Illinois is funneling more people into the Medicaid managed-care plan with the highest turnover and lowest scores on state quality measures.

The Illinois Department of Healthcare & Family Services sends 35 percent of new Medicaid enrollees who didn’t request a particular plan to NextLevel Health. That ties CountyCare for the highest percentage assigned to any of the state’s Medicaid managed-care providers.

NextLevel gets all those new customers despite poor quality grades and high rates of defection among its current members. The plan finished last in the state’s latest quality survey, which rated NextLevel “low” or “lowest” in five of six performance metrics. Meanwhile, NextLevel lost customers at twice the rate that patients left the program overall.

NextLevel is run by Dr. Cheryl Whitaker, a longtime healthcare executive whose husband, Dr. Eric Whitaker, is known for his friendship with former President Barack Obama. With 51,000 members and 2 percent of the market, it’s one of six private health insurers awarded state contracts to administer Medicaid benefits under a managed-care program intended to improve care and save money. It’s one of two plans available only in Cook County.

Both Whitakers declined interview requests. HFS Director Theresa Eagleson says assigning large numbers of enrollees to NextLevel advances the administration’s goal of supporting minority-owned businesses that “reflect the diversity of our Medicaid membership,” adding, “We were trying to, because they got a late start, help make sure they had the ability to be successful.”

Medicaid beneficiaries in Illinois have 30 days to choose a plan. Those who don’t—about half—are automatically assigned to an insurer by the state using an algorithm that considers where enrollees live, if their primary care doctor is in network, whether family members are already assigned to a plan, and how much the state pays each plan to cover patients. Illinois’ auto-assignment algorithm doesn’t take insurers’ quality ratings into account.

Auto-assignments offer health plans a significant financial advantage, says Sara Rosenbaum, a health policy expert at George Washington University.

“Auto-assignment is very powerful. . . .It’s a huge cash infusion,” Rosenbaum says. “Especially because auto-assigned people tend to use less care.” A state might choose to send more enrollees to a newer plan that needs help getting off the ground, she adds, especially if that plan is serving a geographic area that doesn’t have enough capacity.

Eagleson’s agency revamped the auto-assignment algorithm in July, boosting NextLevel’s share of auto-assigned members to 35 percent from 22.5 percent in April and 12 percent before that. As NextLevel’s auto-assignments were increasing, only 3.3 percent of its new enrollees in July had specifically requested the plan. By comparison, 43.6 percent of July enrollees at CountyCare, the other provider confined to Cook County, requested that plan. CountyCare is run by public hospital network Cook County Health.

Despite the boost in auto-assignments, NextLevel’s enrollment is down 11 percent from a year ago, while overall enrollment in Medicaid managed care is down just 4 percent.

Members sometimes leave a health plan if they’re unable to find a doctor in the insurer’s network, which means NextLevel’s turnover may be a function of the size of its network of primary care doctors. Eagleson says Medicaid application and renewal process delays could also be to blame, noting the state is hiring hundreds of front-line workers to address such issues.

While states need to consider which plans have the capacity to take on new members, they should also be factoring quality, access to care and consumer satisfaction into auto-assignment algorithms, Rosenbaum says. Quality measures are emphasized by “a fair number of states because everybody understands this is worth a lot of money” to insurers.

Eagleson says she plans to add quality metrics to the HFS algorithm within the next year. She points out that assessing quality at smaller plans like NextLevel can be difficult because there isn’t always enough data to ensure statistical significance.

Since 2018, NextLevel has paid $600,000 in fines, penalties and sanctions for failing to submit complete and comprehensive records of healthcare services covered by the plan. No other current Illinois Medicaid managed-care plan incurred more fines during that period, except a much larger Blue Cross & Blue Shield of Illinois plan that serves customers throughout the state.

NextLevel, like the state’s other Medicaid managed-care plans, is accredited by the National Committee for Quality Assurance, a nonprofit organization that rates health plans based on consumer satisfaction and clinical quality. According to NCQA, NextLevel hasn’t reported enough data to receive an overall rating, but it has a mix of two and three stars out of four in a handful of accreditation categories.

The state’s latest health plan report card, from 2017, ranks NextLevel—the newest and smallest plan—last among its peers. Officials expect to release a performance ranking for 2018 soon.

“The 2018 data will show significant improvements,” Cheryl Whitaker says in an emailed statement provided by a spokeswoman.

Medicaid managed care covers roughly 2 million people and cost Illinois about $10.7 billion during fiscal year 2018. Private insurers in 2017 vied for state contracts in a competitive bidding process. Rejected initially, NextLevel appealed and won a four-year contract.

“Somebody who really understands the community where they’re serving members, that’s something we’re pushing all the plans to get better at,” says Eagleson, who joined the department after contracts were awarded. “I’m grateful that there are plans like NextLevel and CountyCare at the table.”

The Whitakers were fixtures on Chicago’s healthcare scene long before NextLevel launched in 2014. Cheryl Whitaker, NextLevel’s chair and CEO, was director of a state agency that facilitated adoption of electronic medical records. Eric Whitaker, who told Crain’s in August that he left NextLevel about five years ago, is a former University of Chicago Medical Center executive and Illinois Department of Public Health director.

In a separate emailed statement, Cheryl Whitaker says NextLevel works to “address those social determinants that affect the health and life expectancy of residents across Cook County, and we do that with an innovative community-based approach to healthcare,” adding the plan has “achieved (NCQA) accreditation for attention to quality practices and excellent service.”

As Cheryl Whitaker focuses on NextLevel, Eric Whitaker is teaming up with the American Medical Association’s innovation arm to launch Zing Health, a Medicare Advantage plan for Cook County residents. Medicare Advantage, in which private companies contract with the government to offer Medicare beneficiaries additional benefits, has been a lucrative business for insurance companies as the population ages.

Eric Whitaker in February joined Los Angeles-based Pipeline Health in the purchase of three Chicago-area hospitals—West Suburban Medical Center in Oak Park, Weiss Memorial Hospital in Uptown and Westlake Hospital in Melrose Park. The group sparked outrage when it moved to close Westlake just two weeks after buying it.

Eric Whitaker has said he hoped the $70 million deal would lead to a network of safety-net and community hospitals, many of which are struggling financially, and serve large numbers of Medicaid patients.

“Medicaid mystery: State sends lots of people to lowest-rated managed care plan” was originally published in Crain’s Chicago Business.

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Illinois sends people to lowest-rated Medicaid managed-care plan – ModernHealthcare.com