Rhode Island 2023 Regular Session

Rhode Island House Bill H5402 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1
2	2
3	3
4	4
5	5	2023 -- H 5402
6	6	========
7	7	LC001115
8	8	========
9	9	S TATE OF RHODE IS LAND
10	10	IN GENERAL ASSEMBLY
11	11	JANUARY SESSION, A.D. 2023
12	12	____________
13	13
14	14	A N A C T
15	15	RELATING TO HUMAN SE RVICES -- MEDICAL ASSISTANCE
16	16	Introduced By: Representatives Casimiro, Noret, Bennett, Potter, Morales, McGaw,
17	17	Cotter, and Stewart
18	18	Date Introduced: February 03, 2023
19	19	Referred To: House Finance
20	20
21	21
22	22	It is enacted by the General Assembly as follows:
23	23	SECTION 1. Legislative findings. 1
24	24	The general assembly finds and declares the following: 2
25	25	(1) Medicaid covers approximately one in four (4) Rhode Islanders, including: one in five 3
26	26	(5) adults, three (3) in eight (8) children, three (3) in five (5) nursing home residents, four (4) in 4
27	27	nine (9) individuals with disabilities, and one in five (5) Medicare beneficiaries. 5
28	28	(2) Prior to 1994, Rhode Island managed its own Medicaid programs; directly reimbursing 6
29	29	healthcare providers by paying fee-for-service ("FFS"). 7
30	30	(3) Currently, the state pays about $1.7 billion to three (3) private health insurance 8
31	31	companies, Neighborhood Health Plan of Rhode Island, Tufts Health Plan and United Healthcare 9
32	32	Community Plan (Managed Care Organizations - "MCOs"), to “manage” Medicaid benefits for 10
33	33	about ninety percent (90%) of all Rhode Island Medicaid recipients (approximately three hundred 11
34	34	thousand (300,000)); the other ten percent (10%) remains FFS. 12
35	35	(4) MCOs are not actual health care providers - they are middlemen who take set per-13
36	36	person per-month fees from the state, pass some of that money to actual health care providers, and 14
37	37	keep the rest as MCO profit. 15
38	38	(5) MCOs increase their profits by limiting health care goods and services for Medicaid 16
39	39	patients. 17
40	40	(6) Theoretically, MCOs are supposed to help states control Medicaid costs and improve 18
41	41	access and health care outcomes; however, there is no significant evidence of these objectives. 19
42	42
43	43
44	44	LC001115 - Page 2 of 5
45	45	(7) Peer-reviewed research, including two (2) separate literature reviews done in 2012 and 1
46	46	2020, concluded: "While there are incidences of success, research evaluating managed-care 2
47	47	programs show that these initial hopes [for improved costs, access and outcomes] were largely 3
48	48	unfounded.” 4
49	49	(8) Since 2009, every annual Single Audit Report by the Rhode Island Office of the Auditor 5
50	50	General has found that the state lacks adequate oversight of MCOs. 6
51	51	(9) In 2009, Connecticut conducted an audit which found it was overpaying its three (3) 7
52	52	MCOs (United Healthcare Group, Aetna, and Community Health Network of Connecticut) nearly 8
53	53	fifty million dollars ($50,000,000) per year. 9
54	54	(10) In 2012, Connecticut returned to a state-run fee-for-service Medicaid program and 10
55	55	subsequently saved hundreds of millions of dollars and achieved the lowest Medicaid cost increases 11
56	56	in the country and improved access to care. 12
57	57	(11) In 2015, the Rhode Island Auditor General found that Rhode Island overpaid MCOs 13
58	58	more than two hundred million dollars ($200,000,000) and could not recoup overpayments until 14
59	59	2017. 15
60	60	(12) In 2015, Governor Raimondo began efforts to “Reinvent Medicaid” that led to 16
61	61	increased Medicaid privatization, including the UHIP/RI Bridges project and MCO five (5) year 17
62	62	contracts. 18
63	63	(13) In the FY 2017, FY 2018, and FY 2019 Single Audit Reports, the Rhode Island 19
64	64	Auditor General bluntly concluded, "The State lacks effective auditing and monitoring of MCO 20
65	65	financial activity.” 21
66	66	(14) In its latest FY 2020 Single Audit Report, the Auditor General notes that EOHHS 22
67	67	failures to collect adequate information from MCOs has had the “effect” of, “Inaccurate 23
68	68	reimbursements to MCOs for contract services provided to Medicaid enrollees.” 24
69	69	(15) The federal Center for Medicaid and CHIP Services (CMCS) determined that in 2019, 25
70	70	Rhode Island spent the second highest amount per capita for Medicaid patients out of all states and 26
71	71	had a, “High overall level of data quality concern.” 27
72	72	(16) The Rhode Island executive office of health and human services (EOHHS) has not 28
73	73	taken sufficient actions to address problems with MCO oversight, for example: 29
74	74	(i) Until 2021, EOHHS made Rhode Island one of only six (6) states with MCO contracts 30
75	75	that had not required MCOs to spend at least eighty-five percent (85%) of their Medicaid revenues 31
76	76	on covered services and quality improvement (i.e., have a Medical Loss Ratio, MLR, of 85%); 32
77	77	(ii) Unlike thirty (30) other states, EOHHS failed to require MCOs to remit to the state 33
78	78	Medicaid program excess capitation revenues not adequately applied to the costs of medical 34
79	79
80	80
81	81	LC001115 - Page 3 of 5
82	82	services; 1
83	83	(iii) EOHHS failed to file annual Medicaid reports; publishing FY 2019 data in a report 2
84	84	dated May 2021; and 3
85	85	(iv) EOHHS failed to ensure that FY2021 MCO quarterly reports were made in a 4
86	86	“Financial Data Reporting System,” as set forth in a response to criticisms raised by the Rhode 5
87	87	Island Auditor General. 6
88	88	(17) Other states that more recently adopted Medicaid MCO managed care, such as Iowa 7
89	89	and Kansas, have suffered cuts in health care, far less than expected savings, and sacrificed 8
90	90	oversight and transparency. 9
91	91	(18) During the COVID-19 pandemic, Rhode Island Medicaid enrollments increased about 10
92	92	twelve percent (12%) as people lost their jobs and health insurance. 11
93	93	(19) During the pandemic, MCO private insurance companies earned record profits while 12
94	94	health care providers such as hospitals suffered severe financial losses from deferred elective 13
95	95	medical procedures. 14
96	96	(20) Rhode Island EOHHS wants to continue to help private MCO insurance companies 15
97	97	by giving a set per person per month fee to health care providers in order that health care providers 16
98	98	assume “full risk capitation.” 17
99	99	(21) Rhode Island is the only state in the country that has an “Office of Health Insurance 18
100	100	Commissioner” whose top listed priority is to, “Guard the solvency of health insurers.” 19
101	101	(22) Private health insurance companies have more government funding and support than 20
102	102	any other type of business in Rhode Island. 21
103	103	(23) The Centers for Medicare and Medicaid Services (CMS) has issued guidance intended 22
104	104	to help states monitor and audit Medicaid and Children’s Health Insurance Program (CHIP) 23
105	105	managed care plans to address spread pricing and appropriately incorporate administrative costs of 24
106	106	the Pharmacy Benefit Managers (PBMs) when calculating their medical loss ratio (MLR). 25
107	107	(24) States that chose to establish minimum MCO MLRs with requirements to return 26
108	108	monies may recoup millions of Medicaid dollars from plans that failed to meet the State-set 27
109	109	minimum MLR thresholds. 28
110	110	(25) Given the $1.7 billion taxpayer dollars given to MCOs and the current lack of adequate 29
111	111	monitoring and oversight, the costs of audits set forth by this legislation are justified and necessary. 30
112	112	(26) The executive office proposes to begin Medicaid billing for inpatient substance use 31
113	113	disorder recovery facilities, pursuant to the previously issued waiver of the Institute of Mental 32
114	114	Disease exclusion rule, facilitating the raising of rates in a budget-neutral manner. 33
115	115	SECTION 2. Chapter 40-8 of the General Laws entitled "Medical Assistance" is hereby 34
116	116
117	117
118	118	LC001115 - Page 4 of 5
119	119	amended by adding thereto the following section: 1
120	120	40-8-33. Medicaid programs audit, assessment and improvement. 2
121	121	(a) The auditor general, in consultation with the executive office of health and human 3
122	122	services, shall hire and supervise an outside contractor or contractors to audit the state's managed 4
123	123	care entities in order to determine whether managed care entities are providing savings, access and 5
124	124	outcomes that are better than what could be obtained under a fee-for-service program managed by 6
125	125	the state. 7
126	126	(b) Managed care entities shall provide information necessary to conduct this audit, as well 8
127	127	as all legally required audits, in a timely manner as requested by the outside contractors. 9
128	128	(c) Failure of a managed care entity to provide such information in a timely manner shall 10
129	129	permit the state to seek penalties and terminate the managed care entity’s Medicaid contract. 11
130	130	(d) Staff and outside contractors working on the audit shall not have relevant financial 12
131	131	connections to managed care entities or the outcome of the audit. 13
132	132	(e) The auditor general shall present the results of the audit to the public and general 14
133	133	assembly within six (6) months after the effective date of this section. 15
134	134	(f) If the audit concludes that a fee-for-service state-run Medicaid program could provide 16
135	135	better savings, access and outcomes than the current managed care system, the office of health and 17
136	136	human services and the auditor general shall develop a plan for the state to transition to a state-run 18
137	137	fee-for-service program within two (2) years from the effective date of this section. 19
138	138	(g) Contracts with managed care entities shall include terms that: 20
139	139	(1) Allow the state to transition to a fee-for-service state-run Medicaid program within two 21
140	140	(2) years from the effective date of this section; 22
141	141	(2) Require managed care entities to meet a medical loss ratio (MLR) of greater than ninety 23
142	142	percent (90%), net of pharmacy benefit manager costs related to spread pricing; 24
143	143	(3) Require managed care entities to remit to the state Medicaid program excess capitation 25
144	144	revenues that fail to meet the ninety percent (90%) MLR; and 26
145	145	(4) Set forth penalties for failure to meet contract terms. 27
146	146	(h) The attorney general shall have authority to pursue civil and criminal actions against 28
147	147	managed care entities to enforce state contractual obligations and other legal requirements. 29
148	148	SECTION 3. This act shall take effect upon passage. 30
149	149	========
150	150	LC001115
151	151	========
152	152
153	153
154	154	LC001115 - Page 5 of 5
155	155	EXPLANATION
156	156	BY THE LEGISLATIVE COUNCIL
157	157	OF
158	158	A N A C T
159	159	RELATING TO HUMAN SE RVICES -- MEDICAL ASSISTANCE
160	160	***
161	161	This act would require the auditor general to oversee an audit of Medicaid programs 1
162	162	administered by managed care organizations. The auditor general would report findings to the 2
163	163	general assembly and the director of the executive office of health and human services (EOHHS) 3
164	164	within six (6) months of the passage of this act. The director of EOHHS would provide the general 4
165	165	assembly with a plan within two (2) years of the passage of this act to end privatized managed care 5
166	166	and transition to a fee-for-service state-run program if the audit demonstrates the plan would result 6
167	167	in savings and better access and healthcare outcomes. 7
168	168	This act would take effect upon passage. 8
169	169	========
170	170	LC001115
171	171	========