The Illinois House has unanimously passed a bipartisan reform package that aims to improve a number of health care programs in the state, including its often griped about Medicaid managed care program.
Under the program, the state pays private insurers a set amount per member per month rather than paying for each medical service provided. It aims to improve people’s health and control costs by ensuring all care is appropriate and high quality. But hospitals say it’s costing them money, as medical claims denied for administrative reasons cause significant reimbursement delays.
S.B. 1321 aims to improve aspects of the program that seem to be causing hospitals the most grief, including requiring insurers to pay complete claims within 30 days or face a penalty. The bill now moves to the Senate.
It also requires the Department of Healthcare & Family Services, the agency that oversees Medicaid, to maintain a provider complaint portal, through which doctors can submit unresolved disputes with insurers. Hospitals have long requested more oversight from the agency.
Hospitals—especially safety nets that treat large numbers of Medicaid patients—say their issues with Medicaid managed care have amplified since January 2018, when the program expanded from just 30 counties to all 102 in the state. Providers contend, however, that limiting the number of participating insurers to six has helped some.
The Illinois Association of Medicaid Health Plans, which represents the six Medicaid managed care insurers operating in the state, has been working closely with Healthcare & Family Services to develop standardized guides to help lower claim denial rates.
“When properly implemented, managed care offers Medicaid members enhanced health coordination and quality services at sustainable costs,” department spokesman John Hoffman said in a March email. “While we are seeing the promise of these goals beginning to be met, we also understand that the previous administration did not adequately develop some components of the program, which we are working to correct as promptly and effectively as possible.”
In the interest of transparency, Healthcare & Family Services would be required to calculate and publish each Medicaid managed care insurer’s medical loss ratio, the percentage of premium dollars used to pay claims and improve quality.
The bill also aims to improve the medical redetermination process, which reviews eligibility for the state’s nearly 3 million Medicaid beneficiaries.
Lapses in coverage are hard on patients, especially those managing chronic conditions, and health systems don’t get reimbursed for medical services when claims are denied by health plans.
Illinois Health & Hospital Association spokesman Danny Chun says the group commends legislators, as well as Healthcare & Family Services, for “listening to providers and their concerns, and crafting a managed care reform package that lays the foundation to address every high priority issue identified by our members.”