Delving into budget cuts: Part 4

By Jamey Dunn

The Illinois Department of Healthcare and Family Services — which administers Medicaid, one of the biggest demands on the state funds — is trimming $216 million according to Gov. Quinn’s budget plan.

According to Quinn’s proposal, the department will be able to maintain the federal requirements for the state to get matching funds for the program. The following is a breakdown of Quinn’s proposals for the agency. (Italics are pulled directly from Quinn’s budget.)

Unified budgeting allows state agencies to work together to meet the long-term care needs of Illinois residents on Medicaid in the most appropriate, community-integrated setting and maximize federal matching funds.

Unified budgeting involves a multi-agency approach to long-term care, instead of each agency trying to tackle the issue independently. “The goal of this unified budgeting approach is to allow a more systemic view of available resources and planned expenditures, specifically as they relate to supporting the transition of individuals currently residing in nursing facilities or other institutional settings to the community.

The budget supports a pilot managed care program that will save the state $200 million over five years by providing 40,000 older adults and people with disabilities in Medicaid with care from integrated delivery systems.

The department chose managed care groups Aetna and Centene-IlliniCare to begin providing services in 2011 for seniors and people with disabilities in Cook, DuPage, Kane, Kankakee, Lake and Will counties. Participants sign on for the program, and some services will be phased in over several years.

Critics of the managed care pilot program have voiced concerns about making cost savings the priority over the care of two vulnerable populations. However, DHFS officials say improved communication among patients’ various health care providers will lead to better care. “The system will link primary, specialty and institutional services and will improve care for Illinois’ most vulnerable residents while saving taxpayer dollars,” Stacey Solano, a spokesperson for DHFS said in a written statement.

The budget allows implementation of recently passed, landmark reforms to ensure the safety of every nursing home resident in the state.

DHFS is working to determine appropriate reimbursement rates, so the money the state gives nursing homes for services would ensure that they provide adequate care and meet new staffing requirements.

The department is strengthening documentation requirements to ensure that only eligible individuals receive Medicaid benefits.

Solano said the department is doing a “full top-to-bottom review of eligibility and enrollment procedures.” The process is still in a preliminary stage, and no cost saving projections have been made.

• $207.8 million decrease in Medicaid lines and Group Insurance. The department plans to enact various quality and efficiency initiatives.

Solano said medical programs and group health insurance will get less money from the revenue fund, but there are no plans to cut programs or eligibility.

A total of $70 million in savings comes from renegotiating a deal with AFSCME on health benefits for state workers.

The state is participating in federal Early Retirement Reinsurance Program, which is part of the health care reform package passed in March. Employers that continue to cover early retirees under their insurance programs will be eligible for subsidies, and Illinois businesses could get between $42 million and $112 million. Solano said the program would help cushion the blow of some of the state cuts.

The department is also emphasizing preventative care to help people avoid serious and costly health problems. “Healthier people, mean fewer re-hospitalizations and services needed, which translates into cost savings for the state,” Solano said.

• $8.0 million in operations reductions

DHFS plans to reduce travel spending by 13 percent, equipment spending by 23 percent and telecommunications costs by 7 percent. With respect to equipment purchases, Solano said, “Purchases will be limited to only replacing equipment necessary for purposes of life safety, client service and continued agency operations.” The agency is not planning any layoffs, but 71 positions that are currently open will not be filled.

Solano added that because Quinn was counting on Congress extending the elevated Medicaid match that was set to expire in December, enough money was set aside to keep up the 30-day payment cycle the federal government requires on certain services for more matching funds.

(For information on cuts to the Department of Children and Family Services, Department of Agriculture and the Department of Natural Resources, see the first, second and third installments of "Delving deeper into the budget cuts" in earlier blog items.)