When it comes to uncompensated care, Cook County Health and Hospitals System, a public health system based in Chicago, feels the sting more than most.
"We're giving $500 million to $600 million away in uncompensated care each year," says Ramanathan Raju, MD, CEO of CCHHS. The nation's third-largest county-owned health system serves as a safety-net medical provider for Cook County's 5 million residents. Sixty percent of its inpatients are uninsured; the same is true for 85 percent of its outpatients. Furthermore, even many of CCHHS' poorest patients used to not qualify for Medicaid under Illinois' strict eligibility requirements, which limit adult coverage to the disabled, elderly and parents.
For the few who did qualify, a state-federal agreement allowed CMS to pay its half of Medicaid bills, while the state made a lump sum payment similar to a block grant each year, requiring CCHHS to operate under a de facto capitated model for many of its Medicaid and uninsured patients. However, state budget problems have threatened that block payment in recent years, Dr. Raju says, shrinking from more than $400 million a few years ago to $253 million this year.
That challenging payer make-up in what Dr. Raju calls "an iconic system" led state and federal policymakers to name Cook County one of several areas nationwide to pilot a Medicaid expansion beginning in October 2012, six months before the 26 confirmed states — including Illinois — launch their own next year.
The pilot, dubbed "CountyCare," broadens Medicaid eligibility for Cook County residents to all residents in households earning at or below 138 percent of the federal poverty line. Under a provision of the Patient Protection and Affordable Care Act, the federal government will fully fund coverage for the newly eligible until 2017, tapering off to not less than 90 percent in 2020 and beyond. Thanks to the CountyCare pilot, CCHHS has already begun receiving that federal funding through capitated payment for enrolled Cook County residents, many of whom the system previously received no direct reimbursement for.
In June, under the pilot, the per member per month gross capitated revenue totaled $13.6 million. Cook County receives half of those payments, with the other half being distributed to other safety-net providers in the county. Therefore, CCHHS netted $6.8 million that month in revenue through the CountyCare pilot. Prior to last October, CCHHS was forced to treat nearly all of those patients without compensation, because they did not qualify for Medicaid under its previous, stricter eligibility requirements.
Piloting the expansion benefits all parties involved, according to Dr. Raju. HHS can gather data and learn best practices for educating and enrolling the newly eligible Americans in Medicare, a challenging and critical lynchpin of the PPACA's effectiveness. The additional capitated revenue CCHHS receives has allowed it to invest and convert its 18 outpatient clinics into patient-centered medical homes to provide team-based care and wraparound social services for patients. Patients and government payers benefit because increasing access to affordable, comprehensive care sooner means patients who have or are at risk for chronic illnesses, such as diabetes, are able to manage their conditions and help prevent them from worsening, costing significantly less in the long-run, Dr. Raju says.
Since the program took effect last fall, he says the system has been "in better shape because with the same [patient] volume, and [CCHHS] gets twice the money."
After the pilot year is completed, Dr. Raju says he hopes policymakers will work with CCHHS to convert CountyCare into a permanent low-cost managed care health plan, even after Illinois expands its Medicaid program next year to low-income childless adults and other newly eligible populations.
Dr. Raju, formerly the executive vice president of medical and professional affairs at New York City Health and Hospitals Corp., the largest public health system in the country, says the problems in urban healthcare are the same nationwide: disproportionately high levels of mental illness, substance abuse and social issues complicated by frequent language differences. Although the New York system is five times larger than CCHHS, Dr. Raju says his current role is inspiring.
"We have the opportunity to help a lot of people by offering quality care and making them healthier, and at the same time stabilize the healthcare system, which is in deep financial trouble," he says. "I look at this time in the healthcare industry as challenging and exciting, and this is a once-in-a-lifetime chance to make things right."
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