The State Budget Aftermath - What's Next?

On May 25, 2012, the Illinois legislature voted to pass Senate Bill 2840, which will make drastic cuts to the state’s Medicaid program, in order to help close a $2.7 billion deficit. The news has been confusing, but the bottom line is that many of the programs which provide necessary health coverage to vulnerable populations of Illinoisans have been terminated or reduced, which will result in thousands of people losing health care coverage.

While those cuts are devastating, we remind ourselves that there are over 2 million people covered by Medicaid in Illinois—many of them covered through important expansions including the 100% Campaign, All Kids, Health Benefits with Disabilities, and FamilyCare. These coverage expansions largely remain intact and protected. We are heartened by the fact that our advocacy efforts, along with our colleagues, also staved off worse proposed cuts including the loss of coverage for tens of thousands of undocumented children with no health care alternatives.

Along with Senate Bill 2840, several other bills were passed which also affect Illinois’ Medicaid program including:

• HB5007: Amends the December 2010 Medicaid reform law that placed a moratorium on Medicaid expansions until 2013. This amendment extends that moratorium for two more years, until January 25, 2015. However, the bill also creates an exception for expansions that are federally approved and funded solely by federal and local government funds. This exemption was specifically designed to allow the Cook County 1115 waiver proposal (currently waiting for approval from CMS) to move forward, which would expand Medicaid to 250,000 low income, currently uninsured Cook County residents.
• SB 2194: Limits the number of unpaid Medicaid bills that can be rolled over from one year to the next, capping the dollar amount at $700 million in FY 2013. SB 2194, HA 3 sets more substantial definitions of charity care, so that hospitals will know what services they can provide to meet that definition, and thus retain tax exempt status 
• SB 3261 HA 2: Sets standards for eligibility for free care at non-profit hospitals

Moving forward toward the implementation of health care reform in 2014, Health & Disability Advocates will continue working to ameliorate the effect of these cuts by counseling individuals on their coverage options and training providers to build their capacity to help their patients access alternative coverage. There is not a solution to every cut but, in many instances, there are alternative programs to get necessary health care coverage to our populations.

We think it is important that while we all continue to fight against these cuts, we must immediately spring into action to help individuals transition to other coverage if at all possible.

For example, the elimination of the Illinois Cares Rx program is expected to affect over 100,000 low income older adults and people with disabilities who use the program to help them pay the premiums, deductibles, and cost-sharing of the Medicare Part program. If you or your clients have Illinois Cares Rx stories to share, please have them submit them to a special Facebook page here.

We have scheduled a webinar for June 15th to train providers how to ensure that their clients and patients use past medical bills to meet Medicaid spenddown, thus making them eligible for the federal Extra Help program which will cover all cost-sharing. We expect that tens of thousands of Illinois Cares Rx recipients could become eligible for Extra Help under this strategy.

We will continue to advocate as well as to move forward by counseling individuals, training providers and providing technical assistance to our partners to ensure that we maximize health care coverage and access in every way possible.

Stephanie Altman
Programs & Policy Director
Health & Disability Advocates

Choose Wisely, Illinois: Alternatives for Balancing the Medicaid Budget

On Thursday, April 19, 2012, the Governor released a proposal for the reduction of the current $2.7 billion Medicaid budget deficit. The proposal, developed with a group of legislators on the Medicaid Commission, includes $2 billion in cuts to eligibility levels, benefits, and payment rates to providers, and a $1 per pack increase in the cigarette tax. Some of the Governor’s most concerning proposals include eliminating the Illinois Cares Rx program, reducing eligibility for FamilyCare, eliminating the General Assistance Medical Program, eliminating the adult dental program, and requiring a co-pay from vulnerable populations utilizing federally qualified community health centers.

Many of these cuts will not be “fixed” by the implementation of the Affordable Care Act in 2014. For example, Illinois Cares Rx covers costs not covered under Medicare or the ACA such as premiums, deductibles, lower co-pays, and medications not covered in the Medicare formulary. The biggest misconception is that the ACA will fill the Medicare “donut hole.” It gradually reduces costs in the donut hole over the next 8 years but never completely eliminates that cost-sharing as Illinois Cares Rx does.

Other cuts may be “repaired” by the implementation of health care reform, such as coverage for low income parents, but at what cost? How much preventative care will be missed in the next 18 months which will cost the state more in expensive emergency or acute care after January 1, 2014?

Medicaid is a vital source of health care for many Illinoisans. Although the Medicaid program must become more efficient to safeguard taxpayer dollars, there are other alternatives to the proposed cuts. Solutions such as cutting prescription drug coverage, eligibility, or optional services are unacceptable and will drive up long-term state costs. The General Assembly and Governor have underfunded Medicaid for 20 years and the cuts do not need to all happen immediately; a multi-year solution is needed to balance the program budget. Furthermore, short term solutions, such as cutting prescription drug coverage, eligibility or optional services are unacceptable, and will only drive up long-term state costs. It is important for Illinois legislators to keep in mind that transformative Medicaid reforms currently being implemented and require time to work, and that The Medicaid budget cannot be balanced with Medicaid cuts alone. New revenue and savings from legislative changes in other budget areas must be applied to Medicaid.

Some of the proposed alternatives are:

Medicaid system Delivery reforms: Reforms such as the Care Coordination Innovations Project, Integrated Care Program, and other projects to better manage the care of some of the highest-need Medicaid patients need time to be implemented to see the full scope of savings and improved health outcomes.

Changes for Nursing Home and IMDs: Nursing homes and Institutions for Mental Disorders (IMDs) have excess capacity, resulting in thousands of empty beds across the state. Reducing the number of licensed beds could save Medicaid money. Refocusing efforts on community-based services, rather than institutional placement, would also reduce costs, and in some cases, qualify for more Federal funding. Also, Illinois could implement the nursing home bed tax, already approved by the federal government, which has not yet been implemented because the nursing home industry has not agreed on a formula to redistribute funds.

Stop paying for medically unnecessary, elective C-sections: C-sections are significantly more costly, require a longer recovery time for both the mother and often the infant, and can lead to complications due to premature birth. Nearly half of all C-sections in the U.S. are medically unnecessary, and it is estimated that Illinois’ Medicaid program spent between $54M and $76M on medically unnecessary C-sections in 2009.

For more information, see the Responsible Budget Coalition's fact sheet on alternatives to the cuts here.

Stephanie Altman
Program and Policy Director
Health & Disability Advocates

Moving Forward: Current Waivers for Coordinated Care Projects in Illinois

“Care Coordination,” along with related terms like “managed care” and “medical home” have become the buzz words of health care reform. The terms refer to new types of health care delivery models that many states and programs are turning to as the key to reforming the costly and arguably inefficient health care system.  Currently, the health care system mostly operates as a “fee-for-service” model, which critics argue incentivizes overutilization of medical services and shifts the focus away from effective preventative care, leading to excessive costs. Organizing groups of health care providers around patients, with a greater level of communication between doctors and a greater focus on care that keeps patients from getting ill could streamline health care delivery in a way that lowers costs and improving quality of care (for a more in-depth look at coordinated and managed care, go here or here).

In recent years, federal health programs, like CMS, have started to investigate the potential of care coordination via demonstration projects, grants and waivers for states or health care providers willing to participate. The Affordable Care Act also encourages exploration of these new care delivery models. In 2011, Illinois passed Public Act 096-1501, also known as Medicaid Reform, and began the Illinois Innovations project. As a part of that reform, the state is currently utilizing these waivers and grants:

The Integrated Care Program (ICP) is a 5-year pilot program that transfers all Medicaid (but not Medicare) eligible adults in Suburban Cook County to a Managed Care organization (MCOs). The 40,000 people included in the program, have two MCOs to choose from, one Aetna Better Health and IlliniCare Health Plan, Inc. The program is currently in Phase I, which focused on medical care. Phase II will focus on long-term care (set to begin September 2012), excluding long term care for those with developmental disabilities, which will be the focus of Phase III (no current implementation date).

Coordinated Care Entities (CCE) is a project intended to help Illinois enroll 50% of Medicaid clients into coordinated care projects (as called for by Public Act 096-1501). The CCEs are looking to cover at least 500 enrollees in a Health Home, FFS, Shared Savings or Bundled Payment model of care delivery. Illinois decided to release a request for proposals to medical care providers, in order to test the interest and capacity of community health organizations to offer coordinated care to patients, instead of simply enrolling Medicaid clients into Health Maintenance Organizations (HMOs). In January, Illinois released requests for proposals for Health Homes for chronically ill adults. Awards are expected to be announced by May 2012. HFS plans to release requests for proposals for CCEs to target children with complex medical needs by June 2012.

The proposed Cook County 1115 Waiver, currently pending with CMS, seeks to cover up to 200,000 uninsured patients who will become eligible for Medicaid once Affordable Care Act Medicaid Expansion takes place in 2014.

The Dual Eligibles program targets those who are eligible for both Medicaid and Medicare. The program would integrate the care that dual eligibles receive into one Managed Care Program. The proposal was open to a 30-day public comment period that closed in late March, and will be sent to CMS for approval.

Under the We Choose Health Community Transformations grant, the Center for Disease control has given the Illinois Department of Public Health $4,781,121 to serve the state of Illinois, excluding large counties. Work will focus on expanding efforts in tobacco-free living, active living and healthy eating, quality clinical and other preventive services, social and emotional wellness, and healthy and safe physical environments. This grant will dovetail with Illinois’ State Health Improvement Plan (SHIP), a prevention-focused, comprehensive approach to improving the health of Illinois residents.

The State has proposed changes and possible mergers of the Home and Community Based Waiver programs including the DORS Home Services Program and the Community Care Program. The major proposal affecting the HCBS waivers is a proposed change from a Determination of Need (DON) threshold of 29 to 37 in order to obtain services. DORS has also proposed reducing the Service Cost Maximums in the HSP program to the levels in the CCP program.

What’s Next for Health Care Policy in Illinois?

The past two weeks were a non-stop affair for health care policy—the ACA saw its 2nd anniversary right before the Supreme court heard oral arguments for the historic case against the law, and here at IHM we premiered our data visualization tool. However, health care reform news has not stopped. Here’s a brief overview of what the next few months have in store for health care in Illinois:

Health Insurance Exchange: State legislators made little progress towards votes on the establishment of a competitive health care marketplace, though negotiations on HB 4141 are underway. Legislators still have time to establish an exchange, but the Federal deadlines are looming closer, and to miss deadlines could cause Illinois to lose out on important Federal grant money. If the group waits to move forward with the exchange until the Supreme Court announces its decision on the ACA case -- a prospect that interests some legislators -- , there may not be enough time to set up a functioning exchange. Governor Quinn has said that he would establish the exchange via an executive order if necessary.

Potential Cuts to Medicaid: The Illinois Medicaid program faces a $2.7 billion deficit in the coming fiscal year. In order to deal with that budget, the Department of Healthcare and Family Services has proposed a list of possible cuts to Medicaid services in order to balance the budget. As legislators go into the upcoming spring sessions, many advocates are calling for other methods of fixing the Medicaid budget deficit that do not compromise important health care services that the program provides.

The Illinois General Assembly starts its April sessions on the 17th.. Follow the progress of these health policy issues with IHM!