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2    WHEREAS, The Medicaid program in Illinois has an immense,
3and growing, impact, both in terms of taxpayer dollars and the
4effect it has on citizens across the State; and
5    WHEREAS, State resources for healthcare services are
6currently so scarce that many healthcare providers are
7discontinuing services, leading to a profoundly detrimental
8impact on our communities; and
9    WHEREAS, Enrollment under the Illinois Department of
10Healthcare and Family Services' Medical Assistance Programs
11(Medicaid) exceeds three million; and
12    WHEREAS, A sizable portion of the Medicaid population is
13currently enrolled, often mandatorily, in Managed Care
14Organizations (MCOs), making outlays to MCOS, measured in
15billions of dollars, one of the largest resource uses in the
16State; and
17    WHEREAS, There has been little information disseminated to
18the General Assembly in terms of how State resources are being
19spent on MCOs and on the overall healthcare outcomes for
20individuals enrolled in these MCOs; and



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1    WHEREAS, In this quickly evolving environment, the General
2Assembly must stay engaged in Medicaid funding and
3corresponding healthcare outcome issues and must be prepared to
4make legislative and administrative recommendations;
5therefore, be it
8Auditor General is directed to conduct an audit of Medicaid
9MCOs, which includes a comparison of State expenditures between
10MCOs and fee-for-service entities; and be it further
11    RESOLVED, That the audit shall examine capitation rate
12setting and reimbursement issues for Medicaid MCOs for fiscal
13year 2015 with respect to the following issues:
14        (1) Compare the total dollar amount of all reported
15    encounter data submitted to the Illinois Department of
16    Family Services (DHFS) during SFY 2015 to the total dollar
17    amount of reported claims payments made on behalf of
18    Illinois Medicaid individuals by MCOs as reported to DHFS
19    during SPY 2015;
20        (2) Whether encounter data is used by the Department of
21    Healthcare and Family Services (DHFS) to set capitation
22    rates;



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1        (3) Calculate the aggregate amount of MCO capitation
2    payments made by DHFS during SFY2015 (exclude Hospital
3    Assessment pass-through payments from this calculation);
4        (4) The amount of payments made by DHFS to reimburse
5    for-profit MCOs for the ACA Health Insurance Fee (HIP);
6    determine if this HIP payment is mandated by federal CMS;
7        (5) The amount of payments made by DHFS to reimburse
8    for-profit MCOs for "gros-sup" related to the HIP payment;
9    determine the purpose of the "gross-up" payments;
10        (6) The incidence to which the MCO capitation rates
11    contain supplemental, ORF-based payments to providers; for
12    these payments, determine the amount of the supplemental,
13    which providers received these payments, and whether these
14    monies were directly tied to services actually provided (do
15    not include payments associated with the Hospital
16    Assessment Program);
17        (7) What administrative costs are paid to MCOs in terms
18    of total dollars and percent of overall MCO medical
19    based-payments;
20        (8) What is the overall average medical loss ratio



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1    (MLR) for all MCOs in aggregate and for each MCO
2    individually; for the purposes of this audit, MLR is
3    defined as all paid claims made by MCOs as reported to HFS
4    for state fiscal year 2015 divided by aggregate MCO
5    capitation payments made by DHFS during the fiscal year;
6        (9) What the denial rates are for MCOs and for
7    fee-for-service providers billing the DHFS; determine
8    whether there is a higher denial rate for services paid by
9    MCOs; and
10        (10) To the extent information is available, determine
11    how Illinois' rate setting methodology compares to other
12    comparable states; and be it further
13    RESOLVED, That the Illinois Department of Healthcare and
14Family Services and any other State agency having information
15relevant to this audit cooperate fully and promptly with the
16Auditor General's Office in its conduct; and be it further
17    RESOLVED, That the Auditor General commence this audit as
18soon as possible and report his findings and recommendations
19upon completion in accordance with the provisions of Section
203-14 of the Illinois State Auditing Act.