SB1965 103RD GENERAL ASSEMBLY

LRB103 24848 KTG 51181 b

103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB1965

Introduced 2/9/2023, by Sen. Ann Gillespie

SYNOPSIS AS INTRODUCED:

305 ILCS 5/5-30.8

Amends the Medical Assistance Article of the Illinois Public Aid Code. In provisions requiring the Department of Healthcare and Family Services to implement a capitation base rate setting process for payments to managed care organizations (MCOs), removes the following requirements: (i) that any quality incentive or other incentive withholding of any portion of the actuarially certified capitation rates must be budget-neutral; (ii) that the entirety of any aggregate withheld amounts must be returned to the MCOs in proportion to their performance on the relevant performance metric; and (iii) that no amounts shall be returned to the Department if all performance measures are not achieved to the extent allowable by federal law and regulations.

A BILL FOR

AN ACT concerning public aid.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Illinois Public Aid Code is amended by changing Section 5-30.8 as follows:

(305 ILCS 5/5-30.8)

Sec. 5-30.8. Managed care organization rate transparency.

(a) For the establishment of managed care organization (MCO) capitation base rate payments from the State, including, but not limited to: (i) hospital fee schedule reforms and updates, (ii) rates related to a single State-mandated preferred drug list, (iii) rate updates related to the State's preferred drug list, (iv) inclusion of coverage for children with special needs, (v) inclusion of coverage for children within the child welfare system, (vi) annual MCO capitation rates, and (vii) any retroactive provider fee schedule adjustments or other changes required by legislation or other actions, the Department of Healthcare and Family Services shall implement a capitation base rate setting process beginning on July 27, 2018 (the effective date of Public Act 100-646) which shall include all of the following elements of transparency:

(1) The Department shall include participating MCOs and a statewide trade association representing a majority of participating MCOs in meetings to discuss the impact to base capitation rates as a result of any new or updated hospital fee schedules or other provider fee schedules. Additionally, the Department shall share any data or reports used to develop MCO capitation rates with participating MCOs. This data shall be comprehensive enough for MCO actuaries to recreate and verify the accuracy of the capitation base rate build-up.

(2) The Department shall not limit the number of experts that each MCO is allowed to bring to the draft capitation base rate meeting or the final capitation base rate review meeting. Draft and final capitation base rate review meetings shall be held in at least 2 locations.

(3) The Department and its contracted actuary shall meet with all participating MCOs simultaneously and together along with consulting actuaries contracted with statewide trade association representing a majority of Medicaid health plans at the request of the plans. Participating MCOs shall additionally, at their request, be granted individual capitation rate development meetings with the Department.

(4) (Blank). Any quality incentive or other incentive withholding of any portion of the actuarially certified capitation rates must be budget-neutral. The entirety of any aggregate withheld amounts must be returned to the MCOs in proportion to their performance on the relevant performance metric. No amounts shall be returned to the Department if all performance measures are not achieved to the extent allowable by federal law and regulations.

(5) Upon request, the Department shall provide written responses to questions regarding MCO capitation base rates, the capitation base development methodology, and MCO capitation rate data, and all other requests regarding capitation rates from MCOs. Upon request, the Department shall also provide to the MCOs materials used in incorporating provider fee schedules into base capitation rates.

(b) For the development of capitation base rates for new capitation rate years:

(1) The Department shall take into account emerging experience in the development of the annual MCO capitation base rates, including, but not limited to, current-year cost and utilization trends observed by MCOs in an actuarially sound manner and in accordance with federal law and regulations.

(2) No later than January 1 of each year, the Department shall release an agreed upon annual calendar that outlines dates for capitation rate setting meetings for that year. The calendar shall include at least the following meetings and deadlines:

(A) An initial meeting for the Department to review MCO data and draft rate assumptions to be used in the development of capitation base rates for the following year.

(B) A draft rate meeting after the Department provides the MCOs with the draft capitation base rates to discuss, review, and seek feedback regarding the draft capitation base rates.

(3) Prior to the submission of final capitation rates to the federal Centers for Medicare and Medicaid Services, the Department shall provide the MCOs with a final actuarial report including the final capitation base rates for the following year and subsequently conduct a final capitation base review meeting. Final capitation rates shall be marked final.

(c) For the development of capitation base rates reflecting policy changes:

(1) Unless contrary to federal law and regulation, the Department must provide notice to MCOs of any significant operational policy change no later than 60 days prior to the effective date of an operational policy change in order to give MCOs time to prepare for and implement the operational policy change and to ensure that the quality and delivery of enrollee health care is not disrupted. "Operational policy change" means a change to operational requirements such as reporting formats, encounter submission definitional changes, or required provider interfaces made at the sole discretion of the Department and not required by legislation with a retroactive effective date. Nothing in this Section shall be construed as a requirement to delay or prohibit implementation of policy changes that impact enrollee benefits as determined in the sole discretion of the Department.

(2) No later than 60 days after the effective date of the policy change or program implementation, the Department shall meet with the MCOs regarding the initial data collection needed to establish capitation base rates for the policy change. Additionally, the Department shall share with the participating MCOs what other data is needed to estimate the change and the processes for collection of that data that shall be utilized to develop capitation base rates.

(3) No later than 60 days after the effective date of the policy change or program implementation, the Department shall meet with MCOs to review data and the Department's written draft assumptions to be used in development of capitation base rates for the policy change, and shall provide opportunities for questions to be asked and answered.

(4) No later than 60 days after the effective date of the policy change or program implementation, the Department shall provide the MCOs with draft capitation base rates and shall also conduct a draft capitation base rate meeting with MCOs to discuss, review, and seek feedback regarding the draft capitation base rates.

(d) For the development of capitation base rates for retroactive policy or fee schedule changes:

(1) The Department shall meet with the MCOs regarding the initial data collection needed to establish capitation base rates for the policy change. Additionally, the Department shall share with the participating MCOs what other data is needed to estimate the change and the processes for collection of the data that shall be utilized to develop capitation base rates.

(2) The Department shall meet with MCOs to review data and the Department's written draft assumptions to be used in development of capitation base rates for the policy change. The Department shall provide opportunities for questions to be asked and answered.

(3) The Department shall provide the MCOs with draft capitation rates and shall also conduct a draft rate meeting with MCOs to discuss, review, and seek feedback regarding the draft capitation base rates.

(4) The Department shall inform MCOs no less than quarterly of upcoming benefit and policy changes to the Medicaid program.

(e) Meetings of the group established to discuss Medicaid capitation rates under this Section shall be closed to the public and shall not be subject to the Open Meetings Act. Records and information produced by the group established to discuss Medicaid capitation rates under this Section shall be confidential and not subject to the Freedom of Information Act.

(Source: P.A. 100-646, eff. 7-27-18; 101-81, eff. 7-12-19.)