Governor Quinn Announces Plan to Stabilize Illinois’ Medicaid System | Voice Your Opinion | April 19, 2012

As Shared from Illinois Government News Network :

Press Release April 19, 2012

Governor Quinn Announces Plan to Stabilize Illinois’

Medicaid System

Proposal Saves Medicaid System for Millions

SPRINGFIELD – April 19, 2012. Governor Pat Quinn today announced a plan to stabilize Illinois’ Medicaid system and prevent collapse of the program, one of his top priorities this session. The Governor’s plan creates $2.7 billion in Medicaid savings – which includes more than $2 billion in Medicaid reductions and federal matching funds from additional revenues on tobacco products. Today’s proposal follows weeks of productive talks led by the governor’s office with a working group comprised of members from all four legislative caucuses, as well as meetings with numerous provider groups.

“We must act quickly to save the entire Medicaid system from collapse, and protect providers and the millions of Illinois residents that depend upon Medicaid for their healthcare,” Governor Quinn said. “This proposal will fundamentally restructure our Medicaid system, alleviate the pressures on the rest of our budget, and ensure the program is sustainable for years to come.”

Medicaid provides healthcare to 2.7 million people in Illinois and coverage for half of all births. In his February budget address, the Governor highlighted the urgent need for a $2.7 billion reduction in the Medicaid program to prevent systemic collapse. At the end of the current fiscal year (FY 2013), Illinois will have $1.9 billion in unpaid Medicaid bills. The Civic Federation projects $21 billion in unpaid Medicaid bills by 2017 if Illinois’ Medicaid system is not fundamentally and immediately restructured.

The Governor convened a working group – comprised of members from each of the four legislative caucuses – to explore all options and develop a framework to save our Medicaid system. The working group met with and incorporated suggestions from many provider groups, including: hospitals, podiatrists, durable and disposable medical equipment companies, long-term care providers, dentists, pharmacists, and hospice providers.

Governor Quinn’s proposal reduces Illinois’ Medicaid liability by $2.7 billion, with three-quarters of the plan comprised of cuts, reductions and efficiencies, one-eighth in state revenue, and one-eighth in federal matching funds:

Cuts, reductions and efficiencies to 58 separate items totaling $1.35 billion (50 percent)

Rate reduction to providers totaling $675 million – (25 percent)

Additional revenue through a $1 per pack increase in the cigarette tax totaling $337.5 million (12.5 percent)

100 percent federal match funding from the increased cigarette tax totaling $337.5 million (12.5 percent)

“The status quo is not an option, and I want to thank the members of the working group, who have worked diligently with us to find real solutions to this problem, “Julie Hamos, Department of Healthcare and Family Services director, said. “What we are presenting today is a balanced approach that targets fraud and abuse, continues our move to coordinated care for Medicaid clients, and takes advantage of federal matching funds to make every dollar go further.”

The cuts, reductions and efficiencies across 58 separate items in the Governor’s proposal include:

Program integrity to prevent client and provider fraud

Elimination or reduced coverage of certain optional populations and services

Controls on use of Medicaid services to prevent over-use or waste

Adjustments to rates that are outdated or do not reflect budget realities

Expanded cost-sharing by clients

Redesigned healthcare delivery system through Coordinated Care

Complete implementation of all reforms in 2011 Medicaid reform law

To access more funds from the federal government, the Governor’s plan to limit Medicaid liability includes a tobacco revenue increase. By including a tobacco revenue increase, which amounts to just one-eighth ($337.5 million per year) of the $2.7B savings we must find in the Medicaid program, the state will be eligible for an additional 100 percent in federal matching funds ($337.5 million per year).

In addition to the direct revenue, raising the cost of cigarettes by a dollar will improve the health of the people of Illinois, reducing tobacco-related Medicaid and health care costs over the long-term. According to the American Cancer Society, tobacco use cost Illinois $1.5 billion in Medicaid spending last year. Increasing the cigarette tax by a dollar a pack will prevent more than 70,000 children from becoming addicted adult smokers, decrease youth smoking by 11 percent and save more than 38,000 Illinois residents from premature, smoking-caused death.

"The American Cancer Society is pleased to see the Governor combining smart fiscal and public health policy with this proposal,” said Katherine L. Griem, M.D., President of the American Cancer Society, Illinois Division. “Smoking remains the leading cause of cancer and this proposal will not only reduce the burden on the state’s Medicaid program for years to come, but more importantly, it will save lives and improve the health of people across Illinois,

http://www.illinois.gov/PressReleases/PressReleasesListShow.cfm?RecNum=10183

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Quinn wants deep cuts, $1-a-pack cigarette tax hike for Medicaid

By Monique Garcia, Ray Long and Alissa Groeninger
Chicago Tribune : Clout Street | April 19, 2012


Gov. Pat Quinn today outlined his plan to overhaul the state’s health care system for the poor, an approach that includes a $1-a-pack hike in cigarette taxes coupled with deep cuts that will sharply curtail services.

The governor repeatedly has said the state must find $2.7 billion in savings from the Medicaid the Medicaid program or risk its collapse under billions of dollars in debt.

Quinn proposed $1.35 billion in program cuts and reductions, which range from eliminating a discount prescription program from seniors to limiting eligibility that would remove thousands of patients from the insurance rolls. He also wants to slash rates for hospitals and other health care providers, which he says will save $675 million.

To offset the need for some cuts, the governor wants to raise cigarette taxes by $1 a pack, which his office says would generate about $675 million for healthcare once federal matching dollars are added in.

"If we don't deal with this problem right now, it will just get worse," Quinn said at a Springfield news conference this afternoon.

"We have to make some fundamental changes," Quinn said, noting the reductions, cuts and efficiencies have been "difficult."

Raising the tax of cigarettes by $1 a pack is part of a balanced approach that will cut down on the number of youngsters and help the state collect more matching federal funds, he said.

"We can't stand on the side and do nothing about it," Quinn said.

Republican leaders Christine Radogno of Lemont and Tom Cross of Oswego criticized Quinn for including the cigarette tax hike to avoid making all of the necessary cuts.. They issued a joint statement that said they wanted to hold Quinn to his word, citing his February budget speech in which he said Illinois “must reduce” Medicaid spending by $2.7 billion.

They called for Quinn to keep working with a bipartisan group of lawmakers to find more reforms and cuts in the Medicaid program rather than tax hikes.

One member of the working group, Sen. Dale Righter, R-Mattoon, said he won’t support the cigarette tax increase. A substantial part of his legislative district borders Indiana, and he fears the cheaper cigarette taxes will prompt people to travel across the border to shop and go out to eat when they to go Indiana to buy cheaper cigarettes.

Another member of the working group, Sen. Heather Steans, D-Chicago, said lawmakers will keep working with the governor’s office and a meeting is scheduled for next week.

She supported the governor coming forward with his own plan, saying he’s “proposing a whole solution.” But she cautioned that there’s “just not entire agreement” on the elements he’s rolled out.

Among Quinn's proposals:

-Eliminating the Illinois Cares Rx program, which provides access to discount prescriptions for 180,000 seniors and people with disabilities.

-Limiting eligibility for the state's Family Care insurance program for adults. Roughly 26,400 people would no longer qualify for coverage.

-Eliminating several so-called "optional" services the state provides that are not required by the federal government. They include group psychotherapy classes and chiropractic care for adults. Other optional services will be greatly curtailed, including occupational therapy, physical therapy and speech, hearing and language therapy for adults.

-Limiting podiatric care to patients with disabilities.

-Reducing hospice costs by 10 percent by working with providers to keep expenses down.

-No longer paying for electivec-sectiondeliveries and cutting the rates doctors are paid for delivering babies viac-section, which is more expensive than traditional delivery.

-Limiting who qualifies for weight loss surgery.

-Putting in place a review process before paying for certain medicines, including drugs that treat hemophilia, HIV and various forms of cancer.

-Placing a moratorium on new admissions to intermediate nursing care facilities and mental health facilities.

-Requiring patients to pay new and higher co-pays, including a $10 fee for unnecessarily seeking treatment at emergency rooms and new co-pays for those who receive generic drugs.

-Eliminating $13.8 million in grants to 11 teaching hospitals across the state.

The governor is scheduled to take questions on the topic in Springfield later this afternoon.