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Full Text of HB0704  100th General Assembly




State of Illinois
2017 and 2018


Introduced 1/25/2017, by Rep. Patricia R. Bellock


New Act

    Creates the Medicaid Smart Card Pilot Program Act. Requires the Director of the Department of Healthcare and Family Services to establish a Medicaid Smart Card Pilot Program to reduce the total amount of expenditures under the State's Medical Assistance Program. Provides that the pilot program shall be designed to reduce the average monthly cost under the State's Medical Assistance Program for recipients within the pilot program area by an amount that is at least sufficient to recover the cost of implementing the pilot program. Provides that the Director shall determine the geographic area to be included in the pilot program and may contract with an independent entity for the purpose of developing and implementing the pilot program. Contains provisions on required activities under the pilot program, including the distribution of Medicaid Smart Cards to designated recipients; measures the Department might take to implement the pilot program; annual evaluations; reporting requirements; extension or expansion of the pilot program; the confidentiality of health information; reports to the Inspector General; and rulemaking authority.

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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 1. Short title. This Act may be cited as the
5Medicaid Smart Card Pilot Program Act.
6    Section 5. Definitions. As used in this Act:
7    "Abuse" means provider practices that are inconsistent
8with sound fiscal, business, or medical practices and result in
9unnecessary costs to the State's Medical Assistance Program or
10in reimbursement for services that are not medically necessary
11or that fail to meet professionally recognized standards for
12health care. The term also includes recipient practices that
13result in unnecessary costs to the State's Medical Assistance
15    "Director" means the Director of the Department of
16Healthcare and Family Services.
17    "Department" means the Department of Healthcare and Family
19    "Designated recipient" means a recipient who is issued a
20Medicaid Smart Card.
21    "Fraud" means an intentional deception or
22misrepresentation made by any person with the knowledge that
23the deception could result in some unauthorized benefit to that



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1person or another person, including any act that constitutes
2fraud under applicable federal or State law.
3    "Health care facility" means any facility licensed under
4the Hospital Licensing Act, the Nursing Home Care Act, the
5ID/DD Community Care Act, the Specialized Mental Health
6Rehabilitation Act of 2013, or any other laws of this State
7that is certified to participate in the State's Medical
8Assistance Program.
9    "Health care professional" means (i) a person licensed
10under the Medical Practice Act of 1987, (ii) a person licensed
11or registered under other laws of this State to provide dental,
12medical, pharmaceutical, optometric, podiatric, or nursing
13services, or other remedial care recognized under State law,
14and (iii) a person licensed under other laws of this State as a
15clinical social worker.
16    "Medicaid Smart Card" means a Medicaid eligibility
17identification card that contains personal health information
18about the individual to whom it is issued, and which is
19distributed to designated recipients of medical assistance for
20use in the pilot program in lieu of the Medical Card issued by
21the Department to recipients under the State's Medical
22Assistance Program.
23    "Medical assistance" means medical assistance benefits
24provided under the State's Medical Assistance Program pursuant
25to Article V of the Illinois Public Aid Code.
26    "Pilot program" means the Medicaid Smart Card Pilot Program



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1established pursuant to this Act.
2    "Provider" means a health care professional or health care
3facility providing health care services to a designated
5    "Recipient" means a recipient of medical assistance
6benefits provided under Article V of the Illinois Public Aid
8    "Transaction" means each occasion on which a designated
9recipient presents at a provider's premises for the receipt of
10health care services from that provider.
11    Section 10. Medicaid Smart Card Pilot Program.
12    (a) The Director shall establish a Medicaid Smart Card
13Pilot Program. The objective of the pilot program shall be to
14reduce the total amount of expenditures under the State's
15Medical Assistance Program, by reducing the average health care
16cost per designated recipient, relative to what would be
17expended in the absence of the pilot program. The pilot program
18shall be designed to reduce the average monthly cost under the
19State's Medical Assistance Program for recipients within the
20pilot program area by an amount that is at least sufficient to
21recover the cost of implementing the pilot program.
22    The Director shall determine the geographic area to be
23included in the pilot program and may contract with an
24independent entity as the Director determines appropriate for
25the purpose of developing and implementing the pilot program.



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1    (b) The pilot program shall include the following
2activities, at a minimum:
3        (1) enrollment of designated recipients as pilot
4    program participants;
5        (2) distribution of Medicaid Smart Cards to designated
6    recipients;
7        (3) authentication of designated recipients at the
8    point of transaction, at the onset and completion of each
9    transaction, in order to prevent card sharing and other
10    forms of abuse or fraud;
11        (4) denial of ineligible persons at the point of
12    transaction;
13        (5) authentication of providers at the point of
14    transaction to prevent improper billing practices and
15    other forms of abuse or fraud;
16        (6) any efforts necessary to secure and protect the
17    personal identity and information of designated
18    recipients.
19    (c) The Director shall develop such policies and procedures
20as necessary concerning the distribution and activation of
21Medicaid Smart Cards for designated recipients and the handling
22of lost, stolen, or otherwise unavailable Medicaid Smart Cards.
23    (d) The pilot program may include the use of any of the
25        (1) a secure Internet-based information system for
26    recording and reporting authenticated transactions;



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1        (2) a secure Internet-based information system that
2    interfaces with the appropriate State databases to
3    determine the eligibility of designated recipients;
4        (3) a system that gathers analytical information to be
5    provided to data-mining companies in order to assist in
6    data-mining processes;
7        (4) a Medicaid Smart Card with the ability to store
8    multiple recipients' information on one card;
9        (5) procedures that do not require pre-enrollment of
10    designated recipients; and
11        (6) an image of the designated recipient stored on both
12    the Medicaid Smart Card and the database with which it is
13    matched.
14    (e) In implementing the pilot program, the Department may
15do any of the following:
16        (1) incorporate additional or alternative methods of
17    authentication of designated recipients;
18        (2) enter and store billing codes, deductible amounts,
19    and bill confirmations;
20        (3) allow electronic prescribing services and
21    prescription database integration and tracking in order to
22    prevent medical error through information sharing and to
23    reduce prescription drug abuse and lower health care costs;
24        (4) implement quick-pay incentives for a provider when
25    an electronic prescribing service, electronic health
26    record, electronic patient record, or computerized patient



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1    record used by the provider automatically synchronizes
2    with a designated recipient's Medicaid Smart Card and the
3    provider electronically submits a claim; and
4        (5) allow elements of the pilot program, including, but
5    not limited to, Medicaid Smart Cards, fingerprint
6    scanners, and card readers, to be adapted for use by other
7    State programs administered by the Department in order to
8    reduce costs associated with the use of multiple electronic
9    benefit cards by a recipient.
10    (f) The Department shall collaborate with the Secretary of
11State to ensure that driver's license photographic and other
12identification data are utilized to reduce the cost of
13implementing the pilot program to the maximum extent
15    (g) The Director shall apply for such State plan amendments
16or waivers as may be necessary to implement the provisions of
17this Act and to secure such federal financial participation
18through the federal Medicaid program as may be available for
19State expenditures made under this Act.
20    Section 15. Annual evaluation. The Department shall
21evaluate the pilot program annually to:
22        (1) assess the impact of the pilot program on the
23    average monthly health care cost per recipient under the
24    State's Medical Assistance Program, including an
25    assessment of how the health care costs per recipient in



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1    geographic areas participating in the pilot program
2    compare to the health care costs per recipient in
3    geographic areas not participating in the pilot program;
4        (2) distinguish the impact of the pilot program from
5    other demographic, geographic, and health care factors
6    that may affect the average monthly health care costs per
7    recipient under the State's Medical Assistance Program;
8        (3) quantify the cost savings attributable to the pilot
9    program and identify those strategies necessary to achieve
10    the highest rate of cost savings from the pilot program;
11        (4) assess variations in the impact of the pilot
12    program on the average monthly health care cost per
13    recipient and the cost savings thereby generated, by
14    provider type, by county, and by other geographic,
15    demographic, or health care characteristics as identified
16    by the Department;
17        (5) assess the extent to which designated recipients
18    receive health care services outside of the geographic area
19    of the pilot program in order to avoid abuse or fraud
20    detection; and
21        (6) survey a representative sample of recipients in the
22    geographic area of the pilot program, prior to the start of
23    the pilot program and at least annually thereafter, to
24    collect data about health care services received, the
25    frequency of those services, recipient satisfaction with
26    services used, and recipient satisfaction with the pilot



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1    program.
2    The Department may collect any additional data necessary to
3evaluate the scope, effectiveness, and impact of the pilot
4program, including, but not limited to: claims data; other
5health care data; demographic data; and geographic data.
6    Section 20. Reports. No later than one year after the
7effective date of this Act and annually thereafter for such
8time as the pilot program remains in effect, the Director shall
9submit a report to the Governor and to the General Assembly on
10the results of the pilot program with regard to achieving its
11objective and the results of the annual evaluation conducted
12pursuant to Section 15. The report may include recommendations
13for appropriate legislative or administrative action necessary
14to further the purpose of this Act.
15    Section 25. Extension or expansion of pilot program. The
16Director shall not extend the pilot program unless the Director
17has determined that the pilot program has achieved its
18objective and shall not expand the pilot program unless the
19annual evaluation conducted pursuant to Section 15 indicates
20that the pilot program can be expanded through savings to the
21State's Medical Assistance Program achieved by the pilot
22program. The Director's recommendations concerning whether to
23extend the pilot program or to expand the pilot program to
24encompass more recipients shall be included in the Director's



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1second annual report pursuant to Section 20. The pilot program
2shall terminate 2 years after the effective date of this Act
3unless extended by the Director.
4    Section 30. Health information; confidentiality.
5    (a) The provisions of this Act shall not be construed as
6affecting any person's obligation to comply with the
7requirements of federal and State law and regulations
8concerning the privacy of personal health information.
9    (b) The Director, the Department, and any employee thereof,
10if acting in good faith, shall not be held responsible for any
11action of any contractor or subcontractor in the event that the
12contractor or subcontractor is found to have violated any
13federal or State law or regulation concerning the privacy of
14personal health information.
15    Section 35. Reports to Inspector General; rules.
16    (a) If the Department has reason to believe that abuse or
17fraud has been perpetrated in connection with the pilot
18program, the Department shall refer any such matter to the
19Inspector General appointed under Section 12-13.1 of the
20Illinois Public Aid Code.
21    (b) The Department shall adopt any rules necessary to
22implement the provisions of this Act.