State’s Decision to Drop Health Alliance HMO Sparks Protest

Urbana-based Health Alliance says it will file a protest with the state over its decision not to continue their HMO contract for state employees and retirees.

The state Department of Healthcare and Family Services announced Wednesday it was awarding HMO contracts for the next fiscal year to Blue Cross Blue Shield, with Open Access Plan contracts to PersonalCare and HealthLink. The state said the new contracts would save taxpayers over $100 million a year, and over one billion dollars over the next ten years.

Health Alliance CEO Jeff Ingrum argues the savings aren't really there --- in part because people who had been under Health Alliance will be required to either change doctors, or go to the more expensive Open Access Plans selected by the state, or to the Quality Care Preferred Provider plan, which offers less coverage.

"One, it will increase the costs to state workers," Ingram said. "But it will also increase the costs to the state of Illinois, because those programs are anywhere from 10 to 20 percent higher than the Health Alliance HMO program."

Ingrum says Carle, Springfield Clinic and McDonough District Hospital in Macomb had signed exclusive agreements with Health Alliance that barred them from working with other state HMO plans.

In a statement, Carle says it's studying the implications of the DHFS decision. The company calls on their patients who are Health Alliance members to "share their concerns with the state and with elected officials."

The company says it will be reviewing options "for state employees to continue accessing Carle physicians and hospital services", but that the plans and costs for such access will change if the state's decision stands.

And the state Department of Healthcare and Family Services says --- in a fact sheet on its managed care announcement --- that while Carle and other hospitals and clinics may not be available through their new HMO plans immediately, it expects them to "adjust to market needs" over time.

Carle says that Carle Foundation Hospital has a long-standing contract with Blue Cross/Blue Shield, for hospital services. But Health Alliance's Ingram says the contract is for a Preferred Provider plan, not the HMO plans which the state approved its employees and retirees in FY 2012.

State Representative Naomi Jakobsson (D-Urbana) has complained about the state's decision not to use Health Alliance next year. She says the company was not given sufficient advance notice of the decision. Jakobsson is inviting people concerned about the change to sign a petition on her legislative website.

NOTE: This story was updated to show additional comments from the Illinois Department of Healthcare and Family Services.