(1) To improve health outcomes and lower health care costs, the state department may develop payments to providers that are based on quantifiable performance or measures of quality of care. These performance-based payments may include, but are not limited to, payments to:

(a) Primary care providers;

(b) Federally qualified health centers;

(c) Providers of long-term care services and supports; and

(d) Behavioral health providers, including, but not limited to:

(I) Community mental health centers, as defined in section 27-66-101; and

(II) Entities contracted with the state department to administer the statewide system of community behavioral health care established in section 25.5-5-402.

(2) (a) Prior to implementing performance-based payments in the medicaid program pursuant to this article 4 and articles 5 and 6 of this title 25.5, including performance-based payments set forth in this section, the state department shall submit to the joint budget committee:

(I) (A) Evidence that the performance-based payments are designed to achieve budget savings; or

(B) A budget request for costs associated with the performance-based payments;

(II) The estimated performance-based payments compared to total reimbursements for the affected service; and

(III) A description of the stakeholder engagement process for developing the performance-based payments, including the participants in the process and a summary of the stakeholder feedback, and the state department's response to stakeholder feedback.

(b) The information required pursuant to subsection (2)(a) of this section must be provided on or before November 1 for performance-based payments that will take effect in the following fiscal year unless the state department includes with its submission an explanation of the need for faster implementation of the payment. If faster implementation is requested, the state department shall provide the information at least three months prior to the implementation of the performance-based payments unless compliance with federal law necessitates shorter notice.

(3) On or before November 1, 2017, and on or before November 1 each year thereafter, the state department shall submit a report to the joint budget committee, the public health care and human services committee of the house of representatives, and the health and human services committee of the senate, or any successor committees, describing rules adopted by the state board and contract provisions approved by the centers for medicare and medicaid services in the preceding calendar year that authorize payments to providers based on performance. Notwithstanding the provisions of section 24-1-136 (11)(a)(I), the report required pursuant to this subsection (3) continues indefinitely. The report must include, at a minimum:

(a) A description of performance-based payments included in state board rules, including which performance standards are targeted with each performance-based payment;

(b) A description of the goals and objectives of the performance-based payments, and how those goals and objectives align with other quality improvement initiatives;

(c) A summary of the research-based evidence for the performance-based payments, to the extent such evidence is available;

(d) A summary of the anticipated impact and clinical and nonclinical outcomes of implementing the performance-based payments;

(e) A description of how the impact or outcomes will be evaluated;

(f) An explanation of steps taken by the state department to limit the administrative burden on providers;

(g) A summary of the stakeholder engagement process with respect to each performance-based payment, including major concerns raised through the stakeholder process and how those concerns were remediated;

(h) When available, evaluation results for performance-based payments that were implemented in prior years; and

(i) A description of proposed modifications to current performance-based payments.