The annotated Bill Brady --A line-by-line look at the GOP candidate's analysis of Medicaid reform

The annotated Bill Brady --A line-by-line look at the GOP candidate's analysis of Medicaid reform
By Eric Zorn
Copyright by The Chicago Tribune
Friday, October 22, 2010


There's been a lot of talk in the race for governor about the staggering costs of Medicaid and what needs to be done to get those costs under control.

Since most of us aren't on Medicaid and may not follow the issue as closely as we should, here's an annotated version of GOP candidate Bill Brady's response when he was asked during Sunday's gubernatorial debate to name "one specific program" he'd cut from the state budget if elected.

Brady: Well, the Medicaid program under Gov. (Pat) Quinn allows people like Gov. Quinn to walk in and receive an eligibility card. We don't verify eligibility in the Medicaid program.

This is false. Applicants for Medicaid, the combined federal/state program that provides health care to low-income and disabled people, are screened to see if their income is low enough for them to qualify. They must present a recent pay stub or other evidence to establish eligibility. And the state Department of Healthcare and Family Services "checks federal data for income sources, such as Social Security and unemployment compensation," according to the agency.

There is, however, legitimate concern that screening is not thorough enough. Democrats have resisted Republican efforts to ask for two pay stubs.

Brady: In fact, (Quinn) doesn't even have a reaffirmation program after one year.

"Eligibility must be reviewed at least annually" except when it comes to children, said a Healthcare and Family Services spokesman. "For most covered persons, this requires that income be documented again." (for more on the eligibility & renewal issues, click here)

Brady: The lack of competence in this administration is squandering tax dollars that shouldn't be squandered.

About one in five Illinois residents — an estimated 2.6 million people — are enrolled in Medicaid. That's about double what it was 10 years ago. But the increase — fueled by expansion of eligibility, the rising cost of health care and private insurance and two recessions — is similar to increases in other states (slightly smaller last year, actually) and in line with national trends.

Illinois has budgeted $15.2 billion this fiscal year for Medicaid — $8.4 billion of which will come from the federal government. A huge expense, yes, but according to the most recent data from the Kaiser Family Foundation's Commission on Medicaid and the Uninsured, our cost is only 4 percent higher per enrollee than the national average.

Is there fraud in the Medicaid program? No one denies it. The U.S. Government Accountability Office has estimated that 10.5 percent of Medicaid payments are improper. Three new state laws — introduced by Republican legislators and signed June 25, 2010, by Quinn — attacked that problem in part by increasing transparency in payments and authorizing outside audits.

Brady: In addition to that, the Medicaid program could be further enhanced by providing managed care. We could save over $2 (billion) to $3 billion by providing access to quality care at an earlier stage.

Illinois is behind most other states in moving Medicaid patients into HMO-style care plans. Resistance to the idea has been bipartisan and dates back more than 10 years, according to Republican state Rep. Patricia Bellock, who chairs the House committee on Medicaid and was on the 2009 joint legislative committee on Medicaid reform.

Bellock credits former state Rep. Julie Hamos (right), whom Quinn appointed in April to head Healthcare and Family Services, with working quickly to expand the managed care program under Medicaid that is now voluntary and has an enrollment of about 190,000.

Last month, Hamos announced an expansion of managed care to nearly 40,000 seniors and adults with disabilities — among the most expensive patients in the Medicaid system — that she estimates will save $200 million over five years.

That projection isn't guaranteed. A 2009 insurance industry analysis of 24 economic studies of Medicaid managed care programs nationwide (download the report .pdf) found that "savings varied widely — from half of 1 percent to 20 percent."

Brady: Gov. Quinn's program has failed to give access to the Medicaid recipients that actually deserve it. So this program needs to be reformed.

The state's "financial disarray has caused medical professionals to leave the program and has resulted in access problems for the very patients the program is designed to help," explained Brady's spokeswoman Patty Schuh on Thursday.

A Healthcare and Family Services spokesman responded that low reimbursement rates are driving health care providers from the system, and that problem will only get worse if funding is slashed for Medicaid.

Brady: (Quinn) has failed to deal with it.

No. This answer suggests Brady has failed to understand it.

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More -- here is the Brady campaign's full response to my queries Thurdsay:

As Governor, Bill Brady will focus on preserving the Medicaid program for those it is designed to serve – our most poor and vulnerable citizens. The current program is growing at an unsustainable rate of 8% a year. The financial disarray has caused medical professionals to leave the program and has resulted in access problems for the very patients the program is designed to help.

At $10.6 billion, Medicaid is the state’s largest program and efficiencies and savings must be realized in this program.

Managed Care: Illinois is way behind the national trend in our use of managed care in the Medicaid program. The state has done little to move to risk-based managed care. Quinn’s own Taxpayer Action Board report cited the ability of managed care to be “a substantial cost saver” in Medicaid. Quinn has recently begun a pilot managed care program. At this point in our financial crisis, Illinois needs more than pilot programs. Expert studies in recent years – including the Lewin Report – have indicated savings of at least $1 billion. An audit remains necessary in Illinois to determine the best way to proceed and determine if the state is properly using its Primary Care Case Management model or how it should be changed, determine the extended ineligible individuals are enrolled in Medicaid and determine the extent to which the state is paying is paying for services that aren’t covered or paying in excess for other care

Presumptive Eligibility: This is the practice of presuming that a Medicaid applicant is eligible for services at the point of contact (ex., emergency room, doctor’s office, clinic) and up until the time the application is reviewed by the Department.

Billing staff will ask if you have insurance. If you say no, they will ask if you are on Medicaid. If you say no, they can then give you an application to apply for Medicaid and treat you at that time. Medicaid will then pay for those services and any others you receive until the time the State determines that you are not eligible for Medicaid.

If a person receives Medicaid services during the time period they are “presumed eligible”, and are later found to be ineligible after their application is reviewed, the state still pays for the cost of services obtained during the period presumptive eligibility.

Passive Redetermination: This is the practice of re-upping Medicaid eligibility for an enrollee for another year without hearing from the enrollee themselves or without verifying that they are still eligible for the program. Once a person is on Medicaid, they are supposed to have their eligibility status re-determined at least once a year in order to make sure that their economic status is such that they are still eligible.

A recent Auditor General’s report (.pdf link) found that the Department of Healthcare and Family Services will extend eligibility if the individual did not respond to inquiries from the Department about whether their economic status has changed. Rather than actively determining eligibility, the Blagojevich Quinn Administrations have gone to passive redetermination.

One Pay Stub Income Determination – To further exacerbate the problem, Medicaid’s process for determining income verification is lax. Currently, a Medicaid applicant must only present one pay stub when they apply for Medicaid. That policy was put into place by the Blagojevich/Quinn Administration. The pay stub is then extrapolated over a year to determine the applicant’s annual income for purposes of determining Medicaid eligibility. This process is ripe for abuse. Applicants with varying pay checks need only bring in one of their smaller paychecks and they can get enrolled in Medicaid for one year. Stricter income verification standards must be applied.

Healthcare and Family Services responds:

HFS through its Office of Inspector General (OIG) conducts investigations into allegations of client-based fraud or abuse. OIG’s responsibility is to provide professional investigative services and support to the HFS and the Illinois Departments of Human Services (DHS) in an effort to prevent, identify, investigate and eliminate fraud, waste and abuse in all programs administered by these Departments. OIG attempts to promptly investigate any person or entity suspected of fraud, waste or abuse and vigorously pursue criminal prosecution (if warranted) and recovery of overpayments. In order to effectively meet its mission, OIG performs several types of investigations in addition to existing programs designed to prevent fraudulent activities.

Specifically, Client Eligibility Investigations look at allegations of clients that misrepresent certain eligibility factors such as employment, family composition, assets and residence. Client Medical Card Misuse Investigations look at clients that are using a medical card improperly or when a medical card is being used without the client’s knowledge. Lastly, OIG operates the Recipient Restriction Program when eligible clients still misuse the Medical Assistance Program. Clients who develop a history of medical services which indicate abuse are reviewed by OIG staff and Medical Doctors, who serve as consultants to OIG, and restricted to a primary care physician, pharmacy or clinic for 12 to 24 months.

Investigations that demonstrate that a client’s conduct is criminal in nature are presented to law enforcement (State’s Attorneys, Attorney’s General Office, or the U. S. Attorney) for criminal prosecution. If a case is accepted for prosecution, OIG works with law enforcement to gather evidence that will result in a conviction, if appropriate. With any criminal disposition, restitution is sought to recover all monies due back to the state.

My analysis:

The statement from Brady's campaign all but concedes Brady was wrong or lying when he said anyone who walks in can get a Medicaid card and that Quinn hasn't done anything on the issue (elsewhere Brady has seemed ignorant of the fact that we have been expanding managed care under Medicaid). The statement also mischaracterizes the Auditor General's report and, according to HFS, gets wrong the issue of renewal and fraudulent service.