97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
SB3175

 

Introduced 2/1/2012, by Sen. John G. Mulroe

 

SYNOPSIS AS INTRODUCED:
 
New Act

    Creates the Medicaid Billing for Inmate Inpatient Hospital and Professional Services Act. Provides that it is the intent of the General Assembly to reduce the State's correctional healthcare costs by requiring hospitals and other medical service providers to bill Medicaid for eligible inmate inpatient hospital and professional services; implement improper payment detection, prevention, and recovery solutions to reduce correctional healthcare costs by introducing prospective solutions to eliminate overpayments and retrospective solutions to recover those overpayments that have already occurred; cap all contract and non-contract correctional healthcare reimbursement rates at no more than 110% of the federal Medicare reimbursement rate; and embrace technologies to better manage correctional healthcare expenses. In furtherance of these goals, requires the State to implement several technologies and services, including (i) clinical code editing technology; (ii) predictive modeling and analytics technologies; and (iii) claims audit and recovery services. Requires the State to either sign an intergovernmental agreement with another state already receiving these services, contract with The Cooperative Purchasing Network (TCPN) to issue a request for proposals (RFP) when selecting a contractor, or use the specified contractor selection process. Contains provisions concerning contracts, reporting requirements, and savings. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1    AN ACT to 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 Billing for Inmate Inpatient Hospital and
6Professional Services Act.
 
7    Section 5. Purpose. It is the intent of the General
8Assembly to:
9        (1) reduce the State's correctional healthcare costs
10    by requiring hospitals and other medical service providers
11    to bill Medicaid for eligible inmate inpatient hospital and
12    professional services;
13        (2) implement improper payment detection, prevention,
14    and recovery solutions to reduce correctional healthcare
15    costs by introducing prospective solutions to eliminate
16    overpayments and retrospective solutions to recover those
17    overpayments that have already occurred;
18        (3) cap all contract and non-contract correctional
19    healthcare reimbursement rates at no more than 110% of the
20    federal Medicare reimbursement rate; and
21        (4) embrace technologies to better manage correctional
22    healthcare expenses.
 

 

 

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1    Section 10. Definition. As used in this Act, unless the
2context indicates otherwise:
3    "Medicare" means the federal Medicare health insurance
4program established under Title XVIII of the Social Security
5Act.
 
6    Section 15. Application of Act. This Act shall specifically
7apply to:
8        (1) State correctional healthcare systems and
9    services, unless otherwise provided by law or
10    administrative rule; and
11        (2) State-contracted managed correctional healthcare
12    services, unless otherwise provided by law or
13    administrative rule.
 
14    Section 20. Caps on contracts and non-contract payments.
15The State shall cap all contract and non-contract payments to
16correctional healthcare providers at no more than 110% of the
17federal Medicare reimbursement rate.
 
18    Section 25. Electronic submission of claims. To the maximum
19extent practicable, all non-contract correctional healthcare
20claims shall be submitted to the State in an electronic format.
 
21    Section 30. Medicaid billing. Hospitals and other medical
22service providers shall bill Medicaid for all eligible inmate

 

 

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1inpatient hospital and professional services.
 
2    Section 35. Clinical code editing technology. The State
3shall implement state-of-the-art clinical code editing
4technology solutions to further automate claims resolution and
5enhance cost containment through improved claim accuracy and
6appropriate code correction. The technology shall identify and
7prevent errors or potential over-billing based on widely
8accepted and referenceable protocols such as those adopted by
9the American Medical Association and the Centers for Medicare
10and Medicaid Services. The edits shall be applied automatically
11before claims are adjudicated to speed processing and reduce
12the number of pending or rejected claims and to help ensure a
13smoother, more consistent, and more open adjudication process
14and fewer delays in provider reimbursement.
 
15    Section 40. Predictive modeling and analytics
16technologies. The State shall implement state-of-the-art
17predictive modeling and analytics technologies to provide a
18more comprehensive and accurate view across all providers,
19beneficiaries, and geographies within the State's correctional
20healthcare systems in order to:
21        (1) Assure that hospitals and medical service
22    providers bill Medicaid for all eligible inmate inpatient
23    hospital and professional services.
24        (2) Identify and analyze those billing or utilization

 

 

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1    patterns that represent a high risk of inappropriate,
2    inaccurate, or erroneous activity.
3        (3) Undertake and automate such analysis before
4    payment is made to minimize disruptions to the workflow and
5    speed claim resolution.
6        (4) Prioritize such identified transactions for
7    additional review before payment is made based on the
8    likelihood of potential inappropriate, inaccurate, or
9    erroneous activity.
10        (5) Capture outcome information from adjudicated
11    claims to allow for refinement and enhancement of the
12    predictive analytics technologies based on historical data
13    and algorithms within the system.
14        (6) Prevent the payment of claims for reimbursement
15    that have been identified as potentially inappropriate,
16    inaccurate, or erroneous until the claims have been
17    automatically verified as valid.
18        (7) Audit and recover improper payments made to
19    providers based upon inappropriate, inaccurate, or
20    erroneous billing or payment activity.
 
21    Section 45. Claims audit and recovery services. The State
22shall implement correctional healthcare claims audit and
23recovery services to identify improper payments due to
24non-fraudulent issues or audit claims and shall obtain provider
25sign-off on the audit results and recover validated

 

 

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1overpayments. Post-payment reviews shall ensure that the
2diagnoses and procedure codes are accurate and valid based on
3the supporting physician documentation within the medical
4records. Core categories of reviews may include: Coding
5Compliance Diagnosis Related Group (DRG) Reviews, Transfers,
6Readmissions, Cost Outlier Reviews, Outpatient 72-Hour Rule
7Reviews, Payment Errors, Billing Errors, and others.
 
8    Section 50. Cooperative Purchasing Network.
9    (a) To implement the inappropriate, inaccurate, or
10erroneous detection, prevention, and recovery solutions in
11this Act, the State shall either sign an intergovernmental
12agreement with another state already receiving these services,
13contract with The Cooperative Purchasing Network (TCPN) to
14issue a request for proposals (RFP) when selecting a
15contractor, or use the contractor selection process set forth
16in subsections (b) through (f).
17    (b) Not later than December 31, 2012, the State shall issue
18a request for information (RFI) to seek input from potential
19contractors on capabilities and cost structures associated
20with the scope of work under this Act. The results of the RFI
21shall be used by the State to create a formal RFP to be issued
22within 90 days after the closing date of the RFI.
23    (c) No later than 90 days after the closing date of the
24RFI, the State shall issue a formal RFP to carry out this Act
25during the first year of implementation. To the extent

 

 

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1appropriate, the State may include subsequent implementation
2years and may issue additional RFPs with respect to subsequent
3implementation years.
4    (d) The State shall select contractors to carry out this
5Act using competitive procedures as set forth under the
6Illinois Procurement Code.
7    (e) The State shall enter into a contract under this Act
8with an entity only if the entity:
9        (1) can demonstrate appropriate technical, analytical,
10    and clinical knowledge and experience to carry out the
11    functions included in this Act; or
12        (2) has a contract, or will enter into a contract, with
13    another entity that meets the criteria set forth in
14    paragraph (1).
15    (f) The State shall enter into a contract under this Act
16with an entity only to the extent the entity complies with
17conflict-of-interest standards as provided under the Illinois
18Procurement Code.
 
19    Section 55. Contracts. The State shall provide entities
20with a contract under this Act with appropriate access to
21claims and other data necessary for the entity to carry out the
22functions included in this Act. This includes, but is not
23limited to: providing current and historical correctional
24healthcare claims and provider database information; and
25taking necessary regulatory action to facilitate appropriate

 

 

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1public-private data sharing, including across multiple
2correctional managed care entities.
 
3    Section 60. Reports.
4    (a) The Department of Healthcare and Family Services, in
5cooperation with the Department of Corrections and any other
6appropriate State agency, shall complete reports as set forth
7in subsections (b) through (d).
8    (b) Not later than 3 months after the completion of the
9first implementation year under this Act, the State shall
10submit to the appropriate committees of the General Assembly
11and make available to the public a report that includes the
12following:
13        (1) A description of the implementation and use of
14    technologies included in this Act during the year.
15        (2) A certification by the Department of Healthcare and
16    Family Services, in cooperation with the Department of
17    Corrections and any other appropriate State agency, that
18    specifies the actual and projected savings to the State's
19    correctional healthcare systems as a result of the use of
20    these technologies, including estimates of the amounts of
21    such savings with respect to both improper payments
22    recovered and improper payments avoided.
23        (3) The actual and projected savings to the State's
24    correctional healthcare systems as a result of the use of
25    these technologies relative to the return on investment for

 

 

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1    the use of these technologies and in comparison to other
2    strategies or technologies used to prevent and detect
3    inappropriate, inaccurate, or erroneous activity.
4        (4) Any modifications or refinements that should be
5    made to increase the amount of actual or projected savings
6    or mitigate any adverse impact on correctional healthcare
7    beneficiaries or providers.
8        (5) An analysis of the extent to which the use of these
9    technologies successfully prevented and detected
10    inappropriate, inaccurate, or erroneous activity under the
11    State's correctional healthcare systems.
12        (6) A review of whether the technologies affected
13    access to, or the quality of, items and services furnished
14    to State correctional healthcare beneficiaries.
15        (7) A review of what effect, if any, the use of these
16    technologies had on correctional healthcare providers,
17    including assessment of provider education efforts and
18    documentation of processes for providers to review and
19    correct problems that are identified.
20    (c) Not later than 3 months after the completion of the
21second implementation year under this Act, the State shall
22submit to the appropriate committees of the General Assembly,
23and make available to the public, a report that includes, with
24respect to such year, the items required under subsection (b)
25as well as any other additional items determined appropriate
26with respect to the report for such year.

 

 

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1    (d) Not later than 3 months after the completion of the
2third implementation year under this Act, the State shall
3submit to the appropriate committees of the General Assembly,
4and make available to the public, a report that includes, with
5respect to such year, the items required under subsection (b)
6as well as any other additional items determined appropriate
7with respect to the report for such year.
 
8    Section 65. Savings. It is the intent of the General
9Assembly that the savings achieved through this Act shall more
10than cover the costs of implementation. Therefore, to the
11extent possible, technology services used in carrying out this
12Act shall be secured using a shared-savings model, whereby the
13State's only direct cost will be a percentage of actual savings
14achieved. Further, to enable this model, a percentage of
15achieved savings may be used to fund expenditures under this
16Act.
 
17    Section 70. Severability. If any provision of this Act or
18its application to any person or circumstance is held invalid,
19the invalidity of that provision or application does not affect
20other provisions or applications of this Act that can be given
21effect without the invalid provision or application.
 
22    Section 99. Effective date. This Act takes effect upon
23becoming law.