IL SR2014

Illinois General Assembly transitioned Medicaid from fee-for-service to managed care in 2011 to save money and coordinate care, but neither objective has been achieved.

Managed care organizations (MCOs) have denied significant numbers of Medicaid claims, resulting in harm to providers and billions of state funds being retained by MCOs rather than passed to providers.

The average MCO denial rate for safety-net hospitals is 20%, causing layoffs in high-unemployment areas and threatening healthcare services in vulnerable communities across Illinois.

Directs the Auditor General to conduct an audit comparing denial rates in fee-for-service and managed care programs, with at least 50% of the audit focusing on safety-net and critical access hospitals.

Recommends the General Assembly consider sun-setting the managed care program if the audit concludes MCO denial rates are 10% or more higher than fee-for-service program rates.