Illinois Medicaid redetermination increasingly important to control costs

The proportion of Illinois Medicaid enrollees found to be ineligible remains high, according to the state’s Medicaid Redetermination Project Quarterly Report for the second quarter of 2014. But here’s the kicker: The state will end up paying for more and more of them, regardless of eligibility. According to the report, 55 percent of the reviewed...

The proportion of Illinois Medicaid enrollees found to be ineligible remains high, according to the state’s Medicaid Redetermination Project Quarterly Report for the second quarter of 2014.

But here’s the kicker: The state will end up paying for more and more of them, regardless of eligibility.

According to the report, 55 percent of the reviewed cases were cancelled for those enrolled in the Medicaid program only (and not simultaneously enrolled in the Supplemental Nutritional Assistance Program or cash assistance).

Despite the fact that Illinois law requires eligibility to be verified annually, Medicaid redetermination (the review process by which an enrollee is deemed eligible or not) has not been easy to achieve – and will likely continue to be a challenge.

A 2013 state audit found between 15 to 20 percent of Medicaid cases to be overdue for eligibility redetermination. But in many cases, the methods used for redetermination –in this case, “passive” redetermination, which does not include actual verification and only presumes eligibility – were inadequate. The report also noted that passive redetermination made the state’s delinquency rate likely appear lower than it actually was. The audit also found that reverification, in some cases, had not been conducted in several years.

In response to these failures, a private contractor, Maximus, was brought in to conduct eligibility redeterminations. But that effort was severely limited as a result of an AFSCME challenge.

Today, Maximus only provides preliminary recommendations based on a review of electronic records. And the use of private-sector workers in reviewing the cases has now been discontinued in favor of a system run by state workers, many of whom are new hires.

But the state simply can’t afford to skirt around this issue much longer.

The Medicaid redetermination effort is going to become increasingly important as the state shifts Medicaid enrollees into managed care. Historically, the cost of the Medicaid program was based on medical claims. But going forward, the state will be making more and more capitated payments (a set amount per enrollee regardless of claims costs) to managed care companies.

Simply put, absent a robust and timely verification system, the state will be paying for every single enrollee – eligible or ineligible – so long as they remain on Illinois’ Medicaid rolls. The state continues to work through the original redetermination backlog, as well as those cases that were passively redetermined but will soon face a new challenge.

Now that the state has expanded the Medicaid program – primarily to able-bodied adults – the Medicaid redetermination caseload will be even larger.

With 405,000 new Medicaid enrollees this year as a result of the Medicaid expansion, the importance of timely and stringent Medicaid redetermination needs to be a top priority. Lax redetermination not only perpetuates waste and fraud in the program, it diverts precious funds away from the neediest patients, squeezes out spending in other priority areas and violates the trust of taxpayers who foot the bill for the program.