House Bill No. 538
Introduced By _______________________________________________________________________________
A Bill for an Act entitled: "An Act creating a pilot project for the use of medical savings accounts in conjunction with the Montana medicaid program; providing for the design of the project; providing for administration of the project by the department of public health and human services; providing the powers and duties of the department; requiring contracts for the administration of medical savings accounts and the provision of high-deductible health care coverage; requiring reports and evaluation of the project; and providing an effective date and a termination date."
Be it enacted by the Legislature of the State of Montana:
NEW SECTION. Section 1. Legislative findings and purpose. The legislature finds that among the contributing causes of the increase in the cost of the medicaid program has been the lack of sufficient incentive by participants in the medicaid program to conserve government funds used to pay for medicaid medical benefits. The legislature believes that treatment of medicaid funds as the personal funds of medicaid recipients would provide that needed incentive. The purpose of [sections 1 through 10] is to create a pilot program by which the effect of that incentive may be tested by providing high-deductible health care coverage to a limited number of medicaid-eligible adults and minors and allowing those participants in a pilot project to keep a part of the state money that is not used by the participants for health care expenses below the amount at which coverage begins. In this way, the legislature will test the use of personal financial incentive to help reduce medicaid costs and educate medicaid consumers to make informed decisions about appropriate use of health care.
NEW SECTION. Section 2. Definitions. As used in [sections 1 through 10], the following definitions apply:
(1) "Department" means the department of public health and human services provided for in 2-15-2201.
(2) "Health care expenses" means expenses incurred for health care provided by the medicaid program.
(3) "High-deductible health care coverage" means coverage for the payment of health care expenses by a group medical expense disability policy, membership contract, subscriber contract, health services agreement, or certificate of insurance provided by a health insurer, health service corporation, or health maintenance organization having a deductible amount for each participant in an amount determined by the department.
(4) "Medicaid" means the Montana medicaid program established by 53-6-101.
(5) "Medical savings account" or "account" means an account established for the purposes of [sections 1 through 10] with a state or federally chartered bank, savings and loan association, credit union, trust company, or other corporate fiduciary determined by the department.
(6) "Participant" means an individual eligible for medicaid chosen by the department in the manner provided in [section 5] to participate in the pilot project.
(7) "Pilot project" or "project" means the medicaid medical savings account pilot project established by [sections 1 through 10].
NEW SECTION. Section 3. Medicaid medical savings accounts -- pilot project elements -- project timelines -- contracts. (1) The department shall design a pilot project in accordance with [section 4] and this section for the use of medical savings accounts in conjunction with the Montana medicaid program. The department shall establish and administer the medical savings account and high-deductible health care coverage parts of the pilot project following approval of the waivers requested by the department pursuant to [section 6].
(2) The pilot project consists of the following elements:
(a) a design plan prepared by the department pursuant to a contract required by [section 4];
(b) a request submitted by the department pursuant to [section 6] to the U.S. health care financing administration for waivers, pursuant to 42 U.S.C. 1315, of requirements of Title XIX of the Social Security Act, 42 U.S.C. 1396, et seq.;
(c) establishment, funding, and management by the department pursuant to a contract required by [section 7] of medical savings accounts for participants chosen pursuant to [section 5];
(d) high-deductible health care coverage purchased by contract by the department in accordance with [section 8] for each participant for each fiscal year during the time of the pilot project;
(e) evaluation of the pilot project in the manner provided by [section 9] and reports to the legislative audit division and to the legislative fiscal division in the manner required by [section 10].
(3) The pilot project begins with commencement of the design plan provided by [section 4]. Elements of the project as provided in subsection (2) of this section may be begun and completed at times determined by the department consistent with [sections 1 through 10]. However, medical savings accounts and high-deductible health care coverage for each participant must begin no later than January 1, 1999.
(4) Requests for proposals and contracts required or authorized by [sections 1 through 10] must comply in all respects with the provisions of Title 18. The department may also consult with the department of administration, the state insurance commissioner, and recognized experts in contracts for the types of services required or authorized by [sections 1 through 10] before committing the state to those contracts.
NEW SECTION. Section 4. Pilot project design plan required. The department shall by contract create a design plan for the pilot project. The design plan must consist of the following project elements and the projected time periods and goals for each element:
(1) a report on participant profiles for use by insurers or others who may provide the high-deductible health care coverage and a cost analysis for provision of that coverage;
(2) a calculation for each fiscal year of the project of the number of participants to be chosen pursuant to [section 5], the amounts deposited for each participant into the participant's medical savings account, the projected cost per participant, and the annual projected savings resulting from the project prior to each project fiscal year;
(3) a request for proposals to develop the request for waivers to be submitted to the U.S. health care financing administration pursuant to [section 6];
(4) development of requests for proposals by which the department would contract for the administration of participant medical savings accounts pursuant to [section 7], including a nondiscriminatory methodology by which the department will determine the amount remaining within an account to be paid to a participant pursuant to [section 7(3)], and the provision of high-deductible health care coverage pursuant to [section 8];
(5) development of a methodology for measuring project outcomes in subject areas, including but not limited to cost, access, and health status of the project participants, as provided in [section 9];
(6) the method and subjects of an independent assessment of the pilot project in areas, including but not limited to cost-effectiveness, access, and quality, as provided in [section 9]; and
(7) the method and subjects of the reports required by [section 10].
NEW SECTION. Section 5. Choice of pilot project participants. The department shall, in a manner chosen by the department, offer participation in the pilot project to adult and minor individuals chosen in a manner to accurately represent those persons in Montana receiving benefits from the medicaid program. Participation in the pilot project by those individuals chosen by the department is voluntary. In offering participation in the project, the department shall explain the aspects and objectives of the project as they will affect participants and explain the responsibilities of participants. The department shall limit the number of participants to not less than 1,000 and not more than 5,000.
NEW SECTION. Section 6. Request by department for waivers. The department shall, by request for proposals, develop and submit to the U.S. health care financing administration a request for waivers from federal statutes and regulations necessary to obtain federal financial participation in the pilot project to the same extent that the federal government participates in the medicaid program. Contracts entered into by the department for this purpose must provide for the continuing support of the contractor during waiver negotiations.
NEW SECTION. Section 7. Medical savings accounts -- administration -- payments -- terms and conditions. (1) Upon approval of the waivers requested pursuant to [section 6], the department shall, by request for proposals, provide for the administration of a medical savings account for each participant. The term of a contract entered into pursuant to the requests may be for a fiscal year or for another period determined by the department that is consistent with appropriations for and the objectives of the pilot project.
(2) (a) Upon receipt of an appropriation for the purposes of this section, the department shall pay to the administrator of each participant's medical savings account an amount of money determined by the department and based upon the average statewide cost for medical assistance for each individual in the medicaid program.
(b) A contract for the administration of the pilot project must include payment of the amount into the account of each participant at the beginning of each fiscal year during the time of the project. Administration must also include payment of participants' medical claims from the accounts, recordkeeping necessary for proper administration of the payments and accounts, and payment of amounts remaining in the account to the participant as provided in subsection (3).
(c) The department may require as part of the contract for the administration of the accounts that the contractor provide educational information to participants and accounting, auditing, and recordkeeping services necessary for project evaluation and reports as required by [sections 9 and 10].
(3) The terms of the contract for the administration of the pilot project must include payment within 90 days after the end of the fiscal year to each project participant, and each participant may retain an amount of money determined by the department and remaining in the account at the end of a fiscal year. The terms of the use of an account by a participant may also include requirements necessary for the proper administration and use of the account.
NEW SECTION. Section 8. High-deductible health care coverage required. Upon approval of the waivers requested pursuant to [section 6], the department shall, by request for proposals before the beginning of each fiscal year during the time of the pilot project, obtain high-deductible health care coverage for each participant. In making the request for proposals, the department shall provide to potential contractors the information concerning the project and participants reasonably determined by the department to be needed by potential contractors to adequately assess the degree of financial risk to be assumed by the successful contractor. The contract with the department must require the contractor to provide high-deductible health care coverage for each participant beginning with each fiscal year and ending at the end of each fiscal year during the time of the project.
NEW SECTION. Section 9. Project evaluation -- outcomes measurement -- independent assessment. (1) The department shall, by request for proposals, provide for evaluation of the project outcomes at the completion of the project and may provide for evaluation at other times as the department may determine. The evaluation must include an evaluation of the cost-effectiveness of the project, the degree of access to health care available to participants, and the health status of participants. A contract for project evaluation may be combined by the department with another contract made by the department pursuant to [sections 1 through 10].
(2) The department shall, by request for proposals, provide for an independent assessment of the project by a corporation, firm, partnership, or other business entity knowledgeable in the measurement of cost-effectiveness, access, quality of care, and health status of individuals receiving health care. A contract for the assessment may not be combined with another contract made by the department pursuant to [sections 1 through 10]. A contract required by this subsection must also require the contractor to provide information developed by the assessment to the U.S. health care financing agency or another agency of the federal government.
NEW SECTION. Section 10. Reports required. The department shall, at the conclusion of the project, provide a report to the legislative audit division and the legislative fiscal division containing those matters determined in the evaluation and independent assessment required by [section 9].
NEW SECTION. Section 11. Codification instruction. [Sections 1 through 10] are intended to be codified as an integral part of Title 53, chapter 6, and the provisions of Title 53, chapter 6, apply to [sections 1 through 10].
NEW SECTION. Section 12. Effective date. [This act] is effective July 1, 1997.
NEW SECTION. Section 13. Termination. [This act] terminates January 1, 2001.