The Arc of Illinois

July 9, 2010

Leaders in The Arc:

Jim Parker, Deputy Administrator for Medical Programs at the Illinois Department of Healthcare and Family Services, HFS, hosted a meeting of advocates on Thursday to get feedback from advocates on the Managed Care Pilot. Both Faye Manaster the Director of our Family to Family Health Care & Education Center and I attended this meeting.

Jim gave us an update on the proposals submitted by five vendors to run the Managed Care Pilot. The five who have submitted proposals are:

1. Aetna
   
2. Harmony Health Plan of Illinois
   
3. Centene Corp. IlliniCare
   
4. Meridian
   
5. United Health Care of Illinois

The staff at HFS is now evaluating these proposals. Their target date for completing the evaluation and making a recommendation on two HMOs that will run the Managed Care Pilot is July 19^th. Jim and his staff are encouraged by the proposals reviewed so far. All of the companies are for-profit and have experience in delivering Medicaid services to the target population in the pilot, adults who are on Medicaid who are elderly or blind or disabled. There are about 60,000 to 40,000 individuals in this pilot including about 3,000 adults with developmental disabilities. Some of the bidding companies have experience in delivering long-term care, behavioral health and waiver services

There was a lot of discussion around pay for performance and what services should be awarded for increased rates and/or bonuses. Our recommendation was that major emphasis and reward should be directed at moving people out of nursing homes and state institutions. The importance of good dental care and preventative health care was also discussed. Also discussed was the importance of accessible health care equipment in doctors offices, clinics and hospitals.

Faye and I recommended the importance of the medical home model and outcomes that would reward reduced emergency room visits, weight care programs, preventative dental services, regular health screenings appropriate for peoples age and sex and patient satisfaction. We are in the process on making written recommendations so any further suggestions you might have will be welcome.

It sounded to me that HFS is also looking down the road at the second and third phase of the pilot. Although Jim Parker stated that it is likely that Phase 2 and 3 will most likely be amended to the contracts selected in the future. This concerns me. I am also concerned by the lack of detail available regarding what the direct benefits will be, for instance, we all agreed about the importance of preventative dental services and our Medicaid Plan does not cover dental services for adults! We all agree about the need for behavioral health services but our community behavioral system is being dismantled right now! I still do not trust and HMO in the delivery of quality health services and down the road waiver services to individuals with developmental disabilities.

Our next meeting will be in mid August.

Here is a story from the Washington Post critical of one of the Illinois bidders, Centene Corp IlliniCare.

Tony Paulauski

The Arc of Illinois

815-4664-1832

_______________________________________________

Health-care bill likely to increase Medicaid outsourcing; some doubt treatment quality

By Alec MacGillis

Thursday, July 8, 2010

-- The day after the House passed the landmark health-care bill in March, St. 

Louis-based insurer Centene saw its stock jump 11 percent. That was perhaps the first signal that the massive changes ahead would be a boon to one subset of the health-care industry: companies that manage Medicaid for the states.Now, businesses are rushing to get a foothold in states that outsource Medicaid, knowing the law could add 16 million people to the federal-state program for the poor and the disabled. In Texas, where Medicaid is expected to grow by 1.8 million people, Centene is scrambling to win additional contracts, having laid the groundwork by contributing $250,000 to state lawmakers' campaigns since 2008."We . . . believe we are extremely well-positioned to benefit in this new era," Centene chief executive Michael Neidorff told market analysts on a recent conference call.

But the experience in some states suggests pitfalls ahead. A 

recent report found that 2.7 million children on Medicaid in nine states, most of them states that outsource Medicaid, are not getting required screenings and immunizations. And in Milwaukee, the city's two biggest provider networks broke ties with Centene and the state is overhauling its Medicaid contracts for southeast Wisconsin, dropping Centene from the mix. The complaint was that 

Centene was creating profits at the expense of patient care, a charge the 

company denies."We came to the conclusion about a year ago that we were 

unsatisfied with the quality of care we were getting, given the amount of money 

we were paying," said Jason Helgerson, Wisconsin's Medicaid director.With an 

expanded Medicaid absorbing at least half of those newly covered under the 

health-care law, Medicaid HMOs will play an outsize role in managing costs. Some 

studies suggest that managed Medicaid has, in certain states, slowed the 

increase in costs without harming care, and even improved care for some 

conditions. The theory is that insurers can save states money by reducing 

avoidable treatments -- by monitoring diabetics to keep them from needing 

dialysis, for example.But managed Medicaid has also produced a steady stream of 

controversies. Last year, insurer WellCare agreed to pay $40 million in 

restitution to Florida after it admitted shortchanging children on Medicaid by 

setting up a subsidiary to make it look like WellCare was spending more on 

medical care than it really was.Today, 70 percent of the 48 million Medicaid 

enrollees are in a managed plan. States typically pay insurers a per-person rate 

and the insurers, or HMOs, negotiate rates with doctors and hospitals.Managed 

careMost economists agree that managed care is more efficient than paying 

doctors and hospitals separately for each treatment. But it can be hard to find 

the right balance in Medicaid -- enrollees are less likely to push back when 

needed treatments are withheld and states are conflicted in monitoring insurers 

they hired to keep costs down.Jane Perkins, legal director of the National 

Health Law Program, said the potential expansion of Medicaid HMOs under the new 

law "is not necessarily a bad thing." But, she added, "What gets bad is when 

they're taking their per-month, per-member payments and using it for profit, not 

patient care."While some states manage the program on their own, the majority -- 

among them Virginia, Maryland and the District -- contract out most of their 

Medicaid. And now insurers are vigorously lobbying state lawmakers for more 

outsourcing, using states' budget woes as a goad.In Florida, where 950,000 are 

expected to join Medicaid, insurers are pushing for the expansion of a 

managed-care pilot program despite mixed evidence about its early results. In 

Texas, they are pushing to expand managed care into the Rio Grande Valley, where 

there are 350,000 Medicaid enrollees even before the new law goes into 

effect.New insurers are moving into the market now dominated by giants such as 

Wellpoint and UnitedHealth and companies specializing in Medicaid, such as 

Centene, Molina and Amerigroup. Centene has swelled to $4 billion in revenue, 

cracking the Fortune 500 last year, with more than 1 million Medicaid enrollees 

in nine states. Neidorff, its CEO, earned $6 million last year.The company 

attributes its success to shrewd selection of markets and a sophisticated system 

for managing care. It holds up as an example the prenatal care it provides 

high-risk pregnant women, making sure they get a weekly steroid injection to 

reduce the rate of premature births."Years ago, the formula was to deny care, 

but that's not what managed care is about now," said Centene spokeswoman Toni 

Simonetti. "It's about trying to provide healthier outcomes. . . . Better health 

outcomes are the least costly outcome."The company has worked hard to encourage 

lawmakers to expand Medicaid, spending $1.53 million on lobbying in Washington 

since 2007. Most of the $1 million raised by its political action committee 

since 2004 has gone to state-level candidates. Its corporate board includes 

former House speakerRichard Gephardt, a Democrat who runs a Washington lobbying 

firm, and former U.S. health secretary Tommy Thompson, a Republican who 

pioneered Medicaid HMOs as Wisconsin governor and works for lobbying firm Akin 

Gump.For years, Centene enjoyed such steady profits in Wisconsin that in 2008, 

Neidorff compared it to turning on a "milking machine." But that year, Aurora 

Health Care, the state's biggest provider network, cut its contract with Centene 

after objecting strongly to its reimbursement rates. Milwaukee's other big 

provider network, Wheaton Franciscan, also cut ties with Centene.Simonetti 

described it as part of the "naturally occurring tensions" with providers. But 

Aurora President Nick Turkal pointed to a broader issue: Managed care in 

Wisconsin is falling far short of the ideal, with too little done to get 

enrollees the primary care they need and keep them out of the emergency 

room."The problem with this concept of managed care in Wisconsin is that it 

hasn't really been managed," he said.The state rebid the contract for southeast 

Wisconsin with stricter standards on diabetes management and other care. It 

selected four insurers that included UnitedHealth but left out Centene, which is 

appealing in court.One clinic's situationWhatever the outcome, the shift toward 

Medicaid managed care may have helped create at least one casualty, a small 

clinic on the Near North Side of Milwaukee. The Milwaukee Immediate Care Center 

prides itself on providing a level of enhanced primary care that clinic owner 

Perry Margoles says prevents countless emergency room visits -- offering free 

blood pressure screenings, taking the time with patients coming in with a single 

complaint to provide a more comprehensive assessment, with an EKG machine on 

hand if needed.But Centene long resisted paying the extra $25 fee the clinic 

charges for patients not assigned to its doctors. And after the clinic closed in 

2007 for flooding repairs, Centene refused to renew its contract. The clinic had 

better relations with UnitedHealth, but the insurer dropped its urgent-care 

contract in 2007 and has, Margoles said, been late in paying many 

claims.Simonetti declined to discuss the situation in detail, saying only that 

the clinic "did not meet our standards." A UnitedHealth spokesman did not 

respond to a request for comment.Business has fallen in half from three dozen 

patients a day. Margoles has shifted his three doctors to part time and cut 

weekly hours of operation from 125 to 55. One recent weekday, several people 

trickled in, including Latonya Fortson, a home health aide who is covered by 

Centene but still comes to the clinic even though it means paying cash -- in 

this case, $20 for a tuberculosis test."It's right here in the community," she 

said. "I like the service."With the clinic in tax arrears, Margoles said he is 

on the verge of closing. He worries about the "collapsing health infrastructure" 

in the community. And he worries what expansion of managed Medicaid will mean 

for other states where regulators are considered less capable than the ones that 

he has found lacking in Wisconsin."The Medicaid HMOs are maximizing their 

profits at the expense of an underfunded system," he said. "If they're pulling this [stuff] in Wisconsin, can you imagine what's going to happen in other states?"

http://www.washingtonpost.com/wp-dyn/content/article/2010/07/07/AR2010070703560.html