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HB 2665

DHFS-PACE-RATE REFORM

104th Regular Session Introduced by Thaddeus Jones and 1 co-sponsor

HB 2665 requires Illinois to overhaul PACE payments with actuarially certified blended rates (30% HCBS, 70% SNF) to reflect high-acuity care and high drug costs.

Added Co-Sponsor Rep. Camille Y. Lilly
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Bill Summary · HB 2665

Summary — HB 2665 (DHFS — PACE Rate Reform)

Status: Introduced (Illinois) — introduced Feb 2025; public hearing 4/1/2025; left pending in committee. Co-sponsor added: Rep. Camille Y. Lilly (4/10/2025). Companion: SB 2785.

Note: the source document also includes an unrelated Arizona appropriation text for Gila County. The summary below concerns the Illinois HB 2665 (Program of All‑Inclusive Care for the Elderly — PACE).

Main purpose

HB 2665 directs the Illinois Department of Healthcare and Family Services (HFS/DHFS) to reform the rate‑setting methodology for PACE (Program of All‑Inclusive Care for the Elderly). The goal is to create payment rates that better reflect the acuity, comprehensive care needs, and higher expected costs of the PACE population.

Key provisions

  • Establishes a blended case‑mix based rate structure for PACE composed of:
    • 30% Home and Community‑Based Services (HCBS) case‑mix, and
    • 70% Skilled Nursing Facility (SNF) case‑mix. The 30/70 split is intended to represent the proportion of a comparable population that would reside in the community versus an institution if not enrolled in PACE.
  • Requires rates to reflect the comprehensive nature of PACE services and the higher‑risk/higher‑acuity characteristics of PACE participants, including care needs not always included in standard Medicaid managed care contracts.
  • Directs HFS to use actuarial methods when developing capitation rates for PACE organizations; rates must be actuarially certified prior to implementation.
  • Allows HFS to develop statewide rates and apply geographic adjustments. The primary data source should be each PACE organization's Medical Assistance Program cost and utilization data (and other data as deemed necessary).
  • Requires the rate methodology to include a mechanism to account for the costs of high‑cost drugs and treatments.
  • Requires HFS to calculate applicable upper payment limits consistent with federal law and consider the nursing home placement risk when estimating level of care.
  • Provides that HFS shall pay PACE organizations at a rate within the actuarially certified range as needed to mitigate negative impacts from the new methodology.
  • Applicability: the section applies to rates established on and after the bill’s effective date but not earlier than July 1, 2022.

Who is affected

  • PACE organizations operating in Illinois (providers and managed‑care entities that deliver comprehensive services to PACE participants).
  • PACE participants (older adults enrolled in PACE) — potentially affects access to services and care mix.
  • Illinois Department of Healthcare and Family Services (implementation, actuarial work, data collection).
  • State Medicaid spending and budget administrators (rate increases or restructuring could affect expenditures).

Procedural/timeline notes

  • Introduced in early Feb 2025; referred to Human Services, then Appropriations — Health & Human Services; considered at public hearing (4/1/2025) and left pending.
  • Actuarial certification is required before implementation; effective for rates set after the effective date but no earlier than July 1, 2022.

Potential impacts and considerations

  • Could increase per‑participant payments to reflect higher acuity and comprehensive services, improving financial sustainability for PACE providers and potentially preserving or expanding access for frail elders.
  • Could increase state Medicaid expenditures unless offset by savings elsewhere or covered by appropriations.
  • Requires robust actuarial analysis and reliable PACE program data; implementation complexity and transitional payment mitigation provisions may be needed to avoid provider disruption.
  • Interaction with federal Medicaid rules (upper payment limits, allowable services) will be important for compliance.

Compiled from official sources — confirm details with the bill’s official record.

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