Wednesday, December 08, 2010

House considers Medicaid reforms

By Jamey Dunn

In a move that parallels the Senate’s reform efforts, a House committee heard testimony in Chicago today on possible changes to Illinois’ Medicaid system.

A special Senate committee held a hearing on Medicaid last week. Both that hearing and today’s House hearing focused on cutting costs while giving patients more comprehensive treatment.

Much of the conversation was about potential savings that could be found in managed care programs. The state has a voluntary managed care program and is working on a mandatory managed care pilot program in the Chicago suburbs, which would provide care to elderly and disabled patients.

“Our approach towards managed care is one of using it as a means to an end, and the end that we’re trying to achieve is higher health status, better health care outcomes and the use of integrated care delivery systems to get us there,” said Michael Gelder, a health care policy adviser to Gov. Pat Quinn.

However, James Parker, deputy administrator of medical programs for the Illinois Department of Healthcare and Family Services, said the voluntary program is not producing big savings for the state. “Somebody enrolling in that program saves the state nothing. It actually costs us money.”

Chicago Democratic Rep. Barbara Flynn Currie suggested that requiring Medicaid patients to enroll in managed care might bring down costs. “If the provider doesn’t know what numbers that company is going to deal with, its very hard for them to figure what’s a rate that makes sense for them. … It maybe that you get a better rate bid from a provider if there is some mandatory enrollment because they have a better sense as to what the population is.”

Parker agreed. “We need a rate cut for that program to make sense. But if we did a mandatory program … and gave them enough [patients], it would make up for the rate cut that would be needed to save money.”

Parker added that because there are not many cases of people receiving unnecessary care, the best way to save money on Medicaid would be to try to keep patients healthier in general so they do not require as much treatment.

“Our rates don’t entice specialists to see our patients unless they really need to be seen. … We don’t have an overuse of expensive specialists, mainly because there’s no such thing as an expensive specialist in our Medicaid program because we don’t pay that much. … The only way to really get the costs down is to reduce the need for care.”

Parker said the state could also save by pushing for a reduction in the dispensing fees pharmacies charge for filling Medicaid prescriptions. Illinois currently pays $3.40 for each brand name prescription and $4.60 for each generic, in an attempt to encourage pharmacies to use generic drugs for Medicaid. That is compared with a $1.50 fee for any prescription for state employees.

He cautioned, that savings would not come in the form of cuts to a budget line. They are instead expressed in terms of savings compared with the estimates of what the state would spend in the future if no action were taken. “When anybody is talking about saving from any of these managed care programs, any one of them … whenever they talk about savings, they are never, never talking about spending less money this year than we spent last year or less money next year than we’re spending this year. It is all based on slowing the growth.”

The House committee is scheduled to meet again on December 13 and 14. Rep. Chapin Rose, a Mahomet Republican, said the committee would likely consider legislation on December 14. The Senate Medicaid Reform Committee is scheduled to make final recommendations to the full Senate on January 3.

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