Measure includes new penalties for fraudulent claims, tightens eligibility requirements

State Rep. Jehan Gordon (D-Peoria) is lauding a new law to reform the state’s Medicaid system to help rein in costs and improve patient care.

“Since taking office, I have been worked hard to cut wasteful spending from our budget,” Gordon said. “These necessary reforms to our Medicaid system ensure that our most vulnerable get the treatment they deserve, while cutting out the inefficiencies that have plagued the system.”

According to the Department of Healthcare and Family Services, the new law will conservatively result in an estimated savings of $774 million over the next five years by combining limits on the eligibility of the Medicaid program with more aggressive pursuits of Medicaid fraud and abuse.

House Bill 5420 requires a two-year moratorium on the expansion of eligibility for the Medicaid program that would come through increasing income eligibility standards, unless required by federal law. Furthermore, automatic renewal of Medicaid enrollment will end and enrollees will be required to prove eligibility on an annual basis and provide better documentation of their incomes. Another provision in the pursuit for greater fiscal responsibility, the law phases out the practice of paying Medicaid bills from one budget year with revenue from the following budget year.

The law also requires the state to enroll at least half of all Medicaid recipients in managed-care programs within four years, pays managed-care providers based on performance related to health care outcomes, requires the use of evidence-based best practices and the deployment of electronic medical records. In addition, the state would get more aggressive with Medicaid fraud by allowing civil penalties of up to $2,000 per fraudulent claim, including five percent interest to be charged per year and repayment of fraudulent claims.

“When we all work together, real reforms like this can occur,” Gordon said. “By streamlining services and increasing our accountability to both taxpayers and service providers, we are ensuring that people receive the best treatment possible, while saving the taxpayers money. The vital reforms will help eradicate fraud and waste in the Medicaid system to free up money and help to pay down our $15 billion deficit.”

For more information on this or any of Rep. Gordon’s legislation, please contact her constituent services office at (309) 681-1992.