March 30, 2001





ENGROSSED

HOUSE BILL No. 1871

_____


DIGEST OF HB 1871 (Updated March 28, 2001 4:17 PM - DI 98)



Citations Affected: IC 12-15.

Synopsis: Medicaid and certain hospitals. Exempts certain Medicaid managed care contractors from specified statutory provisions. Removes December 31, 2000, expiration date of provisions that: (1) require a Medicaid managed care contractor to regard a hospital as a contracted provider which provides services to certain patients under a capitated prepayment managed care system; (2) prohibit a Medicaid managed care contractor from providing incentives or mandates to primary medical providers to direct certain Medicaid recipients to contracted hospitals other than a hospital in a city where the recipient resides, with certain exceptions; and (3) require certain Medicaid hospitals to comply with eligibility verification and medical management programs negotiated under the hospital's most recent contract or agreement with the Medicaid managed care contractor. Establishes, through 2002, reimbursement rates for a hospital that does not have a contract with the office of Medicaid policy and planning's managed care contractor but has previously contracted to provide services under the Medicaid managed care program. Prohibits providing certain hospitals less reimbursement when the patient was referred to a hospital in the city where the patient resides. Prohibits certain hospitals from declining nonemergency services to an individual in the Medicaid risk based program. (The introduced version of this bill was prepared by the interim study committee on Medicaid oversight.)

Effective: December 30, 2000 (retroactive).





Brown C, Dillon
(SENATE SPONSORS _ SMITH S, MILLER, ROGERS, LANDSKE)




    January 17, 2001, read first time and referred to Committee on Public Health.
    February 20, 2001, amended, reported _ Do Pass.
    February 27, 2001, read second time, ordered engrossed.
    February 28, 2001, engrossed.
    March 5, 2001, read third time, passed. Yeas 97, nays 0.

SENATE ACTION

    March 7, 2001, read first time and referred to Committee on Health and Provider Services.
    March 29, 2001, amended, reported favorably _ Do Pass.







March 30, 2001

First Regular Session 112th General Assembly (2001)


PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional provision adopted), the text of the new provision will appear in this style type. Also, the word NEW will appear in that style type in the introductory clause of each SECTION that adds a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts between statutes enacted by the 2000 General Assembly.


ENGROSSED

HOUSE BILL No. 1871



    A BILL FOR AN ACT to amend the Indiana Code concerning Medicaid.

Be it enacted by the General Assembly of the State of Indiana:

SOURCE: IC 12-15-11.5-0.5; (01)EH1871.1.1. -->     SECTION 1. IC 12-15-11.5-0.5 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE DECEMBER 30, 2000 (RETROACTIVE)]: Sec. 0.5. This chapter does not apply to a managed care contractor that, on or before July 1, 2000, did not directly contract with a hospital (as defined in section 1 of this chapter) for the provision of services under the office's managed care program.
SOURCE: IC 12-15-11.5-2; (01)EH1871.1.2. -->     SECTION 2. IC 12-15-11.5-2, AS ADDED BY P.L.142-2000, SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE DECEMBER 30, 2000 (RETROACTIVE)]: Sec. 2. (a) The office's managed care contractor shall regard a hospital as a contracted provider in the office's managed care services program, which provides a capitated prepayment managed care system, for the provision of medical services to each individual who:
        (1) is eligible to receive services under IC 12-15 and has enrolled in the office's managed care services program;
        (2) resides in the same city in which the hospital is located; and
        (3) has selected a primary care provider who:
            (A) is a contracted provider with the office's managed care contractor; and
            (B) has medical staff privileges at the hospital.
    (b) This section expires December 31, 2000.
SOURCE: IC 12-15-11.5-3; (01)EH1871.1.3. -->     SECTION 3. IC 12-15-11.5-3, AS ADDED BY P.L.142-2000, SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE DECEMBER 30, 2000 (RETROACTIVE)]: Sec. 3. (a) The office or the office's managed care contractor may not provide incentives or mandates to the primary medical provider to direct individuals described in section 2 of this chapter to contracted hospitals other than a hospital in a city where the patient resides.
    (b) The prohibition in subsection (a) includes methodologies that operate to lessen a primary medical provider's payment due to the provider's referral of an individual described in section 2 of this chapter to the hospital in the city where the individual resides.
    (c) If a hospital's reimbursement for nonemergency services that are provided to an individual described in section 2 of this chapter is established by:
        (1) statute; or
        (2) an agreement between the hospital and the individual's managed care contractor;
the hospital may not decline to provide nonemergency services to the individual on the basis that the individual is enrolled in the Medicaid risk based program.

    (d) A hospital that provides services to individuals described in section 2 of this chapter shall comply with eligibility verification and medical management programs negotiated under the hospital's most recent contract or agreement with the office's managed care contractor.
    (c) (e) This section expires December 31, 2000. 2002.
     (f) Notwithstanding subsection (a), this section does not prohibit the office or the office's managed care contractor from directing individuals described in section 2 of this chapter to a hospital other than a hospital in a city where the patient resides if both of the following conditions exist:
        (1) The patient is directed to a hospital other than a hospital in a city where the patient resides for the purpose of receiving medically necessary services.
        (2) The type of medically necessary services to be received by the patient cannot be obtained in a hospital in a city where the patient resides.

SOURCE: IC 12-15-11.5-4.1; (01)EH1871.1.4. -->     SECTION 4. IC 12-15-11.5-4.1 IS ADDED TO THE INDIANA

CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE DECEMBER 30, 2000 (RETROACTIVE)]: Sec. 4.1. (a) A hospital that:
        (1) does not have a contract in effect with the office's managed care contractor; but
        (2) previously contracted or entered into an agreement with the office's managed care contractor for the provision of services under the office's managed care program;
shall be reimbursed for services provided to individuals described in section 2 of this chapter at rates equivalent to the rates negotiated under the hospital's most recent contract or agreement with the office's managed care contractor, as adjusted for inflation by the inflation adjustment factor described in subsection (b). However, the adjusted rates may not exceed the established Medicaid rates paid to Medicaid providers who are not contracted providers in the office's managed health care services program.
    (b) For each state fiscal year beginning after June 30, 2001, an inflation adjustment factor shall be applied under subsection (a) that is the average of the percentage increase in the medical care component of the Consumer Price Index for all Urban Consumers and the percentage increase in the Consumer Price Index for all Urban Consumers, as published by the United States Bureau of Labor Statistics, for the twelve (12) month period ending in March preceding the beginning of the state fiscal year.
    (c) This section expires December 31, 2002.

SOURCE: ; (01)EH1871.1.5. -->     SECTION 5. An emergency is declared for this act.