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*** UPDATED x1 *** Audit finds a mess in $60 billion Medicaid MCO program

Tuesday, Jan 23, 2018

* From the Illinois Auditor General’s office

On May 31, 2017, House Resolution Number 100 was adopted and directed the Office of the Auditor General to conduct an audit of Medicaid Managed Care Organizations (MCOs), which included a comparison of State expenditures between MCOs and the Medicaid fee-for-service program for fiscal year 2016.

The audit found:

Auditors determined that the Department of Healthcare and Family Services (HFS) did not maintain the complete and accurate information needed to adequately monitor $7.11 billion in payments made to and by the 12 MCOs during FY16.

Specifically, HFS could not provide auditors with the following information:

    * all paid claims to Medicaid providers by the MCOs in FY16;
    * Medicaid provider claims denied by MCOs in FY16;
    * the administrative costs incurred by MCOs in FY16;
    * the coordinated care costs incurred by MCOs in FY16; and
    * Medical Loss Ratio (MLR) calculations since calendar year 2012.
    * In FY16, HFS made multiple monthly capitation payments to MCOs for the same months for the same individuals totaling $590,237.

The audit recommends HFS should:

    1) monitor the actual administrative costs incurred by its MCOs to ensure that the administrative costs do not exceed what is allowed by contract;
    2) calculate the Medical Loss Ratios for the previous four calendar years (2013 through 2016), and determine whether the State should be reimbursed by MCOs due to overpayment;
    3) require all MCOs to submit all Medicaid provider payment data for all services (including DASA, LTC, and waiver services), and perform on-site reviews of the MCOs’ financial data systems and test the completeness and accuracy of the data reported to HFS that is used to monitor the payments made to Medicaid providers;
    4) provide clear guidance to the MCOs for reporting denied claims, and ensure that MCOs provide the denied claims to HFS as required by contract;
    5) ensure multiple monthly capitation payments are not being made for the same Medicaid recipients, immediately identify and remove all duplicative recipients from its eligibility data, and recoup any overpayment of duplicate capitation payments; and
    6) ensure that it effectively monitors the newly awarded MCO contracts to ensure compliance with all contractual provisions.

HR100 is here.

*** UPDATE *** From Rep. Dave McSweeney…

I just read the Auditor General’s performance audit of the FY 16 MCO contracts. The most damning part of the report is the conclusion that ‘HFS did not maintain the complete and accurate information needed to adequately monitor $7.11 billion in payments made to and by the 12 MCOS during Fiscal Year 16.’

This is another example of the hypocrisy of Governor Rauner. He runs around the state claiming to be a fiscal conservative, but his real record as Governor reflects extreme financial mismanagement.

- Posted by Rich Miller        

16 Comments
  1. - BIG R. Ph. - Tuesday, Jan 23, 18 @ 3:29 pm:

    Is anyone surprised?

    Here in pharmacy the MCO’s are paying less than the actual acquisition cost of the medications.

    For Primary care they are paying $11 for an office visit.

    The MCO’s are actually taking on the risk of insuring the Medicaid recipients but when the stuff hit the fan during the no budget standoff last summer, providers were not getting paid. These outfits do NOT have the wherewithal to pay the claims unless they get paid by the State. No other insurer in the State would get away with this! They would be shut down!

    Unfortunately, (and this is hard to say for someone who has been dealing with Illinois Medicaid for 29 years) we need to go back to traditional Medicaid.

    The MCO experiment has been a disaster for the State, for providers and for recipients!


  2. - JS Mill - Tuesday, Jan 23, 18 @ 3:39 pm:

    So is this how you run a business into bankruptcy governor?


  3. - Norseman - Tuesday, Jan 23, 18 @ 3:45 pm:

    JS Mill, you can’t blame Rauner. Remember, he’s not in charge. In November, we have a chance to put someone in charge.


  4. - Groundhog Day - Tuesday, Jan 23, 18 @ 3:56 pm:

    More waste, fraud, and abuse his executive agencies are set up to generate. Plus not enough employees to oversee the work.


  5. - Moby - Tuesday, Jan 23, 18 @ 4:04 pm:

    So let me get this straight. Rauner wants us to re-elect him to get rid of his own waste, fraud and abuse? Hmmm…


  6. - wordslinger - Tuesday, Jan 23, 18 @ 4:05 pm:

    –This is another example of the hypocrisy of Governor Rauner. He runs around the state claiming to be a fiscal conservative, but his real record as Governor reflects extreme financial mismanagement.–

    Yeah, well, until HB40 you were an enabler in very good standing, Rep. McSweeney.


  7. - Honeybear - Tuesday, Jan 23, 18 @ 4:06 pm:

    Rauner is gonna hate this.
    1)He’s going to have to hire a bunch of Union folks
    To clean up this mess.
    2) I guess technology doesn’t fix it all.
    3) I’m sure the IT contract is going to be looked at closely.
    4) it doesn’t seem like Dir Norwoods “primary goal is to keep costs sustainable…” Seems like Rauners superstar let costs and records go by the wayside.


  8. - Redraider - Tuesday, Jan 23, 18 @ 4:14 pm:

    We need the legislature to pass a job requirement for Governor. They have to promise to take charge


  9. - Nick Name - Tuesday, Jan 23, 18 @ 4:15 pm:

    But hey! Look! Comptroller Mendoza bought a second-hand SUV!


  10. - Langhorne - Tuesday, Jan 23, 18 @ 4:29 pm:

    BTIA. =. FAIL

    An “up” day


  11. - Precinct Captain - Tuesday, Jan 23, 18 @ 4:33 pm:

    Bruce’s $60 Billion Medicaid Mess


  12. - Chicagonk - Tuesday, Jan 23, 18 @ 4:47 pm:

    MCOs aren’t going away and the wrong response would be to return to a fee for service system. That being said, the audit findings need to be addressed because MCOs need to be aggressively managed in order to achieve the best outcomes for both the patient and the state.


  13. - Anonymous - Tuesday, Jan 23, 18 @ 4:57 pm:

    Can you imagine thinking “Since we have no ability to regulate this multi-billion dollar program, so the best solution is probably to double its size and scope.”

    The best people.


  14. - justacitizen - Tuesday, Jan 23, 18 @ 7:46 pm:

    On a related note, whatever happened to the investigation into auditor general Mautino? Did it just go away?


  15. - Friendly Bob Adams - Tuesday, Jan 23, 18 @ 10:20 pm:

    It’s true the SMART Act was passed under Quinn. But Rauner perfected the contracting scams that resulted in this audit deficiency. There is no accountability for billions of dollars yet it’s a nice payday for the managed care organizations and Deloitte. It’s a win-win for everyone. Except the state of Illinois.


  16. - wordslinger - Tuesday, Jan 23, 18 @ 10:41 pm:

    I’d say whoever can award a set of contracts for $63B just might be the most powerful office-holder in the state. That’s real money; any other babbling about “power” is just spin when you can do that.

    And just look at how the Rauner crew did it.

    The governor’s office wrote the RFP for the MCOs, and estimated the cost would be between $30B and $40B. Yet when they awarded the contracts, the cost came in at $63B.

    That’s just a wee bit off, by $23B to $33B, but I’m sure it’s all on the square.

    And the $7B that wasn’t monitored — I’m sure it’s all a big misunderstanding.

    But if the governor — or anyone else — wants to look for that “corruption, waste, fraud and abuse” he’s always talking about, this would be a good place to start.


Sorry, comments for this post are now closed.


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