Suffredin- Changing County Government  
 

Accountability
Forest Preserves
Public Safety
Cook County Budget
Forest Pres. Budget
Property Tax Appeal
Health & Hospitals
Land Bank Authority
Policy Resolutions
Unsung Heroine

 

   
 
   
   
 
   
     
  Office phone numbers:  
   
 
 

Search current and proposed Cook County Legislation in Larry's exclusive legislative library.

   
 

The Cook County Code of Ordinances are the current laws of Cook County.

   
  The Chicago Board of Trade and the Chicago Mercantile Exchange trade 60% of the world futures contracts.
   
     
     
     



Why one of the biggest Medicaid insurers in Illinois is on life support

Thursday, April 06, 2017
Crain's Chicago Business
by Kristin Schorsch

Why one of the biggest Medicaid insurers in Illinois is on life support

CommentsEmailPrint
Bloomberg
Photo by Bloomberg

The board chairman

 

 

 

 

 

 

 

 

 

 

 

 

The board chairman of one of the largest private Medicaid health plans in Illinois fears the Rauner administration is locking the nonprofit out of a lucrative state contract.

If so, the health plan, Chicago-based Family Health Network, likely will dissolve, forcing its more than 200,000 members to find health insurance and doctors alike elsewhere, said Jose Sanchez. He's board chairman of the plan, known as FHN, and CEO of Norwegian American Hospital, one of five hospitals that founded the plan 22 years ago.

A group of state lawmakers are taking it one step further, suggesting in a letter to Illinois Gov. Bruce Rauner that the hospitals would close without revenue generated from the health plan. Many of the facilities are anchors of impoverished neighborhoods.

"The healthcare delivery infrastructure for Latino and African-American communities are in grave danger of collapse," the lawmakers wrote in the March 28 letter to Rauner.

"We understand the need for more cost certainty in the Medicaid program," the letter continued. "We fear that the needs of the poor in Cook County, especially in the minority community, are not being adequately considered when policy decisions are being made."

'HEALTH CRISIS'

As the Rauner administration overhauls a main Medicaid program, the state lawmakers alleged that FHN is being excluded from vying for a new contract that would begin Jan. 1. FHN's exclusion would create a "health crisis" for the plan's members and an economic one for communities "from the closing of these hospitals …" the letter said. Medicaid revenue makes up the bulk of FHN's total revenue.

State senators Mattie Hunter and Martin Sandoval and state representatives Fred Crespo and Art Turner authored the letter. In an interview, Hunter elaborated that moving FHN members to a new health plan would be disruptive, and it's not clear what would happen to the health plan's employees.

Felicia Norwood, director of the Illinois Department of Healthcare and Family Services, which oversees the Medicaid health insurance program for the poor and disabled, said the bidding process for the new contract was designed to be in the best interest of the state and of the beneficiaries who would be receiving medical services.

"We didn't design anything to be specific for FHN or to exclude FHN," Norwood said.

The fate of FHN underscores the plight health plans face asthe Rauner administration revamps the Medicaid managed care programto squeeze out savings. Health care is a huge piece of the state budget, making up about 57 percent of the proposed 2018 financial roadmap. (Thestate hasn't had a budget for two yearsas Rauner and the state Legislature lock horns.)

About 2 million people, or 65 percent of all Medicaid enrollees in Illinois, are in managed care. In the program, the state contracts with 12 insurers, including FHN, with the goal of saving money by focusing on prevention for Medicaid recipients.

Rauner wants these insurers to do better. In February, he announced that he'srebidding the managed care program, giving FHN and rivals a chance to compete for an estimated $15 billion in contracts.

There will be losers. Only four to seven insurers will be awarded contracts. Far more appear to be interested. Nearly 30 carriers attended a mandatory meeting last month for potential bidders, including Blue Cross & Blue Shield of Illinois and national carriers UnitedHealthcare, Aetna and Cigna, state records show.

LACK OF RESOURCES

Besides Norwegian American Hospital in Humboldt Park, FHN also is owned by St. Bernard Hospital in Englewood, Sinai Health System in Lawndale, St. Anthony Hospital (down the block from Sinai), and Loop-based Presence Health, the largest Catholic hospital network in Illinois.

?Here's why Sanchez thinks FHN could collapse. In the new managed care program, insurers must provide access to patients statewide. To operate in Cook County only, the insurer must either be owned by a government entity, like the Cook County Health and Hospital System's CountyCare Medicaid program, or be minority-owned.

FHN doesn't have the financial resources to go statewide, and it's neither minority or government owned, Sanchez said. He wants the state to exempt FHN from having to re-bid. Norwood said that's not possible.

"At the end of the day, we understand our own limitations," Sanchez said when explaining why FHN would not be able to operate statewide. "We don't have the personnel. We don't have the experience. We don't have the capital. … The state is really forcing us to dissolve."

FHN grew rapidly as the managed care program expanded in Illinois, and more people qualified for Medicaid under the Affordable Care Act. Take the last few years. Revenue grew four-fold from 2013-2015, totaling $588 million as of Dec. 31, 2015, according to tax returns.

As membership swelled, FHN sought an investment partner. Sanchez said FHN was in talks with Delaware Life, which likely was going to infuse more than $150 million into the health plan for a 60 percent ownership stake. The potential deal ended when the state revealed its new terms for managed care companies, and Delaware Life realized that FHN likely wouldn't be a player, Sanchez said.

A spokesperson for Delaware Life did not return a message to comment.

FHN also is going through a management shuffle. In February, Keith Kudla, FHN's CEO for seven years, resigned. He confirmed his resignation, but declined further comment.

Representatives of FHN's other hospital owners either referred questions to Sanchez or did not provide comment.



Recent Headlines

Cook County Commissioner Robert Steele dies
Tuesday, June 20, 2017
Chicago Tribune

10 reasons Cook County must rethink the sweetened beverage tax
Friday, June 16, 2017
Chicago Tribune

2 Cook County Jail inmates charged in sex assault of female detainee in court lockup
Friday, June 16, 2017
WLS ABC Channel 7 Chicago

Why it's foolish not to appeal your property tax assessment
Friday, June 16, 2017
Chicago Tribune

OPINION: Kennedy making a convincing case for ‘radical’ property-tax ideas
Friday, June 16, 2017
Chicago Sun-Times

Elgin wants state, feds to raise minimum wage to 'a living wage'
Thursday, June 15, 2017
Chicago Tribune

How property tax assessments in Cook County favor the rich
Thursday, June 15, 2017
Chicago Sun-Times

Cook County to stop prosecuting some traffic offenses because it lacks resources, Foxx's office says
Thursday, June 15, 2017
Chicago Tribune

2016 Cook County property tax rates: Look up your town, estimate your bill
Thursday, June 15, 2017
Chicago Tribune

Sand Ridge Nature Center to host annual Juneteenth Celebration
Tuesday, June 13, 2017
Special to suffredin.org

Road projects mark Winnetka, Wilmette landscapes this summer
Tuesday, June 13, 2017
Chicago Tribune

Competence at the assessor's office: Too much to ask?
Tuesday, June 13, 2017
Chicago Tribune

Joseph Berrios: Cook County Assessments ‘Fair and Accurate’
Tuesday, June 13, 2017
WWT Chicago Tonight

County assessor responds to claims of unfair property values assessment
Tuesday, June 13, 2017
WLS Chicago

The High Costs for Out of School and Jobless Youth in Chicago and Cook County
Monday, June 12, 2017
The Great Cities Institute of UIC

Bombshell report from Alvarez office explodes case against 'innocence industry'
Monday, June 12, 2017
Chicago Tribune

Bail reform in Cook County gains momentum
Monday, June 12, 2017
Chicago Tribune

Kim Foxx: Low-risk defendants should go free before trial
Monday, June 12, 2017
Chicago Sun-Times

Glenview Trustees Vote To Opt Out of Minimum Wage Increase
Monday, June 12, 2017
Glenview Patch

Cook County Jail exits federal oversight of more than 40 years
Monday, June 12, 2017
Chicago Tribune

all news items

Paid for by Larry Suffredin and not at taxpayer expense. A Haymarket Production.
^ TOP