Hospitals in central Illinois are rejecting managed Medicaid plans at such a troubling rate that lawmakers are calling it a “crisis.”
Decatur Memorial Hospital, Memorial Health System and Hospital Sisters Health System have all announced plans to cut ties with Molina Healthcare of Illinois over the last few months. The decision puts tens of thousands of patients in central Illinois in a tough position as the region's other managed care plan, Health Alliance, exited the market last year.
The situation is so dire that Illinois lawmakers gathered on Feb. 8 to discuss the matter at a hearing titled "Medicaid Managed Care Network Adequacy Crisis in the Central Illinois Region."
Managed care is still relatively new in the state. A state law passed in 2011 required 50 % of the state's Medicaid population, which was around 3 million people, to be enrolled in a managed care plan by the start of 2015.
It's been harder to get hospitals in the central part of the state to join and stay in managed care plans as they are in a less competitive market that is home to many people insured through their employers.
“Central Illinois is the last bastion of fee-for-service in the state,” said Barbara Otto, CEO of Health and Disability Advocates, a group that represents populations with complex medical needs that mostly depend on Medicaid.
She notes that in more urban areas, the competition is so stiff that hospitals risk losing out on patients if they don't join a managed care network.
After long dealing only with fee-for-service, hospitals like those owned by Hospital Sisters Health System, have found it difficult to work with managed care plans like Molina.
“The termination notice was due to ongoing and unresolved issues around medical management, claim payments and credentialing of physicians,” said Brian Reardon, a spokesman for the hospital chain.
Memorial Health System will no longer accept Molina insurance "due to ongoing and unresolved administrative issues," added Michael Leathers, a spokesman for the system.
A request for comment from Decatur Memorial Hospital was not returned, but sources familiar with the matter say it cited similar reasons for cutting ties with the plan.
A spokeswoman for Molina says the providers ended their agreements “without cause,” adding “we worked with them in good faith in an attempt to come to an agreement, but unfortunately could not reach a resolution.”
Estimates of managed Medicaid individuals affected are estimated to be in the tens of thousands. Exact figures were unavailable. Total Medicaid enrollment for the counties in question is over 80,000.
Providers and Illinois Medicaid officials are now working to transition patients back into fee-for service Medicaid and remain in these hospital networks.
“My focus is ensuring that my patients continue to have access to services,” said Dr. Harald Lausen, a family physician at Springfield's Southern Illinois University School of Medicine, which partners with all the hospitals that have cut ties with Molina.
A spokesman for the state' health department confirmed that it was working both with plans and providers to ensure care continuity.
Going back to fee-for-service could mean patients lose care coordination, transportation services and enhanced dental benefits, said Stephanie Altman, director of healthcare justice for the Chicago-based Sargent Shriver National Center on Poverty Law.
Providers and others that shunned managed care could be drawn by a new law meant to improve administration of managed care plans, said Danny Chun, a spokesman for the Illinois Hospital Association.
The Medicaid Managed Care Performance Transparency bill, which was strongly supported by the association, requires the state's Medicaid agency to create performance metrics that rate how well a plan performs.
The legislation provided no timeline for full implementation of the law.