By Jamey Dunn
If legislators want Medicaid reform, they are going to have to fight for it, says Julie Hamos, director of Illinois' Department of Healthcare and Family Services.
Hamos targeted a number of areas for potential savings during a Senate committee today, but she said she needs backing and, sometimes even pressure, from the General Assembly to spur negations with providers.
“It’s times like this, when we really have a budget crisis, that we should pushing the envelope and trying to see what we can really achieve in all of the budget items,” she said at the Chicago hearing.
Hamos hopes to save the state money on prescriptions. “We do believe that we should be making some adjustments in the pharmacy rates. It’s a very big part of our Medicaid budget and a place that we need to go to when we are talking about the kind of pressures we have right now to make budget reductions.”
Hamos said the state is paying too much for dispensing fees. Illinois pays $4.60 per Medicaid prescription for generic drugs and $3.40 for brand-name drugs. That compares to $1.36 for generics and $1.28 for brand-name drugs under the state’s employee health care plan.
However, David Vite, president of the Illinois Retail Merchants Association (IRMA), said there is little room to cut back on Medicaid prescription costs. “Pharmacy in the Medicaid program is about as low as it can go. We are in the mainstream of all 50 states in all Medicaid programs, and Medicaid pays less than the average prescription price.”
He said that Medicaid patients do not pay the co-payment on nearly half of the prescriptions that pharmacies fill. Hamos said she wants pharmacies to work harder to recoup those co-payments, but she conceded that she was not sure what steps they should take to collect the cash. “We have very small co-pays, but the co-pays we have are there for a purpose. I think that collecting them is a part of getting people to be more invested in their health care.”
She added that her agency is negotiating with IRMA and the Illinois Pharmacy Association, and she hopes to reach a deal by early January.
John Stephen—a partner with the Boston-based consulting firm The Lucas Group, who served on Gov. Pat Quinn’s taxpayer action board—said Illinois needs to be bold and take a long view on Medicaid changes, or legislators will “back every year looking at the same things.”
Stephen, who served as New Hampshire's Commissioner of Health and Human Services and testified on Medicaid reform in front of the Illinois Senate Deficit Reduction Committee last year, said: “I feel like I’m saying the same things I said to that committee.”
He said Illinois should target two areas—moving clients our of institutional settings when possible and utilizing more managed care programs.
“[In New Hampshire] we’ve saved all kinds of money with home- and community-based services. And we’ve done it the right way. But it takes a lot of effort.”
Illinois is building a managed care pilot program to treat elderly and disabled patients in some Chicago suburban counties.
However, Hamos voiced frustration over resistance to the program from legislators, stakeholders and even medical providers. “The same hospitals that we are investing in and putting a lot of Medicaid dollars into are not signing up to be part of our network. That’s a problem. So we are seeing push back as we develop managed care in Illinois. And we want you to recognize as you want us probably to expand that—something that we’re definitely interested in doing…the provider community, the stakeholders and the policymakers all need to be on our team as we move forward.”
Hamos said she also hopes to change the ways in which providers are paid, such as compensating based on results and trying to get the state better rates by bundling services. She also called for backing from the legislature on this issue.
“This whole question of payment reform is very much a theme of national health care. And we would like to really be very creative about how we roll that out. Again the providers are not necessarily going to like that. We want you to back us up in doing that. It’s going to be a challenge. Change is hard.”