Democrats Say Rauner Bypassing Review of Medicaid Changes

May 4, 2017

Sen. Dave Koehler, D-Peoria.

Medicaid is one of the largest pieces of the state’s budget, and Democrats say the governor is trying to significantly alter the way the program is managed — without oversight from the legislature.

Gov. Bruce Rauner announced in February a new format by which healthcare companies and organizations bid for contracts to administer Medicaid. Five years ago, Illinois moved to increase the use of outside parties to take care of the paperwork and administration of Medicaid.

Sen. Dave Koehler, D-Peoria, says he supported the effort back then, but now he hears complaints from hospitals and doctors that private for-profit administrators are falling short.


“We’ve given them all the money, and we say, okay you take care of it. And so when problems arise, the issue is, ‘Well, who addresses those issues?’ The truth is nobody,” he said.

Problems are growing thanks to the budget stalemate, and the state’s delays in paying third parties to reimburse hospitals and doctors for care.

Rauner’s new Medicaid strategy involves cutting down the number of third-party administrators from 12 to as few as five. He says thinning the herd means providers will only have to deal with a few companies, and that will provide more efficiency.

It’s all part of an effort to move Medicaid further into a “managed-care” system, in which patient care is a more coordinated effort between healthcare and social service providers, rather than older models which simply included patients getting immediate care from doctors.

Sen. Heather Steans, D-Chicago, says coordinated care is the right direction, but there are lots of concerns. She and other Democrats say Rauner is ignoring the traditional process when there’s no budget.

“Medicaid is an enormous source of concern, and just trying to make sure we have a very transparent process in which everybody is playing on a level playing field, is of concern when there’s not been much opportunity for input from policymakers,” Steans said.

Managed-care organizations, or MCOs, have become a popular method for states’ management of their Medicaid systems. But Rauner’s plan to reduce the number of MCOs and simultaneously expand their reach to the entire state has some Democrats worried about non-profit MCOs.

A network of hospitals in Chicago run an MCO called Family Health Network. FHN is targeted at Medicaid recipients in Cook County. Rauner’s new strategy calls for up to two MCOs to operate in Cook County exclusively, but Democratic lawmakers say it’s intended to cut out non-profit MCOs like FHN, and grow the presence of for-profit companies.

A spokesperson for FHN said it had no comment at this time, and has not taken any position on the governor’s plan.