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Transition to Medicaid Managed Care in Illinois

Kristen Pavle
August 30, 2013
In July of 2013, Health & Medicine Policy Research Group developed a report: “The Transition to Medicaid Managed Care in Illinois: An Opportunity for Long-Term Services and Supports Systems Change.” The Executive Summary is posted here as a blog post explaining Illinois’ recent and important health system reform initiative of transitioning from a Medicaid system that is primarily fee-for-service to a coordinated or managed care system.  You can access the full report by visiting Health & Medicine Policy Research Group’s website or click the title of the report above.

Executive Summary
In January 2011, the 96th Illinois’ General Assembly passed legislation mandating 50% of the Medicaid population to be covered in a risk-based care coordination program, or managed care program.  In Illinois, managed care is an approach to catalyze health systems that provide services to the Medicaid population to change their practices in alignment with the Institute for Healthcare Improvement’s triple aim  of:
•    Improving care on the consumer level (e.g. quality and satisfaction)
•    Improving population health
•    Reducing the cost of health care
Illinois’ State Medicaid Agency (SMA), the Department of Healthcare and Family Services (HFS), is providing leadership for the transition from a primarily fee-for-service (FFS) Medicaid system to a new managed care system.  Under HFS’ leadership, Illinois’ Medicaid managed care (MMC) model is based on an ‘all-in’ approach where all Medicaid services will be integrated through managed care organizations (MCOs).  The ‘all-in’ approach is a best practice within MMC and a good foundation for the development of Illinois’ MMC system.

Further, the ‘all-in’ approach includes long-term services and supports (LTSS) for older adults and persons with disabilities, both institutional (i.e., nursing facility) and home- and community-based care.  HFS is working in partnership with the Department on Aging (DOA) and the Department of Human Service (DHS) to ensure quality and to provide oversight of LTSS for older adults and persons with disabilities in the new MMC system.  The choice to include LTSS gives Illinois the opportunity to build on the mostly medical model of the triple aim and include important social services that address the social determinants of health.

This report was developed in partnership between Health & Medicine Policy Research Group and Illinois’ Older Adult Services Advisory Committee.  The report provides an overview of what the transition from a Medicaid FFS to a managed care system will entail for stakeholders in Illinois, paying particular attention to LTSS stakeholders.  Six stakeholder groups are identified to include:
1.    Consumers
2.    Advocates
3.    Providers (including informal family caregivers)
4.    Payers (including state government agencies)
5.    Managed care organizations
6.    Researchers/academics

The transition to an MMC system is an almost immeasurable challenge because it represents not only a significant change from how stakeholders have worked together for several decades in the FFS system but also how they will work together in the future.  The inclusion of LTSS in the MMC system is particularly challenging because of the inexperience of states across the country in implementing ‘all-in’ managed care models.  Best practices, standardization, and demonstrated outcomes of these models are only now beginning to emerge.

This report provides a synthesis of a literature review on the topic of MMC and LTSS, and findings from interviews with key informants from Illinois and from several experienced MMC experts. Opportunities for Illinois to take advantage of these findings in order to ensure a smooth transition to an MMC system are provided at the end of the report.  The opportunities are summarized below and formatted in a way to address the 4 greatest challenges identified for Illinois as it transitions to an MMC system

Challenge: Effective Stakeholder Engagement
Stakeholders working in silos will limit Illinois’ capacity to achieve an integrated MMC system that improves health care, improves population health, reduces costs and addresses social determinants of health. In regards to LTSS, without formal channels for LTSS non-governmental stakeholder engagement, LTSS consumers are at risk for poor health care and poor health outcomes.  

In order to integrate care in the new MMC system Illinois should go beyond innovation within silos and look to creating accountable partnerships across silos. Although State departments must certainly take on a central leadership role in the transition to MMC, meaningful stakeholder engagement is essential through all phases of the transition to the MMC system. The states interviewed for this project and the literature strongly support formal development of stakeholder engagement processes (page 34-36).

Opportunities for OASAC Engagement in Illinois:
1.    Increase State government transparency
•    Develop a user-friendly website that includes comprehensive information about the Medicaid Managed Care (MMC) system.
•    Share State department organizational charts that detail which people/agents are responsible for MMC activities.

2.    The Older Adult Services Advisory Committee (OASAC) should create a long-term services and support (LTSS) stakeholder engagement workgroup.  While the workgroup should focus on LTSS stakeholder engagement, the model development should have applicability and utility for all stakeholder groups.
3.    OASAC should review its membership structure in response to the transition to an MMC system and an ADRC system.  

4.    OASAC should immediately submit to the Illinois Department of Healthcare and Family Services (HFS) the MMC LTSS quality measures research conducted in conjunction with this report.  
•    In collaboration with LTSS stakeholders, HFS should identify additional priority LTSS quality measures for the Illinois MMC system.

Challenge: Adequate State Government MMC Expertise
MMC is not a typical Medicaid program in that a large number of beneficiaries are enrolled into one integrated program, therefore requiring a significant amount of money to be paid to one entity: an MCO. This represents a dramatic shift in how the Medicaid program has been historically structured, where beneficiaries were spread among many providers through many separate programs and service line FFS reimbursements (page 18).

As a result, the State must be prepared to provide a level of oversight greater than in the FFS system (pages 18-19). Therefore, Illinois’ state agencies must be knowledgeable about managed care in order to provide appropriate oversight of MCOs.  For LTSS, this requires multiple State agencies to have trained staff and appropriate organizational structures.  These agencies include DOA, HFS, and DHS (pages 19-23).

Opportunities to develop adequate state government MMC expertise in Illinois:
Illinois’ governmental agencies should train and recruit specific, qualified MMC staff with expertise to provide oversight and monitoring in the MMC system. Illinois’ governmental agencies involved with MMC should:
1.    Assess their current staff to determine where gaps in staff expertise exist and where to target training or new staff recruitment.

2.    Collaborate with local academic institution(s) and managed care organizations (MCOs) to develop a managed care training curriculum for State government employees.  

3.    Assess their current organizational structures to determine if the current structures will allow for sufficient MMC oversight.

4.    Evaluate the existing MMC LTSS oversight structure that is currently the responsibility of three agencies: Department on Aging (DOA), HFS, and Department of Human Services (DHS).  
•    Clearly articulated roles and responsibilities should be developed between agencies through Memorandums of Understanding (MOUs) that clearly define MMC LTSS oversight structure.

Challenge: Aging and Disability Resource Center (ADRC) Integration with MMC
Stakeholders working in silos risk losing the opportunity to better integrate medical and social care and to rebalance LTSS in favor of HCBS.  HFS, as the State Medicaid Agency, is ultimately responsible for the MMC system and developing a broad coordination effort across systems to assure there is no wrong door for MMC consumers.

DOA is providing leadership in the development of an ADRC system in partnership with the aging and disability communities to ensure no wrong door for LTSS consumers (pages 40-42). As DOA, DHS, and HFS develop the work plan for the State Balancing Incentive Payment Program (page 41), the ADRC network will become an important entry portal for the MMC system.

ADRCs are a coordinated-point-of-entry or no-wrong-door system of access to LTSS and include aging and disability network stakeholders.  ADRCs have expertise in community-based social services that include Medicaid funded services, but also include other funded services like those provided through the Older Americans Act.  

Under DOA’s leadership, ADRCs have the expertise and experience to develop a strong community-based LTSS network. Through deliberate and formal partnerships between HFS and DOA and engagement of ADRC stakeholders, the MMC and ADRC systems can better integrate medical and social care for individuals who require LTSS, and promote the balancing of LTSS in favor of home- and community-based care (pages 41-42).

Opportunities for ADRC integration with MMC in Illinois:
1.    DOA should develop a strategic vision for its ADRC network that clearly articulates the formal relationship between ADRCs and the MCOs.

2.    Illinois’ Governor’s Office should evaluate the utility and potential of integrating State Aging and Disability departments.  

3.    Providers and ADRC stakeholders should negotiate contracts with MCOs that go beyond the typical FFS model and allow for innovative new reimbursement methods.

Challenge: Adequate Legislative Oversight of MMC
Legislative governance is essential in order to ensure consumer protections and quality assurances in Illinois’ MMC system.

Opportunities for Adequate Legislative Oversight of MMC in Illinois:
Develop a Medicaid managed care legislative subcommittee under the auspices of the Human Services Committee.

Illinois has embarked on an ambitious plan to improve healthcare, improve population health, reduce healthcare costs, and integrate medical services with social services that address the social determinants of health.  Recognizing the fluidity of state government and the political process, if Illinois takes advantage of the opportunities described in this report, the State will better position itself to achieve these goals.  

While MMC is not the silver bullet that will single handedly achieve these goals, MMC—along with Illinois’ many other health care reform initiatives—has the potential to move use closer to realizing them.  Integrating LTSS into managed care is an important piece of this puzzle as this allows the state to address the social determinants of health.  Through leadership and collaboration across stakeholder groups, Illinois can position itself on a stable course of reform and has the potential to become a leader in MMC including serving LTSS customers.