99TH GENERAL ASSEMBLY State of Illinois 2015 and 2016 HB2596

Introduced , by Rep. Greg Harris

SYNOPSIS AS INTRODUCED:

`305 ILCS 5/5-11`	`from Ch. 23, par. 5-11`
`305 ILCS 5/5-30`

Amends the Medical Assistance Article of the Illinois Public Aid Code. Requires the Department of Healthcare and Family Services, in conjunction with the Department of Insurance, to by rule adopt standards for assessing

the
solvency and financial soundness of each managed care community

network. Provides that any solvency and financial standards adopted for

managed care community
networks
shall be identical to (rather than no more

restrictive than) the solvency and financial standards required under Article II of the Health Maintenance Organization Act (rather than the

solvency and financial standards adopted
under the Social Security Act for

provider-sponsored
organizations). In provisions concerning entities

contracted with the Department of Healthcare and Family Services to coordinate healthcare for medical assistance recipients, provides that the Department shall treat all contracted entities identically in relation to care coordination ratios. Provides that Managed Care Entities are authorized to hire community healthcare workers to meet the mandated care coordination ratios; and that the Department shall define by policy the term "community healthcare workers" no later than January 1, 2016. Requires the Department to treat all contracted entities receiving risk-based capitation payments identically with regards to network adequacy and medical loss ratios. Provides that in conjunction with the Department of Insurance, the Department of Healthcare and Family Services shall ensure that all contracted entities receiving risk-based capitation payments are treated identically with regards to protections against financial insolvency.

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FISCAL NOTE ACT MAY APPLY

A BILL FOR

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1 AN ACT concerning public aid.

2 Be it enacted by the People of the State of Illinois,

3 represented in the General Assembly:

4 Section 5. The Illinois Public Aid Code is amended by

5 changing Sections 5-30 and 5-11 as follows:

6 (305 ILCS 5/5-11) (from Ch. 23, par. 5-11)

7 Sec. 5-11. Co-operative arrangements; contracts with other

8 State agencies, health care and rehabilitation organizations,

9 and fiscal intermediaries.

10 (a) The Illinois Department may enter into co-operative

11 arrangements with State agencies responsible for administering

12 or supervising the administration of health services and

13 vocational rehabilitation services to the end that there may be

14 maximum utilization of such services in the provision of

15 medical assistance.

16 The Illinois Department shall, not later than June 30,

17 1993, enter into one or more co-operative arrangements with the

18 Department of Mental Health and Developmental Disabilities

19 providing that the Department of Mental Health and

20 Developmental Disabilities will be responsible for

21 administering or supervising all programs for services to

22 persons in community care facilities for persons with

23 developmental disabilities, including but not limited to

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1 intermediate care facilities, that are supported by State funds

2 or by funding under Title XIX of the federal Social Security

3 Act. The responsibilities of the Department of Mental Health

4 and Developmental Disabilities under these agreements are

5 transferred to the Department of Human Services as provided in

6 the Department of Human Services Act.

7 The Department may also contract with such State health and

8 rehabilitation agencies and other public or private health care

9 and rehabilitation organizations to act for it in supplying

10 designated medical services to persons eligible therefor under

11 this Article. Any contracts with health services or health

12 maintenance organizations shall be restricted to organizations

13 which have been certified as being in compliance with standards

14 promulgated pursuant to the laws of this State governing the

15 establishment and operation of health services or health

16 maintenance organizations. The Department shall renegotiate

17 the contracts with health maintenance organizations and

18 managed care community networks that took effect August 1,

19 2003, so as to produce $70,000,000 savings to the Department

20 net of resulting increases to the fee-for-service program for

21 State fiscal year 2006. The Department may also contract with

22 insurance companies or other corporate entities serving as

23 fiscal intermediaries in this State for the Federal Government

24 in respect to Medicare payments under Title XVIII of the

25 Federal Social Security Act to act for the Department in paying

26 medical care suppliers. The provisions of Section 9 of "An Act

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1 in relation to State finance", approved June 10, 1919, as

2 amended, notwithstanding, such contracts with State agencies,

3 other health care and rehabilitation organizations, or fiscal

4 intermediaries may provide for advance payments.

5 (b) For purposes of this subsection (b), "managed care

6 community network" means an entity, other than a health

7 maintenance organization, that is owned, operated, or governed

8 by providers of health care services within this State and that

9 provides or arranges primary, secondary, and tertiary managed

10 health care services under contract with the Illinois

11 Department exclusively to persons participating in programs

12 administered by the Illinois Department.

13 The Illinois Department may certify managed care community

14 networks, including managed care community networks owned,

15 operated, managed, or governed by State-funded medical

16 schools, as risk-bearing entities eligible to contract with the

17 Illinois Department as Medicaid managed care organizations.

18 The Illinois Department may contract with those managed care

19 community networks to furnish health care services to or

20 arrange those services for individuals participating in

21 programs administered by the Illinois Department. The rates for

22 those provider-sponsored organizations may be determined on a

23 prepaid, capitated basis. A managed care community network may

24 choose to contract with the Illinois Department to provide only

25 pediatric health care services. The Illinois Department shall

26 by rule adopt the criteria, standards, and procedures by which

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1 a managed care community network may be permitted to contract

2 with the Illinois Department and shall consult with the

3 Department of Insurance in adopting these rules.

4 A county provider as defined in Section 15-1 of this Code

5 may contract with the Illinois Department to provide primary,

6 secondary, or tertiary managed health care services as a

7 managed care community network without the need to establish a

8 separate entity and shall be deemed a managed care community

9 network for purposes of this Code only to the extent it

10 provides services to participating individuals. A county

11 provider is entitled to contract with the Illinois Department

12 with respect to any contracting region located in whole or in

13 part within the county. A county provider is not required to

14 accept enrollees who do not reside within the county.

15 In order to (i) accelerate and facilitate the development

16 of integrated health care in contracting areas outside counties

17 with populations in excess of 3,000,000 and counties adjacent

18 to those counties and (ii) maintain and sustain the high

19 quality of education and residency programs coordinated and

20 associated with local area hospitals, the Illinois Department

21 may develop and implement a demonstration program from managed

22 care community networks owned, operated, managed, or governed

23 by State-funded medical schools. The Illinois Department shall

24 prescribe by rule the criteria, standards, and procedures for

25 effecting this demonstration program.

26 A managed care community network that contracts with the

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1 Illinois Department to furnish health care services to or

2 arrange those services for enrollees participating in programs

3 administered by the Illinois Department shall do all of the

4 following:

5 (1) Provide that any provider affiliated with the

6 managed care community network may also provide services on

7 a fee-for-service basis to Illinois Department clients not

8 enrolled in such managed care entities.

9 (2) Provide client education services as determined

10 and approved by the Illinois Department, including but not

11 limited to (i) education regarding appropriate utilization

12 of health care services in a managed care system, (ii)

13 written disclosure of treatment policies and restrictions

14 or limitations on health services, including, but not

15 limited to, physical services, clinical laboratory tests,

16 hospital and surgical procedures, prescription drugs and

17 biologics, and radiological examinations, and (iii)

18 written notice that the enrollee may receive from another

19 provider those covered services that are not provided by

20 the managed care community network.

21 (3) Provide that enrollees within the system may choose

22 the site for provision of services and the panel of health

23 care providers.

24 (4) Not discriminate in enrollment or disenrollment

25 practices among recipients of medical services or

26 enrollees based on health status.

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1 (5) Provide a quality assurance and utilization review

2 program that meets the requirements established by the

3 Illinois Department in rules that incorporate those

4 standards set forth in the Health Maintenance Organization

5 Act.

6 (6) Issue a managed care community network

7 identification card to each enrollee upon enrollment. The

8 card must contain all of the following:

9 (A) The enrollee's health plan.

10 (B) The name and telephone number of the enrollee's

11 primary care physician or the site for receiving

12 primary care services.

13 (C) A telephone number to be used to confirm

14 eligibility for benefits and authorization for

15 services that is available 24 hours per day, 7 days per

16 week.

17 (7) Ensure that every primary care physician and

18 pharmacy in the managed care community network meets the

19 standards established by the Illinois Department for

20 accessibility and quality of care. The Illinois Department

21 shall arrange for and oversee an evaluation of the

22 standards established under this paragraph (7) and may

23 recommend any necessary changes to these standards.

24 (8) Provide a procedure for handling complaints that

25 meets the requirements established by the Illinois

26 Department in rules that incorporate those standards set

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1 forth in the Health Maintenance Organization Act.

2 (9) Maintain, retain, and make available to the

3 Illinois Department records, data, and information, in a

4 uniform manner determined by the Illinois Department,

5 sufficient for the Illinois Department to monitor

6 utilization, accessibility, and quality of care.

7 (10) (Blank).

8 The Illinois Department shall contract with an entity or

9 entities to provide external peer-based quality assurance

10 review for the managed health care programs administered by the

11 Illinois Department. The entity shall meet all federal

12 requirements for an external quality review organization.

13 Each managed care community network must demonstrate its

14 ability to bear the financial risk of serving individuals under

15 this program. The Illinois Department, in conjunction with the

16 Department of Insurance, shall by rule adopt standards for

17 assessing the solvency and financial soundness of each managed

18 care community network. Any solvency and financial standards

19 adopted for managed care community networks shall beidentical

20 to ~~no more restrictive than~~ the solvency and financial

21 standards required under Article II of the Health Maintenance

22 Organization Act ~~adopted under Section 1856(a) of the Social~~

23 ~~Security Act for provider-sponsored organizations under Part C~~

24 ~~of Title XVIII of the Social Security Act~~.

25 The Illinois Department may implement the amendatory

26 changes to this Code made by this amendatory Act of 1998

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1 through the use of emergency rules in accordance with Section

2 5-45 of the Illinois Administrative Procedure Act. For purposes

3 of that Act, the adoption of rules to implement these changes

4 is deemed an emergency and necessary for the public interest,

5 safety, and welfare.

6 (c) Not later than June 30, 1996, the Illinois Department

7 shall enter into one or more cooperative arrangements with the

8 Department of Public Health for the purpose of developing a

9 single survey for nursing facilities, including but not limited

10 to facilities funded under Title XVIII or Title XIX of the

11 federal Social Security Act or both, which shall be

12 administered and conducted solely by the Department of Public

13 Health. The Departments shall test the single survey process on

14 a pilot basis, with both the Departments of Public Aid and

15 Public Health represented on the consolidated survey team. The

16 pilot will sunset June 30, 1997. After June 30, 1997, unless

17 otherwise determined by the Governor, a single survey shall be

18 implemented by the Department of Public Health which would not

19 preclude staff from the Department of Healthcare and Family

20 Services (formerly Department of Public Aid) from going on-site

21 to nursing facilities to perform necessary audits and reviews

22 which shall not replicate the single State agency survey

23 required by this Act. This Section shall not apply to community

24 or intermediate care facilities for persons with developmental

25 disabilities.

26 (d) Nothing in this Code in any way limits or otherwise

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1 impairs the authority or power of the Illinois Department to

2 enter into a negotiated contract pursuant to this Section with

3 a managed care community network or a health maintenance

4 organization, as defined in the Health Maintenance

5 Organization Act, that provides for termination or nonrenewal

6 of the contract without cause, upon notice as provided in the

7 contract, and without a hearing.

8 (Source: P.A. 95-331, eff. 8-21-07; 96-1501, eff. 1-25-11.)

9 (305 ILCS 5/5-30)

10 Sec. 5-30. Care coordination.

11 (a) At least 50% of recipients eligible for comprehensive

12 medical benefits in all medical assistance programs or other

13 health benefit programs administered by the Department,

14 including the Children's Health Insurance Program Act and the

15 Covering ALL KIDS Health Insurance Act, shall be enrolled in a

16 care coordination program by no later than January 1, 2015. For

17 purposes of this Section, "coordinated care" or "care

18 coordination" means delivery systems where recipients will

19 receive their care from providers who participate under

20 contract in integrated delivery systems that are responsible

21 for providing or arranging the majority of care, including

22 primary care physician services, referrals from primary care

23 physicians, diagnostic and treatment services, behavioral

24 health services, in-patient and outpatient hospital services,

25 dental services, and rehabilitation and long-term care

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1 services. The Department shall designate or contract for such

2 integrated delivery systems (i) to ensure enrollees have a

3 choice of systems and of primary care providers within such

4 systems; (ii) to ensure that enrollees receive quality care in

5 a culturally and linguistically appropriate manner; and (iii)

6 to ensure that coordinated care programs meet the diverse needs

7 of enrollees with developmental, mental health, physical, and

8 age-related disabilities.

9 (b) Payment for such coordinated care shall be based on

10 arrangements where the State pays for performance related to

11 health care outcomes, the use of evidence-based practices, the

12 use of primary care delivered through comprehensive medical

13 homes, the use of electronic medical records, and the

14 appropriate exchange of health information electronically made

15 either on a capitated basis in which a fixed monthly premium

16 per recipient is paid and full financial risk is assumed for

17 the delivery of services, or through other risk-based payment

18 arrangements.

19 (c) To qualify for compliance with this Section, the 50%

20 goal shall be achieved by enrolling medical assistance

21 enrollees from each medical assistance enrollment category,

22 including parents, children, seniors, and people with

23 disabilities to the extent that current State Medicaid payment

24 laws would not limit federal matching funds for recipients in

25 care coordination programs. In addition, services must be more

26 comprehensively defined and more risk shall be assumed than in

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1 the Department's primary care case management program as of the

2 effective date of this amendatory Act of the 96th General

3 Assembly.

4 (d) The Department shall report to the General Assembly in

5 a separate part of its annual medical assistance program

6 report, beginning April, 2012 until April, 2016, on the

7 progress and implementation of the care coordination program

8 initiatives established by the provisions of this amendatory

9 Act of the 96th General Assembly. The Department shall include

10 in its April 2011 report a full analysis of federal laws or

11 regulations regarding upper payment limitations to providers

12 and the necessary revisions or adjustments in rate

13 methodologies and payments to providers under this Code that

14 would be necessary to implement coordinated care with full

15 financial risk by a party other than the Department.

16 (e) Integrated Care Program for individuals with chronic

17 mental health conditions.

18 (1) The Integrated Care Program shall encompass

19 services administered to recipients of medical assistance

20 under this Article to prevent exacerbations and

21 complications using cost-effective, evidence-based

22 practice guidelines and mental health management

23 strategies.

24 (2) The Department may utilize and expand upon existing

25 contractual arrangements with integrated care plans under

26 the Integrated Care Program for providing the coordinated

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1 care provisions of this Section.

2 (3) Payment for such coordinated care shall be based on

3 arrangements where the State pays for performance related

4 to mental health outcomes on a capitated basis in which a

5 fixed monthly premium per recipient is paid and full

6 financial risk is assumed for the delivery of services, or

7 through other risk-based payment arrangements such as

8 provider-based care coordination.

9 (4) The Department shall examine whether chronic

10 mental health management programs and services for

11 recipients with specific chronic mental health conditions

12 do any or all of the following:

13 (A) Improve the patient's overall mental health in

14 a more expeditious and cost-effective manner.

15 (B) Lower costs in other aspects of the medical

16 assistance program, such as hospital admissions,

17 emergency room visits, or more frequent and

18 inappropriate psychotropic drug use.

19 (5) The Department shall work with the facilities and

20 any integrated care plan participating in the program to

21 identify and correct barriers to the successful

22 implementation of this subsection (e) prior to and during

23 the implementation to best facilitate the goals and

24 objectives of this subsection (e).

25 (f) A hospital that is located in a county of the State in

26 which the Department mandates some or all of the beneficiaries

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1 of the Medical Assistance Program residing in the county to

2 enroll in a Care Coordination Program, as set forth in Section

3 5-30 of this Code, shall not be eligible for any non-claims

4 based payments not mandated by Article V-A of this Code for

5 which it would otherwise be qualified to receive, unless the

6 hospital is a Coordinated Care Participating Hospital no later

7 than 60 days after the effective date of this amendatory Act of

8 the 97th General Assembly or 60 days after the first mandatory

9 enrollment of a beneficiary in a Coordinated Care program. For

10 purposes of this subsection, "Coordinated Care Participating

11 Hospital" means a hospital that meets one of the following

12 criteria:

13 (1) The hospital has entered into a contract to provide

14 hospital services with one or more MCOs to enrollees of the

15 care coordination program.

16 (2) The hospital has not been offered a contract by a

17 care coordination plan that the Department has determined

18 to be a good faith offer and that pays at least as much as

19 the Department would pay, on a fee-for-service basis, not

20 including disproportionate share hospital adjustment

21 payments or any other supplemental adjustment or add-on

22 payment to the base fee-for-service rate, except to the

23 extent such adjustments or add-on payments are

24 incorporated into the development of the applicable MCO

25 capitated rates.

26 As used in this subsection (f), "MCO" means any entity

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1 which contracts with the Department to provide services where

2 payment for medical services is made on a capitated basis.

3 (g) No later than August 1, 2013, the Department shall

4 issue a purchase of care solicitation for Accountable Care

5 Entities (ACE) to serve any children and parents or caretaker

6 relatives of children eligible for medical assistance under

7 this Article. An ACE may be a single corporate structure or a

8 network of providers organized through contractual

9 relationships with a single corporate entity. The solicitation

10 shall require that:

11 (1) An ACE operating in Cook County be capable of

12 serving at least 40,000 eligible individuals in that

13 county; an ACE operating in Lake, Kane, DuPage, or Will

14 Counties be capable of serving at least 20,000 eligible

15 individuals in those counties and an ACE operating in other

16 regions of the State be capable of serving at least 10,000

17 eligible individuals in the region in which it operates.

18 During initial periods of mandatory enrollment, the

19 Department shall require its enrollment services

20 contractor to use a default assignment algorithm that

21 ensures if possible an ACE reaches the minimum enrollment

22 levels set forth in this paragraph.

23 (2) An ACE must include at a minimum the following

24 types of providers: primary care, specialty care,

25 hospitals, and behavioral healthcare.

26 (3) An ACE shall have a governance structure that

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1 includes the major components of the health care delivery

2 system, including one representative from each of the

3 groups listed in paragraph (2).

4 (4) An ACE must be an integrated delivery system,

5 including a network able to provide the full range of

6 services needed by Medicaid beneficiaries and system

7 capacity to securely pass clinical information across

8 participating entities and to aggregate and analyze that

9 data in order to coordinate care.

10 (5) An ACE must be capable of providing both care

11 coordination and complex case management, as necessary, to

12 beneficiaries. To be responsive to the solicitation, a

13 potential ACE must outline its care coordination and

14 complex case management model and plan to reduce the cost

15 of care.

16 (6) In the first 18 months of operation, unless the ACE

17 selects a shorter period, an ACE shall be paid care

18 coordination fees on a per member per month basis that are

19 projected to be cost neutral to the State during the term

20 of their payment and, subject to federal approval, be

21 eligible to share in additional savings generated by their

22 care coordination.

23 (7) In months 19 through 36 of operation, unless the

24 ACE selects a shorter period, an ACE shall be paid on a

25 pre-paid capitation basis for all medical assistance

26 covered services, under contract terms similar to Managed

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1 Care Organizations (MCO), with the Department sharing the

2 risk through either stop-loss insurance for extremely high

3 cost individuals or corridors of shared risk based on the

4 overall cost of the total enrollment in the ACE. The ACE

5 shall be responsible for claims processing, encounter data

6 submission, utilization control, and quality assurance.

7 (8) In the fourth and subsequent years of operation, an

8 ACE shall convert to a Managed Care Community Network

9 (MCCN), as defined in this Article, or Health Maintenance

10 Organization pursuant to the Illinois Insurance Code,

11 accepting full-risk capitation payments.

12 The Department shall allow potential ACE entities 5 months

13 from the date of the posting of the solicitation to submit

14 proposals. After the solicitation is released, in addition to

15 the MCO rate development data available on the Department's

16 website, subject to federal and State confidentiality and

17 privacy laws and regulations, the Department shall provide 2

18 years of de-identified summary service data on the targeted

19 population, split between children and adults, showing the

20 historical type and volume of services received and the cost of

21 those services to those potential bidders that sign a data use

22 agreement. The Department may add up to 2 non-state government

23 employees with expertise in creating integrated delivery

24 systems to its review team for the purchase of care

25 solicitation described in this subsection. Any such

26 individuals must sign a no-conflict disclosure and

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1 confidentiality agreement and agree to act in accordance with

2 all applicable State laws.

3 During the first 2 years of an ACE's operation, the

4 Department shall provide claims data to the ACE on its

5 enrollees on a periodic basis no less frequently than monthly.

6 Nothing in this subsection shall be construed to limit the

7 Department's mandate to enroll 50% of its beneficiaries into

8 care coordination systems by January 1, 2015, using all

9 available care coordination delivery systems, including Care

10 Coordination Entities (CCE), MCCNs, or MCOs, nor be construed

11 to affect the current CCEs, MCCNs, and MCOs selected to serve

12 seniors and persons with disabilities prior to that date.

13 Nothing in this subsection precludes the Department from

14 considering future proposals for new ACEs or expansion of

15 existing ACEs at the discretion of the Department.

16 (h) Department contracts with MCOs and other entities

17 reimbursed by risk based capitation shall have a minimum

18 medical loss ratio of 85%, shall require the entity to

19 establish an appeals and grievances process for consumers and

20 providers, and shall require the entity to provide a quality

21 assurance and utilization review program. Entities contracted

22 with the Department to coordinate healthcare regardless of risk

23 shall be measured utilizing the same quality metrics. The

24 quality metrics may be population specific. Any contracted

25 entity serving at least 5,000 seniors or people with

26 disabilities or 15,000 individuals in other populations

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1 covered by the Medical Assistance Program that has been

2 receiving full-risk capitation for a year shall be accredited

3 by a national accreditation organization authorized by the

4 Department within 2 years after the date it is eligible to

5 become accredited. The requirements of this subsection shall

6 apply to contracts with MCOs entered into or renewed or

7 extended after June 1, 2013.

8 (h-5) The Department shall monitor and enforce compliance

9 by MCOs with agreements they have entered into with providers

10 on issues that include, but are not limited to, timeliness of

11 payment, payment rates, and processes for obtaining prior

12 approval. The Department may impose sanctions on MCOs for

13 violating provisions of those agreements that include, but are

14 not limited to, financial penalties, suspension of enrollment

15 of new enrollees, and termination of the MCO's contract with

16 the Department. As used in this subsection (h-5), "MCO" has the

17 meaning ascribed to that term in Section 5-30.1 of this Code.

18 (i) The Department shall treat all contracted entities

19 under this Section identically in relation to care coordination

20 ratios. Managed Care Entities are authorized to hire community

21 healthcare workers to meet the mandated care coordination

22 ratios. The Department shall define by policy the term

23 "community healthcare workers" no later than January 1, 2016.

24 (j) The Department shall treat all contracted entities

25 receiving risk-based capitation payments identically with

26 regards to network adequacy and medical loss ratios.

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1 (k) In conjunction with the Department of Insurance, the

2 Department shall ensure that all contracted entities receiving

3 risk-based capitation payments are treated identically with

4 regards to protections against financial insolvency.

5 (Source: P.A. 97-689, eff. 6-14-12; 98-104, eff. 7-22-13;

6 98-651, eff. 6-16-14.)