SB3175 97TH GENERAL ASSEMBLY

LRB097 17693 KTG 62906 b

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.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT to public aid.

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

Section 1. Short title. This Act may be cited as the Medicaid Billing for Inmate Inpatient Hospital and Professional Services Act.

Section 5. Purpose. It is the intent of the General Assembly to:

(1) 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;

(2) 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;

(3) cap all contract and non-contract correctional healthcare reimbursement rates at no more than 110% of the federal Medicare reimbursement rate; and

(4) embrace technologies to better manage correctional healthcare expenses.

Section 10. Definition. As used in this Act, unless the context indicates otherwise:

"Medicare" means the federal Medicare health insurance program established under Title XVIII of the Social Security Act.

Section 15. Application of Act. This Act shall specifically apply to:

(1) State correctional healthcare systems and services, unless otherwise provided by law or administrative rule; and

(2) State-contracted managed correctional healthcare services, unless otherwise provided by law or administrative rule.

Section 20. Caps on contracts and non-contract payments. The State shall cap all contract and non-contract payments to correctional healthcare providers at no more than 110% of the federal Medicare reimbursement rate.

Section 25. Electronic submission of claims. To the maximum extent practicable, all non-contract correctional healthcare claims shall be submitted to the State in an electronic format.

Section 30. Medicaid billing. Hospitals and other medical service providers shall bill Medicaid for all eligible inmate inpatient hospital and professional services.

Section 35. Clinical code editing technology. The State shall implement state-of-the-art clinical code editing technology solutions to further automate claims resolution and enhance cost containment through improved claim accuracy and appropriate code correction. The technology shall identify and prevent errors or potential over-billing based on widely accepted and referenceable protocols such as those adopted by the American Medical Association and the Centers for Medicare and Medicaid Services. The edits shall be applied automatically before claims are adjudicated to speed processing and reduce the number of pending or rejected claims and to help ensure a smoother, more consistent, and more open adjudication process and fewer delays in provider reimbursement.

Section 40. Predictive modeling and analytics technologies. The State shall implement state-of-the-art predictive modeling and analytics technologies to provide a more comprehensive and accurate view across all providers, beneficiaries, and geographies within the State's correctional healthcare systems in order to:

(1) Assure that hospitals and medical service providers bill Medicaid for all eligible inmate inpatient hospital and professional services.

(2) Identify and analyze those billing or utilization patterns that represent a high risk of inappropriate, inaccurate, or erroneous activity.

(3) Undertake and automate such analysis before payment is made to minimize disruptions to the workflow and speed claim resolution.

(4) Prioritize such identified transactions for additional review before payment is made based on the likelihood of potential inappropriate, inaccurate, or erroneous activity.

(5) Capture outcome information from adjudicated claims to allow for refinement and enhancement of the predictive analytics technologies based on historical data and algorithms within the system.

(6) Prevent the payment of claims for reimbursement that have been identified as potentially inappropriate, inaccurate, or erroneous until the claims have been automatically verified as valid.

(7) Audit and recover improper payments made to providers based upon inappropriate, inaccurate, or erroneous billing or payment activity.

Section 45. Claims audit and recovery services. The State shall implement correctional healthcare claims audit and recovery services to identify improper payments due to non-fraudulent issues or audit claims and shall obtain provider sign-off on the audit results and recover validated overpayments. Post-payment reviews shall ensure that the diagnoses and procedure codes are accurate and valid based on the supporting physician documentation within the medical records. Core categories of reviews may include: Coding Compliance Diagnosis Related Group (DRG) Reviews, Transfers, Readmissions, Cost Outlier Reviews, Outpatient 72-Hour Rule Reviews, Payment Errors, Billing Errors, and others.

Section 50. Cooperative Purchasing Network.

(a) To implement the inappropriate, inaccurate, or erroneous detection, prevention, and recovery solutions in this Act, the State shall 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 contractor selection process set forth in subsections (b) through (f).

(b) Not later than December 31, 2012, the State shall issue a request for information (RFI) to seek input from potential contractors on capabilities and cost structures associated with the scope of work under this Act. The results of the RFI shall be used by the State to create a formal RFP to be issued within 90 days after the closing date of the RFI.

(c) No later than 90 days after the closing date of the RFI, the State shall issue a formal RFP to carry out this Act during the first year of implementation. To the extent appropriate, the State may include subsequent implementation years and may issue additional RFPs with respect to subsequent implementation years.

(d) The State shall select contractors to carry out this Act using competitive procedures as set forth under the Illinois Procurement Code.

(e) The State shall enter into a contract under this Act with an entity only if the entity:

(1) can demonstrate appropriate technical, analytical, and clinical knowledge and experience to carry out the functions included in this Act; or

(2) has a contract, or will enter into a contract, with another entity that meets the criteria set forth in paragraph (1).

(f) The State shall enter into a contract under this Act with an entity only to the extent the entity complies with conflict-of-interest standards as provided under the Illinois Procurement Code.

Section 55. Contracts. The State shall provide entities with a contract under this Act with appropriate access to claims and other data necessary for the entity to carry out the functions included in this Act. This includes, but is not limited to: providing current and historical correctional healthcare claims and provider database information; and taking necessary regulatory action to facilitate appropriate public-private data sharing, including across multiple correctional managed care entities.

Section 60. Reports.

(a) The Department of Healthcare and Family Services, in cooperation with the Department of Corrections and any other appropriate State agency, shall complete reports as set forth in subsections (b) through (d).

(b) Not later than 3 months after the completion of the first implementation year under this Act, the State shall submit to the appropriate committees of the General Assembly and make available to the public a report that includes the following:

(1) A description of the implementation and use of technologies included in this Act during the year.

(2) A certification by the Department of Healthcare and Family Services, in cooperation with the Department of Corrections and any other appropriate State agency, that specifies the actual and projected savings to the State's correctional healthcare systems as a result of the use of these technologies, including estimates of the amounts of such savings with respect to both improper payments recovered and improper payments avoided.

(3) The actual and projected savings to the State's correctional healthcare systems as a result of the use of these technologies relative to the return on investment for the use of these technologies and in comparison to other strategies or technologies used to prevent and detect inappropriate, inaccurate, or erroneous activity.

(4) Any modifications or refinements that should be made to increase the amount of actual or projected savings or mitigate any adverse impact on correctional healthcare beneficiaries or providers.

(5) An analysis of the extent to which the use of these technologies successfully prevented and detected inappropriate, inaccurate, or erroneous activity under the State's correctional healthcare systems.

(6) A review of whether the technologies affected access to, or the quality of, items and services furnished to State correctional healthcare beneficiaries.

(7) A review of what effect, if any, the use of these technologies had on correctional healthcare providers, including assessment of provider education efforts and documentation of processes for providers to review and correct problems that are identified.

(c) Not later than 3 months after the completion of the second implementation year under this Act, the State shall submit to the appropriate committees of the General Assembly, and make available to the public, a report that includes, with respect to such year, the items required under subsection (b) as well as any other additional items determined appropriate with respect to the report for such year.

(d) Not later than 3 months after the completion of the third implementation year under this Act, the State shall submit to the appropriate committees of the General Assembly, and make available to the public, a report that includes, with respect to such year, the items required under subsection (b) as well as any other additional items determined appropriate with respect to the report for such year.

Section 65. Savings. It is the intent of the General Assembly that the savings achieved through this Act shall more than cover the costs of implementation. Therefore, to the extent possible, technology services used in carrying out this Act shall be secured using a shared-savings model, whereby the State's only direct cost will be a percentage of actual savings achieved. Further, to enable this model, a percentage of achieved savings may be used to fund expenditures under this Act.

Section 70. Severability. If any provision of this Act or its application to any person or circumstance is held invalid, the invalidity of that provision or application does not affect other provisions or applications of this Act that can be given effect without the invalid provision or application.

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