New Illinois bill to encourage competition in healthcare medical supplies

Published On September 20, 2018 | By William Thomas | Health

In Illinois healthcare news, a bill designed to discourage monopolies in the medical supply industry has been introduced in the Illinois General Assembly.

House Bill 5930 is meant to address concerns about this year’s reimbursement cuts of 10 percent to 50 percent to companies that supply medical equipment for Medicaid patients.

Rep. David McSweeney, who introduced the legislation, fears that the funding cuts could potentially lead to monopoly. If passed, the bill would require “minimum quality standards” for medical supplies and equipment companies.

In addition, MCOs are prohibited from signing “sole-source” contracts with providers of durable medical goods and from paying them less than 10 percent below Medicaid “fee-for-service” rates. This way, medical suppliers would continue doing business with the state’s affiliated programs.

These funding cuts are a part of Gov. Bruce Rauner’s restructuring of Medicaid managed care.

The new Medicaid Managed Care Program, named “HealthChoice Illinois,” took effect on January 1 and was expanded to all 102 Illinois counties.

The program is expected to lead to annual savings of $200 million to $300 million, according to Illinois Department of Healthcare and Family Services estimations.

However there is little evidence that the reboot is saving money in the the long term. A report from the Illinois Auditor General shows that the Rauner administration failed to track down over $7 billion of taxpayer dollars in payments made to and by MCOs.

In 2016, durable medical equipment accounted for about $101 million, or one-half of 1 percent, of Illinois’ $20 billion-plus Medicaid program. Medical devices such as portable oxygen, feeding tubes and ventilators can make the difference between life and death, especially for ‘medically fragile’ children.  

“While some believe the state should have no role in assisting businesses, it’s different when we are talking about life saving equipment for young children,” said Sen. David Koehler of Peoria.

Last year, Koehler made a legislative proposal similar to McSweeney’s, but his bill failed to advance in the General Assembly. Medical equipment and the legislation surrounding it is such a hot topic largely because technology is what fuels innovation in healthcare.

Overall, the health tech industry is booming and healthcare startups are turning a new leaf in attracting new funds in 2018. According to Healthcare Weekly, the top ten healthcare technology startups have received a staggering $1.7 billion dollars in funding over the last year.

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