Illinois Issues: Has The Managed Care Option Helped Medicaid Patients?

Yvonne Hardcastle was at her wit’s end. Her son, Alfredo Mejia, was 7 years old. He was angry all the time and had been diagnosed with behavior problems and ADHD, but that didn’t feel right. She didn’t know what was wrong, but her mother’s intuition kept pushing her to find help for her boy.

She finally took him to Ann & Robert H. Lurie Children’s Hospital of Chicago. Doctors diagnosed Alfredo with hearing loss and enrolled him in a hospital pilot program serving about 2,000 children with complex medical issues, who were insured by Medicaid. It was called a coordinated care entity and as the title implies, offered services to coordinate care for children like Alfredo. “They picked us up at a very vulnerable time,” Hardcastle, a Chicago resident, says. “I was clueless. I had no idea what was happening, what hearing loss was and the consequences. I was an emotional wreck.”

What followed were about three years of regular appointments working with audiologists, speech pathologists, psychiatrists and therapists. A care coordinator set up appointments and streamlined approval of services. If Alfredo’s hearing aids needed repair, the coordinator took care of that too. Alfredo’s care is an example of what managed care looks like when done well.

Photo Credit: Yvonne Hardcastle

Since 2011 when state law mandated managed care, more than 60 percent of Illinois’ roughly 3 million Medicaid patients have been shifted into outsourced managed care plans. In dollars, managed care spending has gone from about $247 million or 2.4 percent of the Medicaid budget in fiscal 2011 to $6.3 billion totaling about 51 percent of the budget in five years. Patients choose a privately run plan that offers a network of doctors and hospitals that then coordinate their care for a fixed fee. The idea is to improve health through preventative care like regular doctor visits and then ultimately to save money by reducing emergency room visits and keeping serious, costly health issues at bay.

The concept of managed care is popular with Illinois patients and providers alike, but the transition hasn’t been without some difficulties. The big shift into managed care began at about the same time as more Illinois patients joined Medicaid under the Affordable Care Act in 2013. “In general, we feel like the managed care plans have been very, very good for Medicaid consumers,” says Claudia Lennhoff, executive director of Champaign County Health Care Consumers.

Photo Credit: Jasleen Kaur/Flickr

Her praise is in spite of the rocky rollout of managed care plans in her area. Common problems given by health care providers and reported by patient advocacy groups mostly involve administrative issues and poor communication. “It can be very complicated,” says Alicia Siani, a manager for EverThrive Illinois, an organization that works to improve the health of women, children and families in the state. “(Managed care) is a cultural shift in how Medicaid enrollees are using health care and how providers are interacting with their patients.”

Under traditional Medicaid, patients apply for benefits and go to any health care provider that accepts Medicaid. The state handles payments and authorizations of doctors and health care. In contrast, MCOs work like private managed health care plans, and, in fact, some are by companies that also sell traditional employer health insurance. Twelve MCOs operate in five regions of Illinois including Rockford, central Illinois, Metro East, Quad Cities and the greater Chicago area. Patients have a choice between at least two MCO plans depending on the region. Chicago is the largest with 12 MCOs. As with employer health insurance, a patient’s doctors might not all be in the same MCO plans, forcing them to choose between, say, a favorite general practitioner and a preferred cardiologist.

Coverage, though, is greater than with traditional Medicaid. Managed care patients have some preventative dental care, fewer copays for prescriptions and transportation assistance to appointments. The biggest benefit is no authorization required for more than four prescriptions. MCO plans differ in what other services are offered, but they might include providing care coordinators to book appointments, attending doctor visits with patients, filling and delivering prescriptions, providing meals after hospital stays and paying for popular weight loss plans. Some set individual goals with patients and work to make them part of reaching milestones. That might include incentives like gift cards for taking medications and refilling prescriptions.

Photo Credit: Charles Williams/Flickr

The Champaign area has had perhaps the most issues transitioning to managed care, highlighting administrative issues faced to a lesser degree in other parts of the state. One of two MCOs left the market there at the end of 2016, reverting managed care patients back to traditional Medicaid. Many have mistakenly thought they have no coverage at all and are missing the extra benefits of managed care, Lennhoff says. “People really need security when it comes to their health care and health coverage, especially low income individuals,” she says. The state is working on the issue. “Discussions to ensure necessary managed care options in the region are continuing,” says John Hoffman, director of communications for the Illinois Department of Healthcare and Family Services. This is the second round of trouble for the Champaign area. Many patients had to travel an hour or more for their health care after managed care plans became available in 2015. One of the MCOs did not have enough local doctors in the network, creating a burden for the cash-strapped patients. “For a lot of people, that created a crisis,” Lennhoff says.

Overall, it is not uncommon for physician and medication lists put out by MCOs to be inaccurate, health care advocates say. “If we are going to ask people to make difficult decisions, we need to provide them with the most up-to-date, reliable, really actionable information we can,” Sinai says. It can be trouble for doctors, as well, when they refer patients to specialists or prescribe medication. Other administrative issues have come to light through a 2016 survey of about 900 healthcare professionals throughout Illinois who participate in MCOs. For instance, the different paperwork required to participate in all of the MCOs sucks time from their businesses, as does keeping track of the different requirements of each plan, especially since many MCOs have conflicting policies and reimbursement practices. “Some difficulties may be because of transitional changes that in time may shake out and not be so bad,” says Thomas Anderson, president of the Illinois State Medical Society. Doctors also are having to keep track of what medications are included in various plans’ formularies, information that changes throughout the year.  

Some say those issues are common to all managed care plans and are nothing more than a learning curve for providers and patients. But with low payment rates for Medicaid patients, the cost of administering the MCO plans can become a burden. “The concept of what they are trying to do has value, but the implementation is what is causing difficulty for patients,” Anderson says. A new state law signed by Gov. Bruce Rauner in August aims to address some of those issues. It calls for accurate, comprehensive provider directories and prescription formularies; toll-free numbers and email addresses for information about coverage for providers and patients; and a quality comparison tool that is consumer friendly so that patients can compare the performance of plans. MCO plans and health care providers are also working on ways to streamline the credentialing of doctors.

But health care advocates worry about the lack of a state budget. How will the state pay for the implementation of those plans and stay on top of Medicaid payments? Health care providers and MCOs are floating money owed by the state, says Stephanie Altman, director of healthcare justice for the Chicago-based Sargent Shriver National Center on Poverty Law. “If the state doesn’t pay the plans, we’re in trouble,” she said. Lurie Children's is owed $86 million in traditional Medicaid payments and $40 million in Medicaid managed care payments. Medicaid patients make up about half of the hospital’s business. “We provide more pediatric Medicaid care than any other hospital in the state,” says Susan Hayes Gordon, senior vice president and chief external affairs officer for Lurie Children's. “We’re really exposed.”

The Illinois Health and Hospital Association (IHA), which represents about 250 hospitals and health systems, reports hearing that claims are rejected more often from the MCOs than private plans and traditional Medicaid and that payments can be late. Despite problems with the implementation of managed care, providers support it, says Patrick Gallagher, a vice president of IHA. “Our members really want to make it work,” he says. “All this is new to Illinois. I’m optimistic that we’ll get there.”

Success stories from MCOs and other managed care programs show how their services can improve the quality of life for patients and save money at the same time. Data collected during the Lurie Children’s pilot program showed the kids they served used more therapy and checkup visits, but spent 50 percent less days in the hospital, 22 percent less time in the emergency room and that the overall cost of care was reduced by 18 percent. “We take that as success of the program and a measure of overall better health,” says Monica Heenan, senior vice president and chief strategy officer at Lurie Children's.

Children are especially at risk under managed care plans, which don’t have money built in for extra interventions for all children with complex needs. Since the pilot program ended, Lurie Children's has only been engaged by MCOs to provide care for about 500 of the most at-risk kids like those with spina bifida or cystic fibrosis. Many children like Alfredo have seen their services diminish. Alfredo received a cochlear implant in April, but has not had access to speech therapy at Lurie Children's. Visits have dwindled from several times a week to once every three months. His mom says he struggles to identify and process all the sounds he can now hear. “I guess it is up to him to figure it out now,” she says. Extra care would require special authorizations, which are difficult for families to navigate. “Their access to care needs to be easier, not harder,” Hayes Gordon says. Early intervention and access to care leads to healthier adults. 

Photo Credit: Yvonne Hardcastle

Managed care plans have found success by providing individualized care to patients. Stories are so inspiring that Aetna Better Health shares one each Friday with employees. In one case, a man told his care manager that he was having horrible headaches. The manager stopped by his apartment, noticed the smell of natural gas, and discovered the headaches would go away when the man left home. The gas company was called and a trip to the hospital for an expensive brain scan avoided. In another case, a member made 126 emergency room visits in one year. Homeless and addicted to drugs, the man received counseling and some social services. The care is ongoing, but emergency room visits dropped to 30 the next year. “Most of the stories are not about a stent or knee replacement. It’s about the whole human,” says Lawrence Kissner, Aetna’s CEO.

Harmony Health Plan has connected patients with services to help them get their GED, to find housing and to improve nutrition with the help of food pantries. “With this population of members who at times are vulnerable, we recognize that it is important to wrap our arms around them,” says Robin Jones, medical director at Harmony. “If you don’t have housing, it’s difficult to think about medication and doctor appointments.”

At the Cook County Health and Hospitals System, nurses and social workers meet with high-risk patients facing complex, serious health issues who also may have disabilities, mental illness or live in extreme poverty. Trust is built through face-to-face meetings. One patient bounced in and out of the hospital until a CCHHS caregiver realized the man needed extra help at home. His sister was unable to care for him by herself. Since then, the man has been able to stay home and hospital staffers check in with weekly phone calls. “We do a tremendous service,” says Mary Sajdak, senior director of integrated care. “The financial side is important, but we keep these people in a better place and tied to their environment rather than institutionalizing them.”

MCOs say they see savings in managed care from more patients using outpatient care rather than inpatient services and in increased prescription use. Those should translate into savings for the state in the long-run. “Managed care is heading in the right direction,” Kissner says. “It has been bumpy initially, but I think all the directional compass headings are going the right way.