Senate Republicans Call for Action to Reform Medicaid

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[March 13, 2008]  SPRINGFIELD -- A group of Republican senators is urging the adoption of reforms they say will introduce common-sense improvements and fiscal restraint to the state’s Medicaid system.

Among the legislators targeting the state’s staggering backlog of unpaid Medicaid bills and proposing reforms to improve the level of service that Medicaid patients receive are state Sens. Christine Radogno, R-Lemont; Carole Pankau, R-Itasca; Dale Righter, R-Mattoon; and Bill Brady, R-Bloomington.

Righter noted that Medicaid is a system in desperate need of reform after years of spending increases, which outpaced revenue growth and pushed Illinois to the financial edge. He explained that because Illinois’ Medicaid spending is growing more quickly than the state’s revenues can sustain, Illinois can’t even meet its current obligations -- which has resulted in a $1.7 billion backlog of unpaid Medicaid bills to providers.

Because Gov. Rod Blagojevich continues to try to unilaterally expand the Medicaid system without legislative authorization, Righter is advancing Senate Bill 2463, which would limit new Medicaid expansions unless they are approved by the General Assembly.

"It’s time to put politics aside and reform Medicaid in a way that preserves the system for today while protecting the children and taxpayers of tomorrow," said Righter.

Another key component of the package would close a little-known loophole in Illinois law that has for decades allowed Illinois governors to use a current fiscal year’s appropriation to pay the previous year’s Medicaid bills. Senate Bill 2846 would phase out the state’s Section 25 liabilities -- which now total almost $3.5 billion -- over the next 10 years.

Radogno noted that the measure would not only substantially reduce the state’s massive backlog of unpaid health care bills, but it would also ensure more prompt payments to the state’s Medicaid providers.

"Right now our Medicaid obligations are burgeoning out of control, to the detriment of the patients, the medical providers who wait months for their reimbursements and the state's budget -- which is being consumed by our Medicaid debt," explained Radogno. "Unless we take action to address this problem, our liabilities will only get worse."

In addition to the Section 25 reform and the freeze on new programs, the package also includes measures to:

  • Establish a series of benchmarks for care, quality and finances which providers would be required to meet in order to receive reimbursement for their services. (Senate Bills 2466 and 2467)

  • Require the Department of Healthcare and Family Services to use two consecutive pay stubs in order to verify Medicaid eligibility. (Senate Bill 2464)

  • Require families to meet asset-test standards for Medicaid eligibility. (Senate Bill 2465)

  • Require applicants for the All Kids program to meet the same citizenship standards already in place for all other Medicaid-eligible groups. (Senate Bill 2468)

Pankau explained that the Blagojevich administration has placed significant pressure on its employees to register as many people as possible for its health care programs, employing a "quantity" versus "quality" approach to its public assistance programs.

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In response, the 23rd District senator has introduced several reforms to clarify Medicaid eligibility and establish reasonable limitations to the program, including Senate Bills 2464 and 2465.

Senate Bill 2464 would create a new system of income verification that would require applicants to use two consecutive pay stubs in order to verify Medicaid eligibility, while Senate Bill 2465 would institute a standard of asset testing for Illinois families so that all participants would be subject to the same standards currently used for senior citizens and people with disabilities. Any asset tests would not apply to a family’s home or primary vehicle.

"For some time, the state of Illinois has overburdened the hospitals, nursing homes and doctors who provide care for our children, senior citizens and persons with disabilities," said Pankau. "These groups should not be the ones ‘balancing’ the state’s budget and putting services to the needy in jeopardy.  Few can argue that real reforms, including income verification and asset-testing standards, are not necessary, so that Medicaid funding is being directed to those who truly need it."

Additionally, Pankau has introduced Senate Bill 2468, which would require applicants for the All Kids program to meet the same citizenship standards already in place for all other Medicaid-eligible groups.

Brady said that common-sense changes will restore balance to the Medicaid system so it can continue to provide needed services for citizens who rely on it, without passing on staggering debt to future generations.

"Medicaid is intended to provide help to those who can truly not help themselves," Brady said. "However, since its inception, its guidelines and applications have been expanded to the point where it is eating up more and more of our tax dollars at the expense of other existing priorities that need our attention, such as education and public safety.

"Even worse, the people and businesses that provide Medicaid services are not being paid in a timely fashion," he added. "The system is clearly not working, and the problems are only going to get worse. We need to start finding solutions, and sooner rather than later."

Brady has plans to amend Senate Bill 2466 and Senate Bill 2467, in an effort to move Illinois toward a performance-based managed care system, which he says could save the state $110 million in the first year of implementation alone. The measures would establish a series of set benchmarks for care, quality and finances that providers would be required to meet in order to receive reimbursement for their services.

These reforms are based on the recommendations of the Lewin Report, commissioned by the Commission on Government Forecasting and Accountability in 2005, which found that a performance-based managed care system could result in substantial savings for Illinois taxpayers, and set a standard for health care services across the state of Illinois.

(Medicaid Reform Package) [To download Adobe Acrobat Reader for the PDF file, click here.]

[Text from file received from Illinois Senate Republicans]

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