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.


LRB103 24848 KTG 51181 b

 

 

A BILL FOR

 

SB1965LRB103 24848 KTG 51181 b

1    AN ACT concerning public aid.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Public Aid Code is amended by
5changing Section 5-30.8 as follows:
 
6    (305 ILCS 5/5-30.8)
7    Sec. 5-30.8. Managed care organization rate transparency.
8    (a) For the establishment of managed care organization
9(MCO) capitation base rate payments from the State, including,
10but not limited to: (i) hospital fee schedule reforms and
11updates, (ii) rates related to a single State-mandated
12preferred drug list, (iii) rate updates related to the State's
13preferred drug list, (iv) inclusion of coverage for children
14with special needs, (v) inclusion of coverage for children
15within the child welfare system, (vi) annual MCO capitation
16rates, and (vii) any retroactive provider fee schedule
17adjustments or other changes required by legislation or other
18actions, the Department of Healthcare and Family Services
19shall implement a capitation base rate setting process
20beginning on July 27, 2018 (the effective date of Public Act
21100-646) which shall include all of the following elements of
22transparency:
23        (1) The Department shall include participating MCOs

 

 

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1    and a statewide trade association representing a majority
2    of participating MCOs in meetings to discuss the impact to
3    base capitation rates as a result of any new or updated
4    hospital fee schedules or other provider fee schedules.
5    Additionally, the Department shall share any data or
6    reports used to develop MCO capitation rates with
7    participating MCOs. This data shall be comprehensive
8    enough for MCO actuaries to recreate and verify the
9    accuracy of the capitation base rate build-up.
10        (2) The Department shall not limit the number of
11    experts that each MCO is allowed to bring to the draft
12    capitation base rate meeting or the final capitation base
13    rate review meeting. Draft and final capitation base rate
14    review meetings shall be held in at least 2 locations.
15        (3) The Department and its contracted actuary shall
16    meet with all participating MCOs simultaneously and
17    together along with consulting actuaries contracted with
18    statewide trade association representing a majority of
19    Medicaid health plans at the request of the plans.
20    Participating MCOs shall additionally, at their request,
21    be granted individual capitation rate development meetings
22    with the Department.
23        (4) (Blank). Any quality incentive or other incentive
24    withholding of any portion of the actuarially certified
25    capitation rates must be budget-neutral. The entirety of
26    any aggregate withheld amounts must be returned to the

 

 

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1    MCOs in proportion to their performance on the relevant
2    performance metric. No amounts shall be returned to the
3    Department if all performance measures are not achieved to
4    the extent allowable by federal law and regulations.
5        (5) Upon request, the Department shall provide written
6    responses to questions regarding MCO capitation base
7    rates, the capitation base development methodology, and
8    MCO capitation rate data, and all other requests regarding
9    capitation rates from MCOs. Upon request, the Department
10    shall also provide to the MCOs materials used in
11    incorporating provider fee schedules into base capitation
12    rates.
13    (b) For the development of capitation base rates for new
14capitation rate years:
15        (1) The Department shall take into account emerging
16    experience in the development of the annual MCO capitation
17    base rates, including, but not limited to, current-year
18    cost and utilization trends observed by MCOs in an
19    actuarially sound manner and in accordance with federal
20    law and regulations.
21        (2) No later than January 1 of each year, the
22    Department shall release an agreed upon annual calendar
23    that outlines dates for capitation rate setting meetings
24    for that year. The calendar shall include at least the
25    following meetings and deadlines:
26            (A) An initial meeting for the Department to

 

 

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1        review MCO data and draft rate assumptions to be used
2        in the development of capitation base rates for the
3        following year.
4            (B) A draft rate meeting after the Department
5        provides the MCOs with the draft capitation base rates
6        to discuss, review, and seek feedback regarding the
7        draft capitation base rates.
8        (3) Prior to the submission of final capitation rates
9    to the federal Centers for Medicare and Medicaid Services,
10    the Department shall provide the MCOs with a final
11    actuarial report including the final capitation base rates
12    for the following year and subsequently conduct a final
13    capitation base review meeting. Final capitation rates
14    shall be marked final.
15    (c) For the development of capitation base rates
16reflecting policy changes:
17        (1) Unless contrary to federal law and regulation, the
18    Department must provide notice to MCOs of any significant
19    operational policy change no later than 60 days prior to
20    the effective date of an operational policy change in
21    order to give MCOs time to prepare for and implement the
22    operational policy change and to ensure that the quality
23    and delivery of enrollee health care is not disrupted.
24    "Operational policy change" means a change to operational
25    requirements such as reporting formats, encounter
26    submission definitional changes, or required provider

 

 

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1    interfaces made at the sole discretion of the Department
2    and not required by legislation with a retroactive
3    effective date. Nothing in this Section shall be construed
4    as a requirement to delay or prohibit implementation of
5    policy changes that impact enrollee benefits as determined
6    in the sole discretion of the Department.
7        (2) No later than 60 days after the effective date of
8    the policy change or program implementation, the
9    Department shall meet with the MCOs regarding the initial
10    data collection needed to establish capitation base rates
11    for the policy change. Additionally, the Department shall
12    share with the participating MCOs what other data is
13    needed to estimate the change and the processes for
14    collection of that data that shall be utilized to develop
15    capitation base rates.
16        (3) No later than 60 days after the effective date of
17    the policy change or program implementation, the
18    Department shall meet with MCOs to review data and the
19    Department's written draft assumptions to be used in
20    development of capitation base rates for the policy
21    change, and shall provide opportunities for questions to
22    be asked and answered.
23        (4) No later than 60 days after the effective date of
24    the policy change or program implementation, the
25    Department shall provide the MCOs with draft capitation
26    base rates and shall also conduct a draft capitation base

 

 

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1    rate meeting with MCOs to discuss, review, and seek
2    feedback regarding the draft capitation base rates.
3    (d) For the development of capitation base rates for
4retroactive policy or fee schedule changes:
5        (1) The Department shall meet with the MCOs regarding
6    the initial data collection needed to establish capitation
7    base rates for the policy change. Additionally, the
8    Department shall share with the participating MCOs what
9    other data is needed to estimate the change and the
10    processes for collection of the data that shall be
11    utilized to develop capitation base rates.
12        (2) The Department shall meet with MCOs to review data
13    and the Department's written draft assumptions to be used
14    in development of capitation base rates for the policy
15    change. The Department shall provide opportunities for
16    questions to be asked and answered.
17        (3) The Department shall provide the MCOs with draft
18    capitation rates and shall also conduct a draft rate
19    meeting with MCOs to discuss, review, and seek feedback
20    regarding the draft capitation base rates.
21        (4) The Department shall inform MCOs no less than
22    quarterly of upcoming benefit and policy changes to the
23    Medicaid program.
24    (e) Meetings of the group established to discuss Medicaid
25capitation rates under this Section shall be closed to the
26public and shall not be subject to the Open Meetings Act.

 

 

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1Records and information produced by the group established to
2discuss Medicaid capitation rates under this Section shall be
3confidential and not subject to the Freedom of Information
4Act.
5(Source: P.A. 100-646, eff. 7-27-18; 101-81, eff. 7-12-19.)