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Some medical equipment suppliers to get whacked with huge rate cut

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Illinois

IlliniCare, a private insurer that’s part of Gov. Bruce Rauner’s Medicaid managed care overhaul, is cutting reimbursement rates to medical suppliers by up to 50 percent.

The rate cut beginning on Jan. 1 impacts suppliers that provide durable medical equipment, such as wheelchairs, oxygen tanks and ventilators, to low-income residents on Medicaid.

The move not only will impact suppliers’ business, but could fuel their exodus from Medicaid managed care, leaving patients in the lurch. Sen. David Koehler, a downstate Democrat and a critic of how the state has further privatized Medicaid by outsourcing it to insurance companies, has proposed legislation to require that insurers pay suppliers as much as the state does.

“I think we have to watch this very carefully because, especially in smaller towns, we may just cut off the supply that may be very vital to someone’s health,” Koehler said. […]

John Hoffman, a spokesman for the Illinois Department of Healthcare and Family Services, which runs Medicaid, said in a statement that HFS is committed to ensuring that insurers offer Medicaid members services and equipment. But “it is the responsibility of the health plans and providers to negotiate with each other to accomplish this within the framework of contracts, laws and rules overseen by the Department.”

Doesn’t look like a negotiation to me.

posted by Rich Miller
Thursday, Nov 16, 17 @ 9:11 am

Comments

There’s been very little reporting on anything to do with the new Medicaid contracts. The last update on the HFS website about the process is dated 9/22/2017. Are all the contracts with MCOs actually finalized? I have heard that they are not.

Sorry to be cynical, but given that the whole process has been shrouded in secrecy, is Jan. 1 going to arrive with a smooth rollout? Has anyone asked the administration?

Comment by Moe Berg Thursday, Nov 16, 17 @ 9:18 am
Happy holidays from the governor.

Comment by Flynn's mom Thursday, Nov 16, 17 @ 9:24 am
The plans get paid a per patient per month fee to provide care to patients. The fee is based on what state pays under regular fee for service Medicaid. When plan reduces its fee paid to suppliers by 50% who gets savings? State or health plan bottom line?

Comment by Dozer Thursday, Nov 16, 17 @ 9:29 am
Pharmacies have been getting wacked ever since they changed to the MCO model. But it for $10 and sell it for $8 is no way to do business but that is how it is currently set up with no recourse!!

Comment by BIG R. Ph Thursday, Nov 16, 17 @ 9:31 am
MCOs will always find a way to extract profit. Illinois will always find a way to get their cost savings. These competing pressures are brought to bear on the sick, disabled, and elderly. This is a moral, not a fiscal, dilemma. Public Austerity + Privatized Profit = Despair.

Comment by Dome Gnome Thursday, Nov 16, 17 @ 9:34 am
Back to IlliniCare, David Doubek, president and owner of Doubek Medical Supply in south suburban Alsip, received a letter from the insurer in September about the reimbursement changes. IlliniCare now pays around the same rates as the state, he said.

“This is a pretty deep cut that IlliniCare has decided to take,” Doubek said. “There’s no explanation. There’s nothing that I know of or any reason that they decided to do this.”

Perhaps this, he adds: “IlliniCare is going to make more money if they’re paying us less.”

Insurers that won new managed care contracts did agree to be paid less by the state Medicaid program, though carriers presumably will cover more enrollees, and therefore generate more revenue. But no other insurer in managed care has cut rates so steep, Doubek said.

IlliniCare isn’t a big piece of Doubek’s business, around six percent. But that represents about 300 customers who over the last six months were insured by IlliniCare, he estimated. They might have to find a new supplier. Doubek said he’s leaning towards ending his contract.

Rauner doesnt have a social agenda, like protecting the vulnerable. You are on your own. But hes never been happier.

Comment by Langhorne Thursday, Nov 16, 17 @ 9:50 am
I worry about people being shifted into IlliniCare who have no idea what is about to happen to them.

Comment by Anonymous Thursday, Nov 16, 17 @ 10:25 am
Repeal the ACA and pass medical costs to patients…thanks GOP…

Comment by Loop Lady Thursday, Nov 16, 17 @ 10:37 am
The MCO reorganization was the largest procurement in state history, and it was done completely behind closed doors. Rep. Harris and others had a bill to undo the procurement, and the veto override was never called because HFS said the contracts were signed and there was nothing the GA could do. Now, it turns out the contracts aren’t even final? Unbelievable.

Comment by Anon Thursday, Nov 16, 17 @ 11:05 am
Rauner’s hedge fund strategy at work.

Comment by Ok Thursday, Nov 16, 17 @ 11:12 am
I’m usually able to give a local respiratory provider a couple of days’ notice to schedule the setup of a ventilator or oxygen. What happens after Illinicare institutes these changes and the provider is 100 miles away and something goes wrong with the patient’s equipment? To me this has all the markings of a 911 call an unnecessary readmission.

What quality diapers and pull-ups will my patients be getting at 50% of the state’s current rate? I’m worried my patients will end up back in the hospital with decubitus ulcers or worse. I’m going to alert my patients to avoid Illinicare and select another MCO.

Comment by Maggie62901 Thursday, Nov 16, 17 @ 11:18 am
So … since Rauner can no longer squeeze the providers, he’s going to achieve any savings by squeezing or eliminating the recipients?

Comment by RNUG Thursday, Nov 16, 17 @ 1:05 pm
I work in the Chicago area office for a medical supply company. We are contracted with most of the current MCOs including Illinicare. According to what I heard from coworkers, we have or will be terminating our contract with Illinicare. From what I’ve been told the only products we would be able to provide for what Illinicare will be reimbursing are crap. It sounds like rather than providing generic ostomy and incontinence supplies that may or may not fit/leak our management has chosen not to compromise our reputation and terminate our business with IlliniCare.

A lot of our business comes from Illinois Medicaid (since we only do business in Illinois) and I’m worried if we can’t take IlliniCare patients, many of our referral sources will use other companies. I have a wife and baby to feed and I need my job. Are the other DME companies out there terminating their relationship with IlliniCare or are we the only ones?

Comment by Anthony Rizzo Thursday, Nov 16, 17 @ 3:02 pm