Illinois Enacts Medicaid Reform Law


Governor Pat Quinn signed major Medicaid reform legislation (H.B. 5420) on January 25.  Illinois’ $15 billion per year Medicaid program serves 2.8 million recipients, of whom 1.8 million are enrolled in Illinois Health Connect (primary care case management) but only 200,000 are enrolled in comprehensive managed care plans.   The new law authorizes the Department of Healthcare and Family Services (HFS) to increase Medicaid and Children’s Health Insurance Program (CHIP) recipient enrollments in comprehensive managed care plans to at least 50 percent of recipients by January 1, 2015.  Managed care entities will be reimbursed using pay-for-performance, risk-based capitation methods creating incentives for plans to improve health care outcomes, disseminate evidence-based practices, encourage meaningful use of electronic health record data, and promote innovative service models.   The new law also includes state planning, reporting, and fund transfer authority to encourage long term care “rebalancing”, offering home and community based services to aged and disabled persons as a cost-effective alternative to institutional care.   Other provisions of the law pertain to developing a new Medicaid Management Information System (MMIS) incorporating Medicaid Information Technology Architecture (MITA) standards; new Eligibility, Verification, and Enrollment (EVE) systems that will be integrated with the MMIS and with health insurance benefits exchanges when these exchanges are implemented in 2014 under the federal health care reform law; automated eligibility income verification, residency verification, and identification of third party liabilities; civil monetary penalties enforceable through lien authority to deter fraudulent applications; recipient “lock-in” to designated providers in order to control program abuse; enhanced prescription drug utilization review; and potential use of co-payments where allowed by federal rules.    The new Medicaid reform law was produced by bipartisan Special Medicaid Reform Committees in the Illinois House and Senate, working with the Governor and with HFS, and is projected to save $624-$774 million over five years.   

About Tom Entrikin

A former policy specialist with the U.S. Health Care Financing Administration (now Centers for Medicare & Medicaid Services (CMS)), Tom Entrikin has vast experience providing technical assistance to states on Medicaid eligibility, coverage, and reimbursement; provider certification and enrollment; program integrity; recovery of third party liabilities; Medicaid Management Information System (MMIS) performance specifications and operations; interagency agreements; contracts with managed care organizations; and Medicaid waiver programs.

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