Illinois General Assembly - Full Text of SB2840
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Full Text of SB2840  97th General Assembly

SB2840 97TH GENERAL ASSEMBLY

  
  

 


 
97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
SB2840

 

Introduced 1/24/2012, by Sen. John G. Mulroe

 

SYNOPSIS AS INTRODUCED:
 
New Act

    Creates the Program Integrity for Medicaid and the Children's Health Insurance Program Act. Provides that it is the intent of the General Assembly to implement waste, fraud, and abuse detection, prevention, and recovery solutions to improve program integrity for Medicaid and the Children's Health Insurance Program in the State and create efficiency and cost savings through a shift from a retrospective "pay and chase" model to a prospective pre-payment model; and to comply with program integrity provisions of the federal Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010. In furtherance of these goals, requires the State to implement several technologies and services including (i) provider data verification and provider screening technology; (ii) state-of-the-art clinical code editing technology; (iii) state-of-the-art predictive modeling and analytics technologies; (iv) fraud investigative services; and (v) Medicaid and CHIP claims audit and recovery services. Requires the State to either 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 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
5Program Integrity for Medicaid and the Children's Health
6Insurance Program Act.
 
7    Section 5. Purpose. It is the intent of the General
8Assembly to implement waste, fraud, and abuse detection,
9prevention, and recovery solutions to:
10        (1) improve program integrity for Medicaid and the
11    Children's Health Insurance Program in the State and create
12    efficiency and cost savings through a shift from a
13    retrospective "pay and chase" model to a prospective
14    pre-payment model; and
15        (2) comply with program integrity provisions of the
16    federal Patient Protection and Affordable Care Act and the
17    Health Care and Education Reconciliation Act of 2010, as
18    promulgated in the Centers for Medicare and Medicaid
19    Services Final Rule 6028.
 
20    Section 10. Definitions. As used in this Act, unless the
21context indicates otherwise:
22    "Medicaid" means the program to provide grants to states

 

 

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1for medical assistance programs established under Title XIX of
2the Social Security Act (42 U.S.C. 1396 et seq.).
3    "CHIP" means the Children's Health Insurance Program
4established under Title XXI of the Social Security Act (42
5U.S.C. 1397aa et seq.).
6    "Enrollee" means an individual who is eligible to receive
7benefits and is enrolled in either Medicaid or CHIP.
8    "Secretary" means the U.S. Secretary of Health and Human
9Services, acting through the Administrator of the Centers for
10Medicare and Medicaid Services.
 
11    Section 15. Application of Act. This Act shall specifically
12apply to:
13        (1) State Medicaid managed care programs operated
14    under Article V of the Illinois Public Aid Code.
15        (2) State Medicaid programs operated under Article V of
16    the Illinois Public Aid Code.
17        (3) The State CHIP program operated under the
18    Children's Health Insurance Program Act.
 
19    Section 20. Provider data verification and provider
20screening technology. The State shall implement provider data
21verification and provider screening technology solutions to
22check healthcare billing and provider rendering data against a
23continually maintained provider information database for the
24purposes of automating reviews and identifying and preventing

 

 

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1inappropriate payments to:
2        (1) Deceased providers.
3        (2) Sanctioned providers.
4        (3) License expiration or retired providers.
5        (4) Confirmed wrong addresses.
6        (5) Providers for services which are not reimbursable.
 
7    Section 25. Clinical code editing technology. The State
8shall implement state-of-the-art clinical code editing
9technology solutions to further automate claims resolution and
10enhance cost containment through improved claim accuracy and
11appropriate code correction. The technology shall identify and
12prevent errors or potential over-billing based on widely
13accepted and transparent protocols such as those adopted by the
14American Medical Association and the Centers for Medicare and
15Medicaid Services. The edits shall be applied automatically
16before claims are adjudicated to speed processing and reduce
17the number of pending or rejected claims and to help ensure a
18smoother, more consistent, and more transparent adjudication
19process and fewer delays in provider reimbursement.
 
20    Section 30. Predictive modeling and analytics
21technologies. The State shall implement state-of-the-art
22predictive modeling and analytics technologies to provide a
23more comprehensive and accurate view across all providers,
24beneficiaries, and geographies within the Medicaid and CHIP

 

 

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1programs in order to:
2        (1) Identify and analyze those billing or utilization
3    patterns that represent a high risk of fraudulent activity.
4        (2) Integrate the information and data during a
5    transaction into the existing Medicaid and CHIP claims
6    workflow.
7        (3) Undertake and automate such analysis before
8    payment is made to minimize disruptions to the workflow and
9    speed claim resolution.
10        (4) Prioritize such identified transactions for
11    additional review before payment is made based on
12    likelihood of potential waste, fraud, or abuse.
13        (5) Capture outcome information from adjudicated
14    claims to allow for refinement and enhancement of the
15    predictive analytics technologies based on historical data
16    and algorithms within the system.
17        (6) Prevent the payment of claims for reimbursement
18    that have been identified as potentially wasteful,
19    fraudulent, over-utilized, or abusive until the claims
20    have been automatically verified as valid.
 
21    Section 35. Fraud investigative services. The State shall
22implement fraud investigative services that combine
23retrospective claims analysis and prospective waste, fraud,
24over-utilization, or abuse detection techniques. These
25services shall include analysis of historical claims data,

 

 

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1medical records, suspect provider databases, and high-risk
2identification lists, as well as direct patient and provider
3interviews. Emphasis shall be placed on providing education to
4providers and ensuring that they have the opportunity to review
5and correct any problems identified prior to adjudication.
 
6    Section 40. Claims audit and recovery services. The State
7shall implement Medicaid and CHIP claims audit and recovery
8services to identify improper payments due to non-fraudulent
9issues or audit claims and shall obtain provider sign-off on
10the audit results and recover validated overpayments.
11Post-payment reviews shall ensure that the diagnoses and
12procedure codes are accurate and valid based on the supporting
13physician documentation within the medical records. Core
14categories of reviews may include: Coding Compliance Diagnosis
15Related Group (DRG) Reviews, Transfers, Readmissions, Cost
16Outlier Reviews, Outpatient 72-Hour Rule Reviews, Payment
17Errors, Billing Errors, and others.
 
18    Section 45. Cooperative Purchasing Network.
19    (a) To implement this Act, the State shall either contract
20with The Cooperative Purchasing Network (TCPN) to issue a
21request for proposals (RFP) when selecting a contractor or use
22the contractor selection process set forth in subsections (b)
23through (f).
24    (b) Not later than December 31, 2012, the State shall issue

 

 

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1a request for information (RFI) to seek input from potential
2contractors on capabilities and cost structures associated
3with the scope of work under this Act. The results of the RFI
4shall be used by the State to create a formal RFP to be issued
5within 90 days after the closing date of the RFI.
6    (c) No later than 90 days after the closing date of the
7RFI, the State shall issue a formal RFP to carry out this Act
8during the first year of implementation. To the extent
9appropriate, the State may include subsequent implementation
10years and may issue additional RFPs with respect to subsequent
11implementation years.
12    (d) The State shall select contractors to carry out this
13Act using competitive procedures set forth under the Illinois
14Procurement Code.
15    (e) The State shall enter into a contract under this Act
16with an entity only if the entity:
17        (1) can demonstrate appropriate technical, analytical,
18    and clinical knowledge and experience to carry out the
19    functions included under this Act; or
20        (2) has a contract, or will enter into a contract, with
21    another entity that meets the criteria set forth in
22    paragraph (1).
23    (f) The State shall enter into a contract under this Act
24with an entity only to the extent the entity complies with
25conflict-of-interest standards as provided under the Illinois
26Procurement Code.
 

 

 

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1    Section 50. Contracts. The State shall provide an entity
2with whom it has entered into a contract under this Act with
3appropriate access to claims and other data necessary for the
4entity to carry out the functions included in this Act. This
5includes, but is not limited to, providing current and
6historical Medicaid and CHIP claims and provider database
7information and taking necessary regulatory action to
8facilitate appropriate public-private data sharing, including
9across multiple Medicaid managed care entities.
 
10    Section 55. Reports.
11    (a) The Department of Healthcare and Family Services shall
12complete reports as set forth in subsections (b) through (d).
13    (b) Not later than 3 months after the completion of the
14first implementation year under this Act, the State shall
15submit to the appropriate committees of the General Assembly
16and make available to the public a report that includes the
17following:
18        (1) A description of the implementation and use of
19    technologies included in this Act during the year.
20        (2) A certification by the Department of Healthcare and
21    Family Services that specifies the actual and projected
22    savings to the Medicaid and CHIP programs as a result of
23    the use of these technologies, including estimates of the
24    amounts of such savings with respect to both improper

 

 

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1    payments recovered and improper payments avoided.
2        (3) The actual and projected savings to the Medicaid
3    and CHIP programs as a result of the use of these
4    technologies relative to the return on investment for the
5    use of these technologies and in comparison to other
6    strategies or technologies used to prevent and detect
7    fraud, waste, and abuse.
8        (4) Any modifications or refinements that should be
9    made to increase the amount of actual or projected savings
10    or mitigate any adverse impact on Medicare beneficiaries or
11    providers.
12        (5) An analysis of the extent to which the use of these
13    technologies successfully prevented and detected waste,
14    fraud, or abuse in the Medicaid and CHIP programs.
15        (6) A review of whether the technologies affected
16    access to, or the quality of, items and services furnished
17    to Medicaid and CHIP beneficiaries.
18        (7) A review of what effect, if any, the use of these
19    technologies had on Medicaid and CHIP providers, including
20    assessment of provider education efforts and documentation
21    of processes for providers to review and correct problems
22    that are identified.
23    (c) Not later than 3 months after the completion of the
24second implementation year under this Act, the State shall
25submit to the appropriate committees of the General Assembly
26and make available to the public a report that includes, with

 

 

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1respect to such year, the items required under subsection (b)
2as well as any other additional items determined appropriate
3with respect to the report for such year.
4    (d) Not later than 3 months after the completion of the
5third implementation year under this Act, the State shall
6submit to the appropriate committees of the General Assembly,
7and make available to the public, a report that includes, with
8respect to such year, the items required under subsection (b)
9as well as any other additional items determined appropriate
10with respect to the report for such year.
 
11    Section 60. Savings. It is the intent of the General
12Assembly that the savings achieved through this Act shall more
13than cover the costs of implementation. Therefore, to the
14extent possible, technology services used in carrying out this
15Act shall be secured using a shared savings model, whereby the
16State's only direct cost will be a percentage of actual savings
17achieved. Further, to enable this model, a percentage of
18achieved savings may be used to fund expenditures under this
19Act.
 
20    Section 97. Severability. If any provision of this Act or
21its application to any person or circumstance is held invalid,
22the invalidity of that provision or application does not affect
23other provisions or applications of this Act that can be given
24effect without the invalid provision or application.
 

 

 

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1    Section 99. Effective date. This Act takes effect upon
2becoming law.