100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB5433
 
Introduced , by Rep. Fred Crespo
 
SYNOPSIS AS INTRODUCED:



305 ILCS 5/5-30

 Amends the Medical Assistance Article of the Illinois Public Aid Code. Requires the Department of Healthcare and Family Services to calculate the payout ratios reported by managed care organizations no less frequently than annually and to post these calculations on its website. Provides that the minimum payout ratio shall be 85% and that a managed care organization not meeting the 85% threshold must refund to the State, for each coverage year, an amount equal to the difference between the calculated payout ratio and 85% multiplied by coverage year revenue for that managed care organization. Defines "payment ratio". Requires the Department to exclusively use paid claims data submitted by managed care organizations in establishing managed care capitation rates. Provides that managed care organizations shall not be reimbursed by the State for any costs associated with health insurance fees.



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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,

3represented in the General Assembly:



4 Section 5. The Illinois Public Aid Code is amended by 
5changing Section 5-30 as follows:

6 (305 ILCS 5/5-30)
7 Sec. 5-30. Care coordination.
8 (a) At least 50% of recipients eligible for comprehensive 
9medical benefits in all medical assistance programs or other 
10health benefit programs administered by the Department, 
11including the Children's Health Insurance Program Act and the 
12Covering ALL KIDS Health Insurance Act, shall be enrolled in a 
13care coordination program by no later than January 1, 2015. For 
14purposes of this Section, "coordinated care" or "care 
15coordination" means delivery systems where recipients will 
16receive their care from providers who participate under 
17contract in integrated delivery systems that are responsible 
18for providing or arranging the majority of care, including 
19primary care physician services, referrals from primary care 
20physicians, diagnostic and treatment services, behavioral 
21health services, in-patient and outpatient hospital services, 
22dental services, and rehabilitation and long-term care 
23services. The Department shall designate or contract for such 
 
 
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1integrated delivery systems (i) to ensure enrollees have a 
2choice of systems and of primary care providers within such 
3systems; (ii) to ensure that enrollees receive quality care in 
4a culturally and linguistically appropriate manner; and (iii) 
5to ensure that coordinated care programs meet the diverse needs 
6of enrollees with developmental, mental health, physical, and 
7age-related disabilities. 
8 (b) Payment for such coordinated care shall be based on 
9arrangements where the State pays for performance related to 
10health care outcomes, the use of evidence-based practices, the 
11use of primary care delivered through comprehensive medical 
12homes, the use of electronic medical records, and the 
13appropriate exchange of health information electronically made 
14either on a capitated basis in which a fixed monthly premium 
15per recipient is paid and full financial risk is assumed for 
16the delivery of services, or through other risk-based payment 
17arrangements. 
18 (c) To qualify for compliance with this Section, the 50% 
19goal shall be achieved by enrolling medical assistance 
20enrollees from each medical assistance enrollment category, 
21including parents, children, seniors, and people with 
22disabilities to the extent that current State Medicaid payment 
23laws would not limit federal matching funds for recipients in 
24care coordination programs. In addition, services must be more 
25comprehensively defined and more risk shall be assumed than in 
26the Department's primary care case management program as of 
 
 
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1January 25, 2011 (the effective date of Public Act 96-1501). 
2 (d) The Department shall report to the General Assembly in 
3a separate part of its annual medical assistance program 
4report, beginning April, 2012 until April, 2016, on the 
5progress and implementation of the care coordination program 
6initiatives established by the provisions of Public Act 
796-1501. The Department shall include in its April 2011 report 
8a full analysis of federal laws or regulations regarding upper 
9payment limitations to providers and the necessary revisions or 
10adjustments in rate methodologies and payments to providers 
11under this Code that would be necessary to implement 
12coordinated care with full financial risk by a party other than 
13the Department. 

14 (e) Integrated Care Program for individuals with chronic 
15mental health conditions. 
16  (1) The Integrated Care Program shall encompass 
17 services administered to recipients of medical assistance 
18 under this Article to prevent exacerbations and 
19 complications using cost-effective, evidence-based 
20 practice guidelines and mental health management 
21 strategies.
22  (2) The Department may utilize and expand upon existing 
23 contractual arrangements with integrated care plans under 
24 the Integrated Care Program for providing the coordinated 
25 care provisions of this Section.
26  (3) Payment for such coordinated care shall be based on 
 
 
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1 arrangements where the State pays for performance related 
2 to mental health outcomes on a capitated basis in which a 
3 fixed monthly premium per recipient is paid and full 
4 financial risk is assumed for the delivery of services, or 
5 through other risk-based payment arrangements such as 
6 provider-based care coordination.
7  (4) The Department shall examine whether chronic 
8 mental health management programs and services for 
9 recipients with specific chronic mental health conditions 
10 do any or all of the following: 
11   (A) Improve the patient's overall mental health in 
12 a more expeditious and cost-effective manner.
13   (B) Lower costs in other aspects of the medical 
14 assistance program, such as hospital admissions, 
15 emergency room visits, or more frequent and 
16 inappropriate psychotropic drug use. 
17  (5) The Department shall work with the facilities and 
18 any integrated care plan participating in the program to 
19 identify and correct barriers to the successful 
20 implementation of this subsection (e) prior to and during 
21 the implementation to best facilitate the goals and 
22 objectives of this subsection (e).
23 (f) A hospital that is located in a county of the State in 
24which the Department mandates some or all of the beneficiaries 
25of the Medical Assistance Program residing in the county to 
26enroll in a Care Coordination Program, as set forth in Section 
 
 
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15-30 of this Code, shall not be eligible for any non-claims 
2based payments not mandated by Article V-A of this Code for 
3which it would otherwise be qualified to receive, unless the 
4hospital is a Coordinated Care Participating Hospital no later 
5than 60 days after June 14, 2012 (the effective date of Public 
6Act 97-689) or 60 days after the first mandatory enrollment of 
7a beneficiary in a Coordinated Care program. For purposes of 
8this subsection, "Coordinated Care Participating Hospital" 
9means a hospital that meets one of the following criteria: 
10  (1) The hospital has entered into a contract to provide 
11 hospital services with one or more MCOs to enrollees of the 
12 care coordination program. 
13  (2) The hospital has not been offered a contract by a 
14 care coordination plan that the Department has determined 
15 to be a good faith offer and that pays at least as much as 
16 the Department would pay, on a fee-for-service basis, not 
17 including disproportionate share hospital adjustment 
18 payments or any other supplemental adjustment or add-on 
19 payment to the base fee-for-service rate, except to the 
20 extent such adjustments or add-on payments are 
21 incorporated into the development of the applicable MCO 
22 capitated rates. 
23 As used in this subsection (f), "MCO" means any entity 
24which contracts with the Department to provide services where 
25payment for medical services is made on a capitated basis. 
26 (g) No later than August 1, 2013, the Department shall 
 
 
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1issue a purchase of care solicitation for Accountable Care 
2Entities (ACE) to serve any children and parents or caretaker 
3relatives of children eligible for medical assistance under 
4this Article. An ACE may be a single corporate structure or a 
5network of providers organized through contractual 
6relationships with a single corporate entity. The solicitation 
7shall require that: 
8  (1) An ACE operating in Cook County be capable of 
9 serving at least 40,000 eligible individuals in that 
10 county; an ACE operating in Lake, Kane, DuPage, or Will 
11 Counties be capable of serving at least 20,000 eligible 
12 individuals in those counties and an ACE operating in other 
13 regions of the State be capable of serving at least 10,000 
14 eligible individuals in the region in which it operates. 
15 During initial periods of mandatory enrollment, the 
16 Department shall require its enrollment services 
17 contractor to use a default assignment algorithm that 
18 ensures if possible an ACE reaches the minimum enrollment 
19 levels set forth in this paragraph. 
20  (2) An ACE must include at a minimum the following 
21 types of providers: primary care, specialty care, 
22 hospitals, and behavioral healthcare. 
23  (3) An ACE shall have a governance structure that 
24 includes the major components of the health care delivery 
25 system, including one representative from each of the 
26 groups listed in paragraph (2). 
 
 
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1  (4) An ACE must be an integrated delivery system, 
2 including a network able to provide the full range of 
3 services needed by Medicaid beneficiaries and system 
4 capacity to securely pass clinical information across 
5 participating entities and to aggregate and analyze that 
6 data in order to coordinate care. 
7  (5) An ACE must be capable of providing both care 
8 coordination and complex case management, as necessary, to 
9 beneficiaries. To be responsive to the solicitation, a 
10 potential ACE must outline its care coordination and 
11 complex case management model and plan to reduce the cost 
12 of care. 
13  (6) In the first 18 months of operation, unless the ACE 
14 selects a shorter period, an ACE shall be paid care 
15 coordination fees on a per member per month basis that are 
16 projected to be cost neutral to the State during the term 
17 of their payment and, subject to federal approval, be 
18 eligible to share in additional savings generated by their 
19 care coordination. 
20  (7) In months 19 through 36 of operation, unless the 
21 ACE selects a shorter period, an ACE shall be paid on a 
22 pre-paid capitation basis for all medical assistance 
23 covered services, under contract terms similar to Managed 
24 Care Organizations (MCO), with the Department sharing the 
25 risk through either stop-loss insurance for extremely high 
26 cost individuals or corridors of shared risk based on the 
 
 
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1 overall cost of the total enrollment in the ACE. The ACE 
2 shall be responsible for claims processing, encounter data 
3 submission, utilization control, and quality assurance. 
4  (8) In the fourth and subsequent years of operation, an 
5 ACE shall convert to a Managed Care Community Network 
6 (MCCN), as defined in this Article, or Health Maintenance 
7 Organization pursuant to the Illinois Insurance Code, 
8 accepting full-risk capitation payments. 
9 The Department shall allow potential ACE entities 5 months 
10from the date of the posting of the solicitation to submit 
11proposals. After the solicitation is released, in addition to 
12the MCO rate development data available on the Department's 
13website, subject to federal and State confidentiality and 
14privacy laws and regulations, the Department shall provide 2 
15years of de-identified summary service data on the targeted 
16population, split between children and adults, showing the 
17historical type and volume of services received and the cost of 
18those services to those potential bidders that sign a data use 
19agreement. The Department may add up to 2 non-state government 
20employees with expertise in creating integrated delivery 
21systems to its review team for the purchase of care 
22solicitation described in this subsection. Any such 
23individuals must sign a no-conflict disclosure and 
24confidentiality agreement and agree to act in accordance with 
25all applicable State laws. 
26 During the first 2 years of an ACE's operation, the 
 
 
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1Department shall provide claims data to the ACE on its 
2enrollees on a periodic basis no less frequently than monthly. 
3 Nothing in this subsection shall be construed to limit the 
4Department's mandate to enroll 50% of its beneficiaries into 
5care coordination systems by January 1, 2015, using all 
6available care coordination delivery systems, including Care 
7Coordination Entities (CCE), MCCNs, or MCOs, nor be construed 
8to affect the current CCEs, MCCNs, and MCOs selected to serve 
9seniors and persons with disabilities prior to that date. 
10 Nothing in this subsection precludes the Department from 
11considering future proposals for new ACEs or expansion of 
12existing ACEs at the discretion of the Department. 
13 (h) Department contracts with MCOs and other entities 
14reimbursed by risk based capitation shall have a minimum 
15medical loss ratio of 85%, shall require the entity to 
16establish an appeals and grievances process for consumers and 
17providers, and shall require the entity to provide a quality 
18assurance and utilization review program. Entities contracted 
19with the Department to coordinate healthcare regardless of risk 
20shall be measured utilizing the same quality metrics. The 
21quality metrics may be population specific. Any contracted 
22entity serving at least 5,000 seniors or people with 
23disabilities or 15,000 individuals in other populations 
24covered by the Medical Assistance Program that has been 
25receiving full-risk capitation for a year shall be accredited 
26by a national accreditation organization authorized by the 
 
 
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1Department within 2 years after the date it is eligible to 
2become accredited. The requirements of this subsection shall 
3apply to contracts with MCOs entered into or renewed or 
4extended after June 1, 2013. 
5 (h-2)
The Department must calculate the payout ratios 
6reported by MCOs no less frequently than annually and post 
7these calculations on its website. The minimum payout ratio 
8shall be 85%. For an MCO not meeting the 85% threshold, the MCO 
9must refund to the State, for each coverage year, an amount 
10equal to the difference between the calculated payout ratio and 
1185% multiplied by coverage year revenue for that MCO. As used 
12in this subsection, "payout ratio" means the total amount of 
13paid claims to medical providers by an MCO as reported to the 
14Department divided by total capitation payments made by the 
15Department to the MCO for any given period of time. 
16 (h-3) Beginning with capitation rates for calendar year 
172019, the Department must exclusively use paid claims data 
18submitted by MCOs in establishing managed care capitation 
19rates. 
20 (h-4) MCOs shall not be reimbursed by the State for any 
21costs associated with health insurance fees. 
22 (h-5) The Department shall monitor and enforce compliance 
23by MCOs with agreements they have entered into with providers 
24on issues that include, but are not limited to, timeliness of 
25payment, payment rates, and processes for obtaining prior 
26approval. The Department may impose sanctions on MCOs for 
 
 
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1violating provisions of those agreements that include, but are 
2not limited to, financial penalties, suspension of enrollment 
3of new enrollees, and termination of the MCO's contract with 
4the Department. As used in this subsection (h-5), "MCO" has the 
5meaning ascribed to that term in Section 5-30.1 of this Code. 
6 (i) Unless otherwise required by federal law, Medicaid 
7Managed Care Entities and their respective business associates 
8shall not disclose, directly or indirectly, including by 
9sending a bill or explanation of benefits, information 
10concerning the sensitive health services received by enrollees 
11of the Medicaid Managed Care Entity to any person other than 
12covered entities and business associates, which may receive, 
13use, and further disclose such information solely for the 
14purposes permitted under applicable federal and State laws and 
15regulations if such use and further disclosure satisfies all 
16applicable requirements of such laws and regulations. The 
17Medicaid Managed Care Entity or its respective business 
18associates may disclose information concerning the sensitive 
19health services if the enrollee who received the sensitive 
20health services requests the information from the Medicaid 
21Managed Care Entity or its respective business associates and 
22authorized the sending of a bill or explanation of benefits. 
23Communications including, but not limited to, statements of 
24care received or appointment reminders either directly or 
25indirectly to the enrollee from the health care provider, 
26health care professional, and care coordinators, remain 
 
 
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1permissible. Medicaid Managed Care Entities or their 
2respective business associates may communicate directly with 
3their enrollees regarding care coordination activities for 
4those enrollees. 
5 For the purposes of this subsection, the term "Medicaid 
6Managed Care Entity" includes Care Coordination Entities, 
7Accountable Care Entities, Managed Care Organizations, and 
8Managed Care Community Networks. 
9 For purposes of this subsection, the term "sensitive health 
10services" means mental health services, substance abuse 
11treatment services, reproductive health services, family 
12planning services, services for sexually transmitted 
13infections and sexually transmitted diseases, and services for 
14sexual assault or domestic abuse. Services include prevention, 
15screening, consultation, examination, treatment, or follow-up. 
16 For purposes of this subsection, "business associate", 
17"covered entity", "disclosure", and "use" have the meanings 
18ascribed to those terms in 45 CFR 160.103. 
19 Nothing in this subsection shall be construed to relieve a 
20Medicaid Managed Care Entity or the Department of any duty to 
21report incidents of sexually transmitted infections to the 
22Department of Public Health or to the local board of health in 
23accordance with regulations adopted under a statute or 
24ordinance or to report incidents of sexually transmitted 
25infections as necessary to comply with the requirements under 
26Section 5 of the Abused and Neglected Child Reporting Act or as 
 
 
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1otherwise required by State or federal law.
2 The Department shall create policy in order to implement 
3the requirements in this subsection. 
4 (j) Managed Care Entities (MCEs), including MCOs and all 
5other care coordination organizations, shall develop and 
6maintain a written language access policy that sets forth the 
7standards, guidelines, and operational plan to ensure language 
8appropriate services and that is consistent with the standard 
9of meaningful access for populations with limited English 
10proficiency. The language access policy shall describe how the 
11MCEs will provide all of the following required services:
12  (1) Translation (the written replacement of text from 
13 one language into another) of all vital documents and forms 
14 as identified by the Department.
15  (2) Qualified interpreter services (the oral 
16 communication of a message from one language into another 
17 by a qualified interpreter).
18  (3) Staff training on the language access policy, 
19 including how to identify language needs, access and 
20 provide language assistance services, work with 
21 interpreters, request translations, and track the use of 
22 language assistance services.
23  (4) Data tracking that identifies the language need.
24  (5) Notification to participants on the availability 
25 of language access services and on how to access such 
26 services. 
 
 
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1(Source: P.A. 98-104, eff. 7-22-13; 98-651, eff. 6-16-14; 
299-106, eff. 1-1-16; 99-181, eff. 7-29-15; 99-566, eff. 1-1-17; 
399-642, eff. 7-28-16.)