Illinois the Latest State to Announce Milestone in Medicaid Managed Care

With the new year comes another report of state-level progress on bringing managed care to Medicaid, this time from Illinois.

The Chicago Tribune reported Sunday that the state has transferred 1.4 million of its Medicaid clients from being served by traditional fee-for-service plans into managed care. This comes close to the goal of transferring 1.5 million people into by January 1, 2015, which was called for in a 2011 law. At the time the law passed, that target represented half of Illinois’ Medicaid population, which has since grown to 3.1 million.

Almost all of the transfers have occurred in the past year, and nearly half just in the past 2 months, according to an Illinois Department of Healthcare and Family Services (HFS) website cited in the report. The early priority has been to enroll clients living in more urban areas, with those in rural areas to be enrolled later. A separate report states that Illinois anticipates having 2 million of the 3.1 million clients in managed care by mid-2015.

According to the HFS website, Illinois seeks to align Medicaid with the goals of the Affordable Care Act (ACA) and its mission of achieving the “triple aim” of better population health, better quality care, and a reduction in the growth of healthcare costs. While Illinois Gov Pat Quinn is leaving following his defeat in November, the lawmaker who sponsored the law told The Tribune it remains a priority of incoming Gov Bruce Rauner.

States around the country have had varied levels of success with transitioning their Medicaid populations to managed care in recent years, with some seeing success and others experiencing significant losses and departures by insurers who have contracted to run the plans. The most challenging transitions have occurred among the very frail and among rural clients, and in some cases transitions were delayed or put off indefinitely.

The State of New York recently delayed the schedule for transitioning long-term care patients in managed care. New Hampshire put on hold parts of its Medicaid managed care program. But a report released last month by PricewaterhouseCoopers said the march toward Medicaid managed care passed a “tipping point” in 2014, with most states that embraced Medicaid expansion sending those new enrollees straight into managed care plans, much as Illinois did, while seeking ways to transition existing clients as well.

One factor missing in Illinois’ transition, which appears to have troubled some states, was the expectation of achieving huge, instant savings to plug a budget gap. Instead, Illinois officials say they seek budget stability and long-term savings by preventing unnecessary trips to the emergency room. Illinois also experimented with managed care in 2011 in a pilot program before trying to move large numbers of clients into managed care.

This summer the state began moving families, children with special needs, and adults who became eligible for Medicaid through the program’s expansion under the ACA.

By contrast, the promises that accompanied Kansas Gov Sam Brownback’s KanCare program included $1.2 billion in savings over 5 years, but a report filed with CMS showed the main providers lost a collective $110 million in the first year.

Around the Web

Illinois Shifts 1.4 million to managed care

Managed care reaches “tipping point”

Nursing Home Transition to Managed Care Delayed

KanCare Companies Lost Money the First Year