June 11, 2019

A Medicaid Reform that Passed Unanimously

Moher holding her baby, sitting on floor in front of couchIt’s hard to believe, but true – the omnibus Medicaid reform bill headed to Gov. Pritzker was passed without a single dissenting vote in either of Illinois’ famously disputatious legislative chambers.

It might be because the need for change was so unambiguously clear: the difficulty people had enrolling and in the program, the vast backlog of applications, the likelihood of losing your coverage in the course of the renewal – or “redetermination” – process, and growing frequency of claims denials. It also represents many months of negotiation and compromise by all parties.

All of the above increased as Illinois transitioned to Medical managed care, starting in 2011, and spiked up as managed care went from 30 counties to all 102 with the launch of HealthChoice Illinois in January 2018. About 2.1 million of Illinois’ 2.9 million Medicaid members are now in managed care.

The bill (SB 1321) calls for a complete review of the Medicaid redetermination process to identify changes that would let more members be renewed automatically. It requires the Department of Health and Family Services to set up a dispute resolution process and be the arbiter in disagreements about payment disputes. One provision will help the department to acquire analyze claim denials.

The bill “lays the foundation to begin addressing” hospitals’ biggest concerns, the Illinois Health and Hospital Association said in a statement, adding that growth of denials puts “extreme financial pressure on hospitals and jeopardizes access to care for all Medicaid beneficiaries.” Hospitals have been increasingly vocal about the growth in denials, charging that 1 in 4 claims was now being denied. The IHA recently posted highlights of the agreement reached that formed the basis of the legislation.

The Illinois Association of Medicaid Health Plans, which represents the six Medicaid managed care insurers, or MCOs, also supported the measure. While claiming the actual denial rate was 11%, IAMPH worked with HFS to publish a Comprehensive Billing Manual for providers and to help develop standardized guides to help lower claim denial rates.

In many cases, claims are denied because members have lost coverage in redeterminations. According to Protect Our Care IL, which was active in the collaborative process of the bill’s development, more than a third of beneficiaries lose their benefits for some time at renewal. POCIL worked on language relating to streamlining the application and renewal process by relying on electronic eligibility data and limiting the need to submit additional documentation.

Currently, the backlog of unprocessed Medicaid applications is still over 100,000, although considerably down from last year; redeterminations are also backlogged. Both problems were aggravated by a computer systems change and diminished staff resources in the wake of the state’s budget crisis. Last May, the Shriver Center, with the Legal Council for Health Justice and the law firm Sidley Austin, filed a motion in federal court to enforce a 1979 Illinois consent decree – the so-called Cohen decree – that requires the state to provide temporary medical benefits on request to people whose Medicaid cases have been delayed past the 45-DAY federal limit.

As POCIL notes, the measure as passed is a compromise among the many stakeholders, “but it still represents an important step towards addressing the crisis we have experienced with both initial applications and renewals. The real action will be in implementation, where we plan to continue working with the Administration to make sure we end this crisis of constant Medicaid churn and lapses in coverage.”

The bill, sponsored by Sen. Heather Steans and Rep. Greg Harris, the majority leader, will be effective immediately; the redetermination process review will be due 90 days after that.

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