HJ0041 98TH GENERAL ASSEMBLY

HJ0041 LRB098 12193 KTG 46214 r

HOUSE JOINT RESOLUTION

WHEREAS, The General Assembly passed legislation and the Governor signed into law major reforms of Illinois' Medical Assistance Programs, including Senate Bill 2840, The Save Medicaid Access and Resources Together (SMART) Act (Public Act 97-0689) and House Bill 5429 (Public Act 96-1501) and these new laws intend to "address the significant spending and liability deficit in the medical assistance program budget of the Department of Healthcare and Family Services by implementing changes, improvements, and efficiencies"; and

WHEREAS, The reforms require the Illinois Department of Healthcare and Family Services to enroll at least 50% of recipients eligible for comprehensive medical benefits in a care coordination program by January 1, 2015; and

WHEREAS, Care coordination programs may be provider-sponsored programs that contract directly with the State or traditional managed care programs; they must operate integrated delivery systems where recipients will receive their care from providers who are responsible for providing or arranging the majority of care, including primary care physician services, referrals from primary care physicians, diagnostic and treatment services, behavioral health services, in-patient and outpatient hospital services, dental services, and rehabilitation and long-term care services; and

WHEREAS, The Department must designate or contract for integrated delivery systems that ensure enrollees have a choice of systems and of primary care providers within the systems; and

WHEREAS, Payment for coordinated care must be based on arrangements where the State pays for performance related to health care outcomes, the use of evidence-based practices, the use of primary care delivered through comprehensive medical homes, the use of electronic medical records, and the appropriate exchange of health information electronically made either on a capitated basis in which a fixed monthly premium per recipient is paid and full financial risk is assumed for the delivery of services, or through other risk-based payment arrangements; and

WHEREAS, Health care providers, including hospitals, physicians and nurses, federally qualified health centers (FQHCs), nursing homes, home health agencies, social service organizations, and pharmacies can assume responsibility for coordinating the care of Medicaid recipients under a direct arrangement with the State that requires the providers to assume increasing risk over a short period of time; and

WHEREAS, In order to achieve significant savings needed to cover administrative expenses and generate profits for shareholders, HMOs often prevent beneficiaries from getting the services they need; Medicaid HMOs in Illinois have previously placed barriers to care, and in some instances, either reduced rates to providers or made it very difficult for providers to get approvals to provide the care that people need; major policy reviews of various studies on Medicaid HMO managed care have found little savings from HMOs and that such an approach is unlikely to significantly lower costs; and

WHEREAS, HMOs in Illinois have a checkered track record in "managing" Medicaid patients; Illinois failed in its first major attempt to enroll a large number of children into a managed care program, the Healthy Moms/Kids program, which was scrapped in 1995 after having failed to meet performance standards and spending millions in failed computer systems; the State also scrapped the ambitious MediPlan Plus program; and

WHEREAS, Even more concern should be given to the 2004 federal court ruling in Memisovski v. Maram that HMOs provided less preventive and primary care and poorer quality care to children in the Medicaid program in Cook County than non-HMO, fee-for-service programs; and in 2008, an HMO in Illinois paid $225 million - the largest jury verdict in a false claims case in U.S. history - to settle charges that it deliberately excluded pregnant women and sick people from its program; and

WHEREAS, The 50% goal must be achieved by enrolling medical assistance enrollees from each medical assistance enrollment category, including parents, children, seniors, and people with disabilities only to the extent that current State Medicaid payment laws would not limit federal matching funds for the State; and

WHEREAS, Moving most or all recipients to full-capitation HMOs will contravene federal rules, cause the State to exceed the federal upper payment limit and thus jeopardize up to $1 billion in federal funding under the Hospital Assessment Program; and

WHEREAS, The Illinois Department of Healthcare and Family Services has selected only a limited number of provider-sponsored Care Coordination Entities while giving preference to health maintenance organizations; another solicitation of interest could ensure further expansion of care coordination beyond mandatory HMO enrollment; and

WHEREAS, The State should thoroughly evaluate its experience with HMOs before substantially increasing mandatory enrollment in these types of plans; hastily moving large portions of the Medicaid population into HMOs (i.e., 1.5 million to 2 million) is inherently risky; and

WHEREAS, Given that the Department is planning more aggressive use of HMOs, all policymakers should know that there is little evidence to date that the initiatives will contain program costs; Illinois needs to be far more cautious and conservative in estimates of the likely benefits of HMO Medicaid managed care; the State should work with providers to develop innovative partnerships that share risk, rather than abdicate responsibilities to HMOs, which often achieve savings by denying services or reducing payment; and

WHEREAS, Hastily moving large numbers of Medicaid recipients to full-capitation HMOs will jeopardize up to $1 billion in federal funding under the Hospital Assessment Program; care coordination must be carefully designed so that the State does not jeopardize the funding provided by the Hospital Assessment Program; therefore, be it

RESOLVED, BY THE HOUSE OF REPRESENTATIVES OF THE NINETY-EIGHTH GENERAL ASSEMBLY OF THE STATE OF ILLINOIS, THE SENATE CONCURRING HEREIN, that we urge the Department of Healthcare and Family Services to carefully evaluate and reconsider its actions to quickly move larger numbers of Medicaid beneficiaries into HMOs; and urge that the agency refocus its current preferences and give more favorable consideration to innovative, provider-based care coordination strategies; Accountable Care Entities should be utilized as important and valued alternatives to traditional HMOs; these models bring together a wide variety of entities such as hospitals, physician-led groups, Federally Qualified Health Centers, social service organizations, pharmacies, and behavioral health providers and closely resemble the Accountable Care Organizations (ACOs) that participate in the Medicare Shared Savings Program, under which these entities provide care coordination services to seniors and adults with disabilities who have the most complex physical health and behavioral health conditions by facilitating the delivery of appropriate health care and other services and managing needed transitions in care among providers and community agencies; and be it further

RESOLVED, That the General Assembly recommends that the Department of Healthcare and Family Services should more actively pursue provider-sponsored care coordination in the Medicaid program, including application for relevant federal grants and Medicaid waivers; and give provider-sponsored entities a more meaningful and substantive opportunity to succeed, because provider-sponsored care coordination, done at the local level, is best for patients.