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HMPRG Testimony on Options in Medicaid and Systems Delivery Reforms in Illinois

Health & Medicine Policy Research Group (HMPRG)
November 20, 2010

Download HMPRG_Nov_16_2010_Testimony

State Options in Medicaid and System Delivery Reforms
Health & Medicine Policy Research Group
For State Public Hearing, Nov. 16, 2010


Health & Medicine Policy Research Group believes that the PPACA offers opportunities to build
a healthcare infrastructure that aligns health systems, including Medicaid, Medicare, the new
health insurance exchanges, and the employer-based insurance market. The State of Illinois
should proceed diligently in implementing provisions of Federal reform, especially around
Medicaid, to ensure the most seamless, effective, and affordable health system for all residents in
the state..


Medicaid reform in Illinois should employ the following principles. State policy leaders should
ensure that the new system is patient-centered, seamless, equitable and transparent. The health
system should provide coordinated care, optimal benefits, interdisciplinary provider teams,
opportunities for statewide research and evaluation, and overall system cost-savings. These
principles are supported by evidence revealing their effectiveness in improving the quality of
care and providing cost-savings.

  • The patient should be the focus of all reforms in IL and primary care in patient-centered medical homes is one model that can be used successfully to improve quality and reduce costs.
  • When there is flexibility, the State should implement options that create the most seamless and efficient system
  • The eligibility criteria for the new Medicaid expansion category differs from the traditional categories, but IL should create one common eligibility and enrollment form for Medicaid, the state health exchange, and other public programs to ensure a single point of entry into the system (while internally dealing with the complexities of having multiple standards for eligibility)
  • States have options in determining the Medicaid “benchmark benefits.” While these benefits must include “essential health services” as defined by HHS and meet other Medicaid benefits standards, States will be able to voluntarily provide additional services. Illinois should provide maximal benefits and implement costsavings reforms so that these benefits can be provided.
  • All reforms must consider the needs of all residents, especially the most vulnerable, so that an equitable health system can be established.
  • If possible, IL should include plans for undocumented immigrants when implementing reform (even though they are explicitly left out of Federal reform,  should include a plan for alternative avenues of coverage and care)
  •  IL needs to ensure the viability of safety net institutions that will continue to serve the remaining uninsured
  • IL should work to increase its Medicaid reimbursement rates to be more like Medicare rates (cost-saving reforms can be used to off-set this increased reimbursement)
  • IL must find innovative ways of attracting a diverse and culturally competent workforce
    • State could expand the scope of practice for non-physician primary care providers
    • State should be sure to apply for all Federal grants for workforce training programs, etc.
  • Illinois must remain transparent as it implements reform
  • Illinois should promote care coordination and the use of interdisciplinary provider teams in Medicaid and the State exchanges. Care coordination and provider teams reduce costs (by reducing duplication of services, for example) and improve care quality. Perhaps the state should participate in ACOs, and other delivery system and payment reform options under health reform.
  • IL should develop a state-wide research, evaluation, and innovation center to monitor IL’s progress and the outcomes of other Federal innovation and evaluation entities. Pooling academic and state resources to create a coordinated innovation, research, and evaluation agenda that is aligned with the Federal agenda in those areas will improve the effectiveness and efficiency of health reform implementation in Illinois and help the public and professionals monitor its progress.
  • The state must consider ways of sustaining Medicaid after the increase in Federal funding for the program declines. The state should consider innovative ways of financing the system, including in Long Term Care, as well as innovative delivery system reforms that can produce cost savings while maintaining and improving quality outcomes. The state should develop a Medicaid financial advisory committee to inform this transformation over time.

Beyond our recommended general principles above, we have the following specific recommendations:

IL should fully explore the Medicaid state option to create health homes for persons with
chronic health conditions (section 2703 of the Affordable Care Act). This state option
emphasizes health care service delivery that promotes care coordination, transitional care
services, referral to community and social support services, and care management. This service
delivery focus supports the long-term care shift from institutional to home and community based
service provision. Further, this state option is accompanied by a 90% increased FMAP for the
first 2 years of operation, further incentivizing the necessity of coordinating care. There are also
planning grants available to states beginning in 2011 for this Medicaid state plan option.

IL should fully explore the Demonstration Project on Integrated Care Around Hospitalization (section 2704) and subsequent application to participate in the demonstration.
This provision focuses on bundled payments around an episode of care for Medicaid
beneficiaries. Per the legislation, the demonstration project may target specific Medicaid
beneficiaries, and it is worth exploring if IL could target Medicaid beneficiaries in the IL
Medicaid 1915 (c) waiver program: Community Care Program. The majority of these individuals
are dual eligibles as CCP serves persons 60 years and older. This presents an opportunity to
focus on a particularly vulnerable, high-cost, high-need population.


IL should formally evaluate the State Balancing Incentives Program, a Medicaid grant funded
project to incentivize the spending of Medicaid dollars in a home and community based setting
(HCBS). IL’s Older Adult Services Advisory Committee recently submitted a formal Plan for
Long-Term Care Reform to the Governor and included under the primary goal of “improving
funding for HCBS programs” the following recommendation: “Evaluate the impact of the state
balancing incentive program and prepare an application which will be submitted to CMS.” This
opportunity fits in with Illinois’ existing focus to balance long-term care services between
institutional and HCBS, and offers a funding mechanism to support on-going efforts to balance
long-term care. IL should work closely with stakeholders when addressing the requirements of
this provision: establishing a single-point of entry system for long-term services and supports,
adopting conflict free case management, and application of standardized assessment instruments
for determining eligibility.


IL should explore the idea of using a portion of the enhanced FMAP funding received through
the Money Follows the Person program to promote quality housing options for individuals in
the community. If IL is promoting HCBS through MFP, it is a necessity to provide access to
affordable housing.