for the medical assistance program. The department shall request proposals for at least one project under this section on or before December 31, 2016, and may annually request proposals for additional projects under this section thereafter. The department may use an innovative procurement process as described under AS 36.30.308 to award a contract for a project under this section. A proposal for a demonstration project under this section must be submitted to the committee established under (b) of this section and must include three or more of the following elements:

(1) comprehensive primary-care-based management for medical assistance services, including behavioral health services and coordination of long-term services and support;

(2) care coordination, including the assignment of a primary care provider located in the local geographic area of the recipient, to the extent practical;

(3) health promotion;

(4) comprehensive transitional care and follow-up care after inpatient treatment;

(5) referral to community and social support services, including career and education training services available through the Department of Labor and Workforce Development under AS 23.15, the University of Alaska, or other sources;

(6) sustainability and the ability to achieve similar results in other regions of the state;

(7) integration and coordination of benefits, services, and utilization management;

(8) local accountability for health and resource allocation;

(9) an innovative payment process, including bundled payments or global payments.

(b) A project review committee is established in the department for the purpose of reviewing proposals for demonstration projects under this section. The project review committee consists of

(1) the commissioner of the department, or the commissioner's designee;

(2) the commissioner of administration, or the commissioner's designee;

(3) the chief executive officer of the Alaska Mental Health Trust Authority, or the chief executive officer's designee, who shall serve as chair of the committee;

(4) two representatives of stakeholder groups, appointed by the governor for staggered three-year terms, as follows:

(A) one representative of a stakeholder group who has direct experience with health plan management and cost control for the medical assistance population;

(B) one representative of a stakeholder group who has direct experience with health plan management and cost control for a nongovernment employer of 500 or more employees in the state;

(5) a nonvoting member who is a member of the senate, appointed by the president of the senate; and

(6) a nonvoting member who is a member of the house of representatives, appointed by the speaker of the house of representatives.

(c) The department may contract with a managed care organization, primary care case manager, accountable care organization, prepaid ambulatory health plan, or provider-led entity to implement a demonstration project under this section. The fee structure for a contract under this subsection may include global payments, bundled payments, capitated payments, shared savings and risk, or other payment structures. The department shall work with the division of insurance, Department of Commerce, Community, and Economic Development, to streamline the application process for a company to obtain a certificate of authority required under AS 21.09.010 as necessary to participate in a demonstration project under this section.

(d) A proposal for a demonstration project under this section must include, in addition to the elements required under (a) of this section, information demonstrating how the project will implement additional cost-saving measures, including innovations to reduce the cost of care for medical assistance recipients through the expanded use of telehealth for primary care, urgent care, and behavioral health services. The department shall identify legal or cost barriers preventing the expanded use of telehealth and shall recommend remedies for identified barriers.

(e) The department shall contract with a third-party actuary to review demonstration projects established under this section. The actuary shall review each demonstration project after two years of implementation and make recommendations for the implementation of a similar project on a statewide basis. The actuary shall evaluate each project based on cost savings for the medical assistance program, health outcomes for participants in the project, and the ability to achieve similar results on a statewide basis. On or before December 31 of each year, starting in 2018, the actuary shall submit a final report to the department regarding any demonstration project that has been in operation for at least two years.

(f) The department shall prepare a plan regarding regional or statewide implementation of a coordinated care project based on the results of the demonstration projects under this section. On or before November 15, 2019, the department shall submit the plan to the senate secretary and the chief clerk of the house of representatives and notify the legislature that the plan is available. On or before November 15 of each year thereafter, the department shall submit a report regarding any changes or recommendations regarding the plan developed under this subsection to the senate secretary and the chief clerk of the house of representatives and notify the legislature that the report is available.

(g) In this section, “telehealth” has the meaning given in AS 47.05.270(e).