SB1773ham006 100TH GENERAL ASSEMBLY

Rep. Sara Feigenholtz

Filed: 2/7/2018

10000SB1773ham006 LRB100 09919 KTG 35731 a

AMENDMENT TO SENATE BILL 1773

AMENDMENT NO. ______. Amend Senate Bill 1773, AS AMENDED, with reference to page and line numbers of House Amendment No. 4 as follows:

on page 52, line 15, after "5-30.7" by inserting ", 5-30.8"; and

on page 76, immediately below line 2, by inserting the following:

"(305 ILCS 5/5-30.8 new)

Sec. 5-30.8. Managed care organization rate transparency.

(a) For the annual establishment of Managed Care Organization (MCO) capitated rate payments from the State, including, but not limited to, (i) hospital fee schedule reforms and updates, (ii) rates related to a single State-mandated preferred drug list, (iii) rate updates related to the State's preferred drug list, (iv) inclusion of coverage for children with special needs, (v) inclusion of coverage for children within the child welfare system, (vi) annual MCO capitated rates, and (vii) any retroactive provider fee schedule adjustments or other changes required by legislation or other actions, the Department of Healthcare and Family Services shall implement a base rate setting process beginning on the effective date of this amendatory Act of the 100th General Assembly which shall include all of the following elements of transparency:

(1) The Department shall include participating MCOs and a statewide trade association representing a majority of participating MCOs in work groups to discuss the development of any new or updated hospital fee schedules or other provider fee schedules. Additionally, the Department shall share any data or reports used to develop MCO rates with participating MCOs. This data shall be comprehensive enough for MCO actuaries to recreate and verify the accuracy of the rate build-up.

(2) The Department shall not limit the number of experts that each MCO is allowed to bring to the draft rate meeting or the final rate review meeting.

(3) The Department and its contracted actuary shall meet with all participating MCOs simultaneously and together along with consulting actuaries contracted with statewide trade association representing a majority of Medicaid health plans at the request of the plans. Participating MCOs shall additionally, at their request, be granted individual rate development meetings with the Department.

(4) When a dispute remains between the MCOs and the State's actuaries about the actuarial soundness of the base capitation rates, an MCO or MCOs shall have the ability to seek an arbitration by a third party actuary to settle the dispute. The third party actuary shall be selected by the Department from a list of 3 actuary firms produced by the participating and complaining MCOs to the Department, and the arbitration costs shall be funded by the participating and complaining MCOs. The decision of the third party actuary shall be binding and shall apply to the base rates of the entire program retroactively.

(5) Any quality incentive or other incentive withholding of any portion of the actuarially certified rates must be budget-neutral; the entirety of any aggregate withheld amounts must be returned to the MCOs in proportion to their performance on the relevant performance metric. No amounts shall be returned to the Department in the event all performance measures are not achieved.

(6) The Department shall provide written responses to questions regarding MCO base rates, the rate development methodology, MCO rate data and all other requests regarding rates from MCOs in no more than 7 business days following any inquiry.

(b) For the development of rates for new rate years:

(1) the Department shall take into account emerging experience in development of the annual MCO base rates, including, but not limited to, current-year cost and utilization trends observed by MCOs;

(2) no less than 10 months prior to the effective date of a new rate year (calendar year or fiscal year), the Department shall meet with the MCOs regarding the initial data collection needed to establish base rates for the following year;

(3) no less than 6 months prior to the effective date of a new rate year (calendar year or fiscal year), the Department shall meet with MCOs to review data and the Department's written draft assumptions to be used in development of base rates for the following year, and shall provide opportunities for questions to be asked and answered;

(4) no less than 2 months prior to the effective date of a new rate year (calendar year or fiscal year), the Department shall provide the MCOs with draft capitated base rates and shall also conduct a draft rate meeting with MCOs to discuss, review, and seek feedback regarding the draft rates; and

(5) no less than one month prior to the effective date of a new rate year (calendar year or fiscal year), and prior to the submission of final rates to the Centers for Medicare and Medicaid Services, the Department shall provide the MCOs with a final actuarial report regarding the final base rates for the following year and subsequently conduct a final rate review meeting; final rates shall be marked final.

(c) For the development of rates reflecting policy changes:

(1) the Department must provide advance notice to MCOs of any significant policy change no later than 90 days prior to the effective date of the policy change. A significant policy change is defined as a change to covered benefits, payment methodology, new member population, or new service area made at the discretion of the Department and not required by legislation with a retroactive effective date;

(2) prior to the effective date of the policy change or program implementation, the Department shall meet with the MCOs regarding the initial data collection needed to establish base rates for the policy change. Additionally, the Department shall share with the participating MCOs what other data and the processes for collection shall be utilized to develop base rates;

(3) prior to the effective date of policy change or program implementation, the Department shall meet with MCOs to review data and the Department's written draft assumptions to be used in development of rates for the following year, and shall provide opportunities for questions to be asked and answered; and

(4) prior to the effective date of policy change or program implementation, the Department shall provide the MCOs with draft capitated base rates and shall also conduct a draft rate meeting with MCOs to discuss, review, and seek feedback regarding the draft rates.

(d) For the development of rates for retroactive policy or rate changes:

(1) the Department shall meet with the MCOs regarding the initial data collection needed to establish rates for the policy change. Additionally, the Department shall share with the participating MCOs what other data and the processes for collection shall be utilized to develop rates;

(2) the Department shall meet with MCOs to review data and the Department's written draft assumptions to be used in development of rates for the following year; and shall provide opportunities for questions to be asked and answered; and

(3) the Department shall provide the MCOs with draft capitated rates and shall also conduct a draft rate meeting with MCOs to discuss, review, and seek feedback regarding the draft rates.".