Managed care contract bill clears first round

Senators advanced a bill from general file March 29 that would outline the parameters of future medical assistance contracts for delivery of behavioral health service in Nebraska.

LB1158, introduced by Omaha Sen. Bob Krist, would require an at-risk managed care model for behavioral health managed care contacts after July 1, 2012.

Krist said at-risk managed care contracts allow contractors to make a fair profit while improving care to those who are served by them.

As introduced, the bill would:
• cap administrative contract spending at 7 percent;
• restrict contract profits to a maximum of 2.5 percent per year;
• provide for a minimum medical loss ratio of 85 percent;
• require that a minimum of 1 percent of contract payment be contingent on performance metrics; and
• provide for reinvestment of any profits in excess of the contract amount and any fees imposed by the state Department of Health and Human Services (DHHS) to fund community-based services.

A Health and Human Services Committee amendment, adopted 29-0, would require the department, when contracting for managed care plans, to include the Nebraska Behavioral Health Services Act requirements for behavioral health managed care contracts.

Krist offered an amendment, adopted 30-0, that made several changes to the percentages outlined in the bill and would:
• allow administrative spending to exceed 7 percent if necessary to improve the health status of the population being served, but would cap administrative spending at 10 percent;
• restrict contract profits and losses to a maximum of 3 percent per year as a percentage of aggregate income and revenue; and
• require that a minimum of 0.25 percent of contract payment be contingent on performance metrics.

“All of these numbers were changed to ensure fair and open competition,” Krist said.

An amendment offered by Kearney Sen. Galen Hadley, adopted 32-0, removed the provision requiring reinvestment of any profits in excess of the contract amount and any fees imposed by the state Department of Health and Human Services (DHHS) to fund community-based services.

Hadley said the provision would bypass the Legislature’s standard appropriations process and would hinder lawmakers’ oversight of how money is spent by state agencies.

Hoskins Sen. Dave Bloomfield also offered an amendment, adopted 34-0, that clarified the definition of stakeholders within the bill.

Senators advanced LB1158 to select file on a 34-0 vote.