Illinois lawmakers pass bill to help Medicaid patients keep coverage, ensure hospitals get paid faster

May 31-- May 31--After years of criticism from patients and hospitals, Illinois lawmakers have passed a bill aimed at fixing a slew of problems within the state's Medicaid system.

Illinois residents on Medicaid -- a state and federally funded health insurance program that serves the poor and disabled -- have complained of trouble enrolling and staying in the program. The state has long had a backlog of applications, and many Medicaid members say they wrongly lost coverage when they had to renew it.

And last year, many of the state's hospitals began lamenting the system through which private insurers and organizations that administer Medicaid benefits were paying them. Hospitals said that those insurers -- part of the state's Medicaid managed care system -- were frequently denying their claims for payment and paying them late, forcing hospitals to redirect valuable dollars. The state's Medicaid managed care system, which is supposed to improve care, was expanded and revamped last year under former Gov. Bruce Rauner.

The bill that passed the Senate on Thursday night takes aim at those issues. It passed both houses unanimously and now heads to the governor for his signature.

About 2.9 million Illinois residents are on Medicaid, with about 2.1 million of those in Medicaid managed care.

The bill would require the state to review the process through which Medicaid members renew their coverage and simplify how Medicaid members can prove their incomes, to make sure they're still eligible.

It would also require Medicaid managed care organizations to expedite payments to certain types of hospitals; require the Department of Healthcare and Family Services to implement a dispute resolution process and be the final decision-maker when hospitals and the insurers disagree about payments; and allow the department to buy technology to better understand claims and disputed claims made to the managed care organizations.

"A lot of this has been people saying it's one person's fault or another group's fault, and this will give us a window into what's going on and help us target and solve problems faster," said Theresa Eagleson, director of the state Department of Healthcare and Family Services, who was appointed by Gov. J.B. Pritzker earlier this year.

The Illinois Health and Hospital Association said in a statement Friday that the bill "lays the foundation to begin addressing" hospitals' biggest concerns with payments from Medicaid managed care organizations.

The association said denials from Medicaid managed care organizations, along with late payments, put "extreme financial pressure on hospitals and jeopardizes access to care for all Medicaid beneficiaries."

The Illinois Association of Medicaid Health Plans also supports the measure, with executive director Samantha Olds Frey saying it will bring greater transparency to the system, helping to make sure "we are talking to one another as health plans and providers rather than at one another."

Improving the process by which Medicaid members can renew coverage will also help bring down denials, she said. Now, many claims are denied because Medicaid members get kicked off Medicaid during that renewal process, without them or doctors knowing it, she said.

"It's incredibly disruptive to their health care and their trust in the program and their trust in the system," Olds Frey said.

The bill, along with other actions being taken by the state, should help address that, said Grace Hou, secretary of the Illinois Department of Human Services, also appointed by Pritzker earlier this year.

The state has long had a backlog of applications for Medicaid and Medicaid renewals, called redeterminations. Those backlogs, however, have started to shrink. In May, the state had a backlog of 106,504 initial applications for Medicaid coverage that were taking more than 45 days, down from 141,479 in February. The state had a backlog of 164,501 renewal applications that were 60 days or more behind, as of March.

State agencies hope to eliminate the backlog entirely by June 2020, partly by simplifying the process, updating technology and hiring an additional 350 caseworkers and policy and technical experts.

"If the state is to really make a dent in this backlog, which we've already been able to see improvement over the last couple months, we have to continue to work closely together," Hou said.

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