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Illinois Medicaid Upgrades its Information Technology in Anticipation of Expansion

By Dr. Ram Krishnamoorthi

On August 2th, the Illinois Department of Healthcare and Family Services (DHFS) announced the adoption of a new information management system for the state’s Medicaid program. In an unprecedented approach, the new system will result from a collaboration with the state of Michigan, to access its Medicaid Management Information System (MMIS). Rather than re-build its own outdated system from scratch, Illinois will gain a modernized system from its Midwestern neighbor which already runs a successful cloud-based technology to manage the millions of claims and other data for its Medicaid recipients. The new program, called Illinois Michigan Program Alliance Core Technology, or IMPACT, is promised to save taxpayers millions of dollars, both for the state and for the federal government, and expedites a much needed overhaul of the current system, which is 30 years old.

Though long overdue, the upgrade comes just in time. On October 1st, thanks to the Affordable Care Act, open enrollment begins for new health insurance options, and about 600,000 Illinoisans will be newly eligible for Medicaid.  Illinois DHFS and hundreds of private groups, such as health care advocacy groups and community clinics that take care of many uninsured patients, are getting ready to enroll as many of the uninsured that they can. Even though the eligibility criteria for Medicaid have been simplified greatly—any adult whose income falls below 133% of the poverty line, even if childless and without disability, would now be eligible—the task of verifying eligibility and executing enrollment is not a simple one.  In addition, managing all the data that will come as a result of the new and prior enrollees for one of the largest insurance providers in the state is a daunting data management challenge, one that will test an already stressed and frustrating Illinois Medicaid system.

The new system will be launched in early 2014, but will likely take several years to be fully operational. While it will not likely be ready for open enrollment this October, the move demonstrates a serious effort to make health care reform work in Illinois. The cornerstone of a new health care system is advanced information management, for insurance and payment as well as health care delivery. And Illinois’s Medicaid system has been frustrating for health care providers, the state’s dire budget woes, and for patients alike.

Most of the foreseeable benefit will be in cost to the taxpayer. For over 10 years, Illinois has been searching an inexpensive way to upgrade.  A stand-alone system , re-built from the bottom up, was estimated to cost $190 million, by conservative measures.  Through the IMPACT partnership, the cost for will be significantly reduced to $85 million for implementation through the shared internet “cloud” model. The project will be 90 percent federally funded, saving Illinois $10 million and the federal government $76 million. In operating the system over the next 5 years, it is also anticipated that the partnership will save $196 million for the federal government and $57 million for Illinois as compared to a traditional stand-alone system.

The collaborative approach makes sense. Why should there be so many different systems when Medicaid should largely look similar among different states? The answer previously was that they did not look so similar. The Affordable Care Act, though not entirely, brings more uniformity to Medicaid eligibility and coverage rules.

But will there be benefits to providers? Illinois Medicaid providers current wait up to 6 to 12 months to get reimbursed for their services—and often never get reimbursed at all.  There likely will be improvement in this claims processing, but it remains to be seen. The Michigan system is able to verify provider eligibility within 24 hours, saving providers paperwork and waiting time and better allowing them to budget their operations. Claims are processed much more quickly as well.  However, it’s not clear how much of Illinois’s Medicaid reimbursement problems are due to inefficiency and bureaucracy, and how much is due to its choking budget deficit. The governor’s office and the comptroller’s office makes decisions on who to pay its bills to first, and Illinois hospitals and physicians have often been left on the lower rungs of priority.

As a result of this poor payment and inefficiency, a major criticism of the ACA and its Medicaid expansion provision is whether will be enough doctors and other providers to serve the nearly 600,000 newly eligible Illinoisans. Information management may not seem like the answer to this question. However, a smoothly running claims processing system, saving taxpayer money, may incentivize providers to stick with Medicaid, and not drop patients as many physicians have threatened may happen.  In truth, it’s not clear at all that Illinois providers are dropping Medicaid. According to DHFS, at the end of fiscal year 2012, a total of 73,580 providers were enrolled with Medicaid, which is an increase of 7,634 providers over fiscal year 2011 year-end.

Medicaid expansion has brought many cheers and many anxieties alike. To address the latter, Illinois has been actively taking on many reforms aimed at saving money, running the program more efficiently, expanding provider capacity, and incentivizing higher quality services in coordination and chronic disease management. With the upgrade in information management system, we see one more effort at seriously making health care reform work in Illinois.

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