By Kristen Schorsch
In a bid to rein in state spending, Illinois Gov. Bruce Rauner is rapidly implementing a controversial plan to further privatize a major Medicaid program. As Medicaid managed care spreads, it is important for reporters to understand how it works and where to get the information we need to do solid accountability reporting about it.
Under managed care, the state pays private insurers to administer benefits to Medicaid recipients, with a focus on prevention. The idea is to improve health while lowering medical costs. This can involve connecting people with primary care doctors and taking steps to steer them away from pricey emergency room visits. The desired result in Illinois: significant savings to a state on the heels of a lengthy budget crisis.
Although research is mixed about whether managed care saves money for states, programs have exploded nationwide because health plans typically are paid a fixed amount per enrollee, which helps states predict their costs for the year. This is especially key if legislators make another effort this year to scale back the federal funding for state Medicaid programs. Such efforts were part of the failed ACA repeal effort last year, but legislators may once again attempt to cap Medicaid in 2018 – with or without another big repeal push.
Rauner’s overhaul includes expanding managed care statewide while also reducing the number of participating insurers by requiring them to re-bid for contracts. In what’s believed to be the largest procurement effort in Illinois history, Rauner recently finalized contracts with insurers that will cost an estimated $60 billion over four years. The state believes this could save roughly $1 billion over that period, because insurers have agreed to accept lower reimbursement rates than in previous years. Some state legislators, who have called for more transparency around Rauner’s managed care revamp, continue to hold one public hearing after another.
This is an important story to follow in your state. Here are six things to pay attention to:
- Follow the money. Request contracts between the state and the insurers. What are the carriers required to provide for Medicaid recipients regarding medical services and access to providers? What are their reimbursement rates from the state? For example, will there be financial penalties if they do not improve the health of their high-risk enrollees?
- Monitor quality. What, if any benchmarks does the state set for insurers to meet, such as screening enrollees for cancer, giving vaccinations on time or curbing unnecessary trips to the ER? For national insurers in managed care programs in multiple states, compare their performances. Are they reaping huge profits while providing poor quality?
- Sift through the documents. Find out which reports managed care insurers in your state are required to file. I analyzed oversight reports that provided a monthly snapshot of how well insurers tracked their members. That fueled an investigation I led in July, which revealed that some insurers were doing a poor job of even finding and working with Medicaid recipients, making it difficult for people to get the medical treatment they needed and for the state to squeeze out savings. Keep in mind that the low-income or disabled populations that Medicaid covers can be difficult to track down. Many are homeless or lack a permanent address or phone number. They also may cycle in and out of Medicaid as their income fluctuates. Plus, some people just don’t want to be bothered. They are more concerned about finding their next meal and a place to sleep than booking a doctor’s appointment.
- What are the headaches? Illinois doctors and hospitals often complain about insurers not coordinating a patient’s treatment among a team of providers, including doctors, nurses and social workers. It’s a basic concept in managed care.
- Listen to the insurers, too. Are they getting enough guidance and direction from the Medicaid program, as well as accurate information on Medicaid beneficiaries as they transition to the insurers?
- Talk to lots of experts. Also, study managed care models in other states. Is your state crafting its managed care program after another states? What are the benefits and challenges of that? Arizona, for example, has decades of experience in managed care and has saved nearly $30 billion in the last five years alone. Insurers that participate are motivated to meet quality measures, because if they lose a contract another state could find out about it. On the other hand, Connecticut cut ties with insurers after seeing double-digit annual costs increases and brought its managed care in-house.
AHJC member Kristen Schorsch (@kschorsch) covers the power, money and influence of the health care industry for Crain’s Chicago Business. Schorch also has worked for the Chicago Tribune, the Daily Southtown and the Iowa City Press-Citizen.
