(1) (a) The general assembly finds that:
Increasing health care costs in Colorado's medicaid program creates challenges forthe state's budget. Further, the increasing health care costs do not necessarily reflect improvements in either health outcomes for patients or in patient satisfaction with the care received;
Moreover, the fee-for-service payment model may not support or align financiallywith evolving care coordination and delivery systems;
The reform of medicaid payment policies offers a significant opportunity for thestate to contain costs and improve quality;
New payment methodologies, including global payments, have been developed torespond to rising costs and the complexities of health care delivery. Opportunities now exist to explore, test, and implement such payment reforms in the medicaid program.
The state department should explore how these new payment methodologies mayresult in improved health outcomes and patient satisfaction and support the financial sustainability of the medicaid program; and
The state department shall evaluate how successful payment projects could be replicated and incorporated within the state department's statewide managed care system.
(b) Therefore, the general assembly declares that Colorado should build upon ongoing reforms of health care delivery in the medicaid program by implementing a pilot program within the structure of the state department's statewide managed care system that encourages the use of new and innovative payment methodologies, including global payments.
(2) (a) There is hereby created the medicaid payment reform and innovation pilot program for purposes of fostering the use of innovative payment methodologies in the medicaid program that are designed to provide greater value while ensuring good health outcomes and client satisfaction.
(b) (I) The state department shall create a process for interested contractors of the state department's statewide managed care system to submit payment projects for consideration under the pilot program. Payment projects submitted pursuant to the pilot program may include, but need not be limited to, global payments, risk adjustment, risk sharing, and aligned payment incentives, including but not limited to gainsharing, to achieve improved quality and to control costs.
The design of the payment project or projects must address the client population ofthe state department's statewide managed care system and be tailored to the region's health care needs and the resources of the state department's statewide managed care system.
A contractor of the state department's statewide managed care system shall work incoordination with the providers and MCEs contracted with the contractor of the state department's statewide managed care system in developing the payment project or projects.
(c) (I) The state department shall review and select payment projects to be included in the pilot program.
(II) For purposes of selecting payment projects for the pilot program, the state department shall consider, at a minimum:
The likely effect of the payment project on quality measures, health outcomes, andclient satisfaction;
The potential of the payment project to reduce the state's medicaid expenditures;
The state department's ability to ensure that inpatient and outpatient hospital reimbursements are maximized up to the upper payment limits, as defined in 42 CFR 447.272 and 42 CFR 447.321 and calculated by the state department periodically;
The client population served by the state department's statewide managed care system and the particular health needs of the region;
The business structure or structures likely to foster cooperation, coordination, andalignment and the ability of the contractor of the state department's statewide managed care system to implement the payment project, including the resources available to the contractor of the state department's statewide managed care system and the technological infrastructure required; and
The ability of the contractor of the state department's statewide managed care systemto coordinate among providers of physical health care, behavioral health care, oral health care, and the system of long-term care services and supports.
(III) For payment projects not selected by the state department, the state department shall respond to the contractor of the state department's statewide managed care system, in writing, stating the reason or reasons why the payment project was not selected. The state department shall send a copy of the response to the joint budget committee of the general assembly, the health and human services committee of the senate, and the health, insurance, and environment committee of the house of representatives, or any successor committees.
(d) (I) The payment projects selected for the program must be for a period of at least one year and must not extend beyond the length of the contract with the contractor of the state department's statewide managed care system. The provider contract must specify the payment methodology utilized in the payment project.
Repealed.
MCEs participating in the pilot program are subject to the requirements of sections25.5-5-402 (10) and 25.5-5-408 (1)(e) and (1)(f), as applicable.
Payments made to MCEs under the pilot program shall account for prospective,local community or health system cost trends and values, as measured by quality and satisfaction measures, and shall incorporate community cost experience and reported encounter data to the extent possible to address regional variation and improve longitudinal performance.
Notwithstanding any provisions of this section or state board rules to the contrary, itis the intent of the general assembly that total payments, adjustments, and incentives will be budget-neutral with respect to state expenditures. The state department shall not enter into a contract with a provider pursuant to this section if the state department estimates that total payments to the provider will be greater than without the contract.
Pilot program participants shall provide data and information to the state departmentand any designated evaluator concerning health outcomes, cost, provider participation and satisfaction, client satisfaction, and any other data and information necessary to evaluate the efficacy of the payment methodology.
(a) The state department shall submit a report to the joint budget committee of the general assembly, the health and human services committee of the senate, or any successor committee, and the health and environment committee of the house of representatives, or any successor committee, as follows:
On or before February 1, 2013, concerning the design and implementation of the pilotprogram, including a description of any payment projects received by the state department and the time frame for implementation;
On or before September 15, 2014, concerning the pilot program as implemented,including but not limited to an analysis of the initial data and information concerning the utilization of the payment methodology, quality measures, and the impact of the payment methodology on health outcomes, cost, provider participation and satisfaction, and patient satisfaction;
On or before September 15, 2015, concerning the program as implemented, including but not limited to an analysis of the data and information concerning the utilization of the payment methodology, including an assessment of how the payment methodology drives provider performance and participation and the impact of the payment methodology on quality measures, health outcomes, cost, provider satisfaction, and patient satisfaction, comparing those outcomes across patients utilizing existing state department data;
On or before April 15, 2017, and each April 15 that the program is being implemented, concerning the program as implemented, including but not limited to an analysis of the data and information concerning the utilization of the payment methodology, including an assessment of how the payment methodology drives provider performance and participation and the impact of the payment methodology on quality measures, health outcomes, cost, provider satisfaction, and patient satisfaction, comparing those outcomes across patients utilizing existing state department data. Specifically, the report must include:
An evaluation of all current payment projects and whether the state department intends to extend any current payment project into the next fiscal year;
The state department's plans to incorporate any payment project into the larger medicaid payment framework;
A description of any payment project proposals received by the state departmentsince the prior year's report, and whether the state department intends to implement any new payment projects in the upcoming fiscal year; and
The results of the state department's evaluation of payment projects pursuant to paragraph (a.5) of this subsection (4).
(a.5) The state department shall evaluate each payment project to determine:
Whether the payment project offers the potential for better patient outcomes or improved care and the impact of better outcomes and improved care on medicaid costs;
Whether the payment project creates the opportunity for administrative efficiency inthe medicaid program;
Whether the payment project is budget neutral or generates savings for the medicaidprogram; and
Whether the payment project resulted in changes in provider participation in themedicaid program, and the nature of those changes.
(b) For purposes of evaluating the pilot program and payment methodologies, the state department may collaborate with a nonprofit entity or an institution of higher education to analyze and verify data and information received from pilot participants and to evaluate quality measures and the cost-effectiveness of the payment reforms.
The state department shall seek any federal authorization necessary to implement thepilot program.
The state department may promulgate any rules necessary to implement the pilotprogram.
Source: L. 2012: Entire section added, (HB 12-1281), ch. 246, p. 1182, § 2, effective June 4. L. 2016: (1)(a)(V), (2)(c)(I), (2)(c)(III), (2)(d)(I), (4)(a)(II), and (4)(a)(III) amended and
(1)(a)(VI), (4)(a)(IV), and (4)(a.5) added, (HB 16-1407), ch. 152, p. 453, § 1, effective May 4. L. 2018: (1)(a)(VI), (1)(b), (2)(b), (2)(c)(II), (2)(c)(III), (2)(d)(I), and (2)(d)(III) amended and (2)(d)(II) repealed, (HB 18-1431), ch. 313, p. 1889, § 6, effective August 8.
Editor's note: Subsection (2)(c)(II)(C) is similar to former § 25.5-5-402 (6)(b)(II), as it existed prior to 2018. For a detailed comparison of this section, see the comparative tables located at the back of the index.