Health Alliance will discontinue Medicaid-only coverage at end of 2016

On July 1, Health Alliance notified the Illinois Department of Healthcare and Family Services (HFS) of its intent to discontinue Medicaid-only managed care contracts effective December 31, 2016.

“To best serve the community and employees, our goal during this transition is minimal disruption — getting people the information they need to maintain quality care,” said CEO James C. Leonard, MD. “This exit comes after months of analysis and careful consideration of the impact to the business, our employees and our members.”

Beginning in 2017, Health Alliance will no longer offer coverage under the Integrated Care Program for Seniors and Persons with Disabilities (ICP/SPD), Family Health Plan (FHP) coverage and coverage for adults eligible for Medicaid under the Affordable Care Act. Health Alliance Medicare will continue to cover members on the Dual-Eligible Special Needs Plan (DSNP) for those eligible for both Medicare and Medicaid.

Medicaid members will continue to have access to their Carle providers after termination of the contracts. Affected members will receive information about their options in the coming months.

Leaders met with staff today, explaining this decision as part of the challenges of Medicaid, thanking them for helping members now and through the end of the year, and outlining plans to ensure employment options at Health Alliance and Carle health system to meet members’ and patients’ ever-increasing healthcare needs.

“We pledge to offer continued employment options for all staff affected by these changes. We are working through how to pair team members with the right job opportunities, and we will present options for every affected employee in the weeks and months ahead,” Dr. Leonard said.

The state-required 180-day notice for contract termination gives the parties time to evaluate needs and appropriately respond. In early June, Health Alliance communicated with HFS and affected employees its plans to discontinue this line of business.

Serving members for more than 35 years, Health Alliance entered the Medicaid Managed Care market following enactment of the Affordable Care Act.

“Financial losses from the Medicaid managed care business line are not sustainable, and we expect no significant change in the situation coming from government or our efforts. We made this difficult decision after extensive review and analysis of available resources, the State’s confirmation of further rate reductions, and our ability to deliver the level of care management this population requires,” Dr. Leonard said.

“This kind of evolution is essential in this ever-changing regulatory and reimbursement environment.”