State approves Chicago providers for Medicaid cost-saving initiative

Five Chicago healthcare groups received preliminary approval for a new initiative to reduce Medicaid costs, according to Crain's Chicago Business.

Advocate Health Care, Loyola University Health System, Presence Health and Access Community Health Network--as well as a joint effort by Swedish Covenant Hospital, Norwegian American Hospital and Mercy Hospital & Medical Center--plan to launch an accountable care entity (ACE) by July 1, according to the article.

Under an ACE, "providers manage the care of a group of Medicaid patients and eventually will have to assume the financial responsibility for all treatment within a fixed amount of money per patient," according to the article.

The state rejected three other local ACEs for preliminary approval, according to the article, although a spokesperson for the Illinois Department of Healthcare and Family Services said the department wants to collaborate with them to try again. "We see potential, but obviously before we finalize any deal and send any patients to them we want more detail," the spokesperson told Crain's.

For example, the state sent Alexian Brothers Health System a letter questioning the system's capacity to care for 40,000 Medicaid patients, the lowest allowed amount for an ACE in Cook County.

"None of the issues are things that are issues that would stop our interest or stop the state's interest in having us be an ACE participant," Don Franke, Alexian's vice president for physician integration, told Crain's. "I think we just need to further clarify for their review what our intentions are."

The state also requested more information from providers it approved for ACEs. For instance, it wants more information about how separate hospitals plan to coordinate care, according to Swedish Covenant Hospital CEO Mark Newton. "The partnership that we've pulled together is substantial, and it signals that there's a deep commitment to continuing to serve the patients that we have been serving with a new model of care," Newton told Crain's.

The number of Medicaid patients in Illinois is expected to climb from 2.7 million to 3 million over the next few years, FierceHealthcare previously reported.

To learn more:
- read the Crain's article