HB4118: Program Integrity for Medicaid and the Children's Health Insurance Program Act

• Creates framework for Illinois to implement waste, fraud, and abuse detection and prevention for Medicaid and CHIP programs using five technologies: provider data verification, clinical code editing, predictive modeling and analytics, fraud investigative services, and claims audit and recovery services.

• Requires shift from retrospective "pay and chase" model to prospective pre-payment fraud detection model to comply with federal Patient Protection and Affordable Care Act and Health Care and Education Reconciliation Act of 2010 requirements.

• Mandates State issue request for information by November 1, 2012, followed by formal request for proposals within 90 days to select contractors meeting technical, analytical, and clinical expertise standards under Illinois Procurement Code.

• Requires Department of Healthcare and Family Services submit reports to General Assembly at 3, 6, and 9 months after completion of first, second, and third implementation years detailing technology implementation, cost savings, fraud prevention effectiveness, and impacts on beneficiary access and provider operations.

• Authorizes use of shared savings model where State's direct costs are percentage of actual savings achieved, with portion of savings potentially funding implementation expenditures.