The bill under consideration aims to address issues with the management of Medicaid programs in Rhode Island, specifically focusing on the role of Managed Care Organizations (MCOs). It includes legislative findings that question the effectiveness of MCOs in terms of cost, access, and outcomes, and points out the lack of significant oversight by the state. The bill references the potential advantages of a state-run fee-for-service (FFS) system, citing Connecticut's experience as an example. It also notes the high Medicaid spending per capita in Rhode Island and the increased profits of MCOs during the COVID-19 pandemic.

The proposed legislation mandates an audit of the state's MCOs by an outside contractor under the supervision of the auditor general. This audit is to determine if MCOs are more effective than a state-run FFS program. The bill requires MCOs to cooperate with the audit, with penalties for non-compliance, including contract termination. If the audit favors a state-run FFS program, a transition plan must be developed within two years. The bill also stipulates that MCO contracts include terms for transitioning to a state-run FFS program, adherence to a medical loss ratio of over 90%, the return of excess capitation revenues, and penalties for non-compliance. The attorney general is empowered to take action against MCOs for violations. The act is set to take effect upon passage.