The state of Illinois is nailing down key Medicaid policies ahead of a massive managed care rollout and accountable care experiment.
Illinois Governor Pat Quinn has signed into law what's being called a "landmark" Medicaid modernization plan, covering everything from nursing homes to managed care to the hospital assessments that maximize federal funding.
With half of Illinois' 3 million-plus Medicaid beneficiaries required to be enrolled in capitated managed care by 2015 under a 2012 law, the new law restores previously-cut adult dental and podiatry care, defines responsibilities for managed care organizations and accountable care entities, and transitions to a new hospital payment methodology.
"It's a modernization of an old system," said Julie Hamos, director of the Department of Healthcare and Family Services, in media release. "It gives much greater protections for our clients, streamlines hospital and nursing-home reimbursement and clarifies the relationships among managed care entities."
For insurers with MCOs in Illinois, including Aetna and Centene, and the new accountable care entities or ACEs, the new law sets up parity rules to allow each type of management organization an equal chance of participating in new regions.
The ACEs, which are still being developed, mostly by hospitals and health systems, must follow the same regulations and certifications as MCOs and will be measured with the same quality standards.
The law grants the Department of Health and Family Services the authority to increase capitation payments to MCOs equal to "the amount needed to avoid reduction in federally matched payments authorized by the federal government," as the agency described, referring to the hospital assessment program.
That program, in which hospitals pay fees to the state to garner maximum federal match dollars that are then redistributed, is being extended through 2018 and is expected to bring in $400 million annually for the state's Medicaid program.
When the 100 percent federal reimbursement rates for newly-eligible childless adults drops to 90 percent after 2017, the plan is to increase the hospital share of hospital assessment taxes proportionately to cover the state's liability, the agency said.
The new law also codifies a new Medicaid rate system for hospitals that's been in development -- the All Patient Refined Diagnosis Related Groups -- and sets aside $290 million help hospitals with the transition.
For Medicaid nursing home policies, the law requires MCOs to contract with all nursing homes and requires nursing homes to meet the MCO's quality standards. MCOs will be able to terminate nursing home contracts in the event the facilities fail to grant access to MCO care coordinators.