Illinois General Assembly - Full Text of SB1804

LRB104 07669 KTG 17713 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB1804

Introduced 2/5/2025, by Sen. Ram Villivalam

SYNOPSIS AS INTRODUCED:

320 ILCS 40/16

Amends the Program of All-Inclusive Care for the Elderly Act. Provides that to ensure that organizations contracted to implement the Program of All-Inclusive Care for the Elderly (PACE) program meet the needs of PACE participants, the Department of Healthcare and Family Services shall reform the rate-setting methodology for the PACE program by establishing a blended rate structure based on a 30% Home and Community-Based Services and 70% Skilled Nursing Facility case-mix which is a more accurate proportion of the comparable population expected to reside in an institution or the community if not enrolled in PACE. Requires the blended rate structure to more accurately reflect the comprehensive nature of care provided by PACE organizations and address the unique needs of PACE participants as a higher risk/acuity population with expected higher costs and frailty than comparable populations. Provides that when developing rates under the blended rate structure, the Department must consider not only the standard cost experiences of PACE participants but also the unique characteristics and specific care needs of the PACE population as well as any additional State plan services or populations that are not included in the State's Medicaid managed care contracts but are required under the PACE program.

A BILL FOR

AN ACT concerning public aid.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Program of All-Inclusive Care for the Elderly Act is amended by changing Section 16 as follows:

(320 ILCS 40/16)

Sec. 16. Blended rate structure Rates of payment.

(a) The General Assembly shall make appropriations to the Department to fund services under this Act. To ensure that organizations contracted to implement the PACE program meet the needs of PACE participants, the Department shall reform the rate-setting methodology for the PACE program by establishing a blended rate structure based on a 30% Home and Community-Based Services and 70% Skilled Nursing Facility case-mix which is a more accurate proportion of the comparable population expected to reside in an institution or the community if not enrolled in PACE. The blended rate structure established in accordance with this Section shall more accurately reflect the comprehensive nature of care provided by PACE organizations and address the unique needs of PACE participants as a higher risk/acuity population with expected higher costs and frailty than comparable populations.

When developing rates under the blended rate structure, the Department must consider not only the standard cost experiences of PACE participants but also the unique characteristics and specific care needs of the PACE population as well as any additional State plan services or populations that are not included in the State's Medicaid managed care contracts but are required under the PACE program. The Department shall develop and pay capitation rates to organizations contracted to implement the PACE program as described in Section 15 using actuarial methods.

The Department may develop capitation rates using a standardized rate methodology across managed care plan models for comparable populations. The specific rate methodology applied to PACE organizations shall address features of PACE that distinguishes it from other managed care plan models.

The blended rate structure rate methodology shall be consistent with actuarial rate development principles and shall provide for all reasonable, appropriate, and attainable costs for each PACE organization within a region.

(b) The Department may develop statewide rates and apply geographic adjustments, using available data sources deemed appropriate by the Department. Consistent with actuarial methods, the primary source of data used to develop rates for each PACE organization shall be its cost and utilization data for the Medical Assistance Program or other data sources as deemed necessary by the Department. Rates developed under this Section shall reflect the level of care associated with the specific populations served under the contract.

(c) The blended rate structure rate methodology developed in accordance with this Section shall contain a mechanism to account for the costs of high-cost drugs and treatments. Rates developed shall be actuarially certified prior to implementation.

(d) (Blank). Consistent with the requirements of federal law, the Department shall calculate an upper payment limit for payments to PACE organizations. In calculating the upper payment limit, the Department shall collect the applicable data as necessary and shall consider the risk of nursing home placement for the comparable population when estimating the level of care and risk of PACE participants.

(e) (Blank). The Department shall pay organizations contracted to implement the PACE program at a rate within the certified actuarially sound rate range developed with respect to that entity as necessary to mitigate the impact to the entity of the methodology developed in accordance with this Section.

(f) This Section shall apply for rates established on and after the effective date of this amendatory Act of the 104th General Assembly. no earlier than July 1, 2022.

(Source: P.A. 102-43, eff. 7-6-21.)