Wednesday, January 05, 2011

Senate approves Medicaid reform package

By Lauren Johnson with Jamey Dunn contributing

The Illinois Senate today passed a major reform package to the Medicaid system, which provides health care to low-income individuals in Illinois.

House Bill 5420 would require Medicaid patients to provide proof of Illinois state residency and a month’s income as part of a stepped-up verification system that would be implemented by Department of Health and Family Services.

At present, individuals who initially meet eligibility requirements are presumed eligible each year regardless of verification.

House Bill 5420 would also lower the eligibility ceiling for the AllKids program to at or below 300 percent of the federal poverty level, or an income of $66,000 for a household of four.

The legislation extends the program, which would’ have expired in July, to 2016. Julie Hamos, director of the Illinois Department of Health and Family Services, said capping the eligibility for AllKids was a difficult decision but a necessary one to keep the program viable.

“This will be more of a program for low-income and middle-income families,” Hamos said.

Under the measure, at least 50 percent of Medicaid enrollees must be part of a so-called coordinated care system, which is similar to managed care, by January 1, 2015. Much of the coordinated care — which focuses on preventative care and directing patients to a primary doctor for basic treatment — would be contracted to private companies.

“Now, we have 2.8 million people in the Medicaid program," said Sen. Heather Steans, a Chicago Democrat. "Out of that, there are 160,000 that are in managed care, so this is huge change, turning a very large ship in the state into some sort of reshaping kind of environment."

Also included in the package is a new way to combat Medicaid fraud by recovering state and federal payments for benefits received by ineligible individuals and charging them interest and penalties. Offenders would be subject to a civil penalty of $2,000 for Medicaid fraud.

Steans said the committee’s short timetable made it nearly impossible to address all areas of potential Medicaid reform in Illinois. “This is clearly a start,” she said.

Both Steans and Hamos characterized the changes as substantial and said they would take time and a coordinated effort among several state agencies to implement.

If the measure becomes law, the Department of Health and Family Services will come before the Senate Medicaid Reform Committee for an evaluation on the larger aspects of the bill, such as the shift to coordinated care, next spring.

Steans said the push for the measure has been a collaborative process, with bipartisan support from each chamber as well as Gov. Pat Quinn's office. Hamos said the bill could be up for a vote in the House as soon as tomorrow.

Internet sales tax

By Jamey Dunn

The Senate also approved a plan that would allow Illinois to collect sales tax on online purchases from companies that do not have a brick-and-mortar location in the state — one of the most well-known examples being

When Illinois residents buy goods on the Internet, they are supposed to pay the state a sales tax if the company does not charge them. But few are even aware they owe the state. Senate President John Cullerton characterized House Bill 3659 as an attempt to bring in the money by making the vendor collect it.

Opponents to the bill said they agreed with the idea but were concerned about the potential for lawsuits, uneven execution — which may not treat all business equally — and possible complications with potential plans to pass a national solution. “[The U.S.] Congress has got to be responsible and act on this,” said Sen. Dave Syverson, a Rockford Republican.

He added that large companies such as would find ways around collecting the tax, and that the legislation might hurt sales at smaller businesses.

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