SPRINGFIELD, Ill. (WCIA) — For the first time in a decade, and the second time ever, the Illinois Department of Central Management Services (CMS) is in the bidding process to select a handful of health insurance plans for retired state workers enrolled in Illinois’ Medicare Advantage program. The new contracts — CMS expects to finalize by October open enrollment — are under consideration at a time when seniors enrolled in an existing plan through Aetna lost access to their doctors, and are delaying critical care and seeing unexpected medical bills.

That snowballed when Carle Health and Aetna Medicare terminated a contract, leaving patients with little to no doctor options in an area chock-full of healthcare facilities.

CMS doesn’t get involved when contracts are terminated, according to deputy director of communications Cathy Kwiatkowski. Aetna — a company the state pays to offer adequate, affordable healthcare — wasn’t required to notify CMS when its customers lost access to Carle’s eastern-central Illinois doctors and a number of Christie Clinic providers.

“The contractual decisions are between the provider and the health plan. They are not required to inform CMS,” Kwiatkowski said in an email statement.

State retirees have two plan options that vary by county. Those options are Aetna Medicare HMO and a more expensive United Healthcare PPO plan for the majority of central Illinois, including Champaign and several surrounding counties where there’s a concentration of people retired from the state because of the University of Illinois.

A 2022 map of TRAIL MAPD plans

Retired housing division supervisor Melody McDaniel said she’s likely to switch off of her Aetna Medicare plan in October. She said if the options remain unchanged, “in my opinion, it kind of creates a monopoly.”

Nearly 8,000 retirees are enrolled in Aetna Medicare through the Total Retiree Advantage Illinois Medicare Advantage Prescription Drug Program (TRAIL MAPD). The timing of the proposal process is unrelated, state statute limits the total term of any contract to ten years.

CMS has paid Aetna and a few other companies $13.5 billion since 2018 to provide access to healthcare for both state employees and retirees. It’s funded by Illinois taxpayers. Roughly $3 billion dollars from the Health Insurance Reserve Fund (HIRF) are spent on these plans each year. HIRF is two-thirds direct taxpayer dollars, the rest is subtracted from state employee paychecks.

Sen. Chapin Rose (R-Mahomet) said he and a group of bipartisan state lawmakers had concerns and were left with unanswered questions about how the money is being used back in 2013, during CMS’s initial MAPD bidding process. He also predicted that health care access would shrink for seniors.

“I put this at the feet of the state,” echoed Champaign County Health Care Consumers Executive Director Claudia Lenhoff.

“They should make sure that they contract with qualified insurers who can provide the best coverage possible. And that means coverage that extends to both Carle and Christie, because they are the major providers in this community.”

Nearly a dozen patients interviewed over the course of this reporting expected CMS to hold a regulatory role over the plans it administers.

“They should be monitoring the whole issue with in-network doctors that there are, you know, clearly enough available,” said Urbana state retiree and Aetna Medicare customer Russ Jacobson, 71.

“And it seems like that’s kind of marginal, that that really is true.”

That’s the federal government’s responsibility, according to CMS, because they write the network adequacy rules that govern Medicare and Medicaid. A quarterly review of the networks — that should show if a plan is offering access to at least the minimum number of doctors required by law — is “provided to CMS by the plans, according to Kwiatkowski. But when reporters sent a Freedom of Information Act (FOIA) request to the department to obtain copies of those latest reviews, CMS representatives said they had “no documents responsive to [the] request.”

When pressed about why the agency would not retain those records, reporters were told all of those interactions are handled through an online system run by the U.S. Centers for Medicare and Medicaid, and there “are no documents in [state CMS’s] possession.”

“What qualifies as an adequate network might be a federal regulation, but let’s don’t let the state of Illinois CMS off the hook because they’re the ones who paid for this contract,” Sen. Rose reacted.

“Aetna works for the state of Illinois, not the federal government, and state CMS ought to be doing their job and help these people.”

Jacobson, who worked at the Illinois Geological Survey for 34 years, is considering dropping his state health insurance benefits altogether.

“I’m not real thrilled with Central Management,” he said.

He — like every other Aetna customer reporters sat down with — would instead prefer to have a health insurance plan with Health Alliance. The Urbana-based insurance company covers access to the three largest local providers: Carle Health, Christie Clinic and OSF HealthCare.

“I’ve seriously started looking at Health Alliance,” Jacobson shared. “Much easier to talk to.”

“I keep bringing up you know, Health Alliance because it just works so nicely and seamlessly,” Lenhoff said.

Even so, she cautioned patients against leaving retirement benefits behind, “because typically, the rules are that once you opt out, you can never get back in.”

CMS did not respond to a question of whether that is true of state retiree benefits.

Jacobson said he would consider dropping the program regardless.

State retirees in Champaign and surrounding counties enrolled in Health Alliance through state plans for decades during their working years and some, into their retirement. That is, up until eight years ago when the state decided to create a new, separate program for retirees.

TRAIL MAPD was launched on January 1, 2014.

“So that’s where this whole thing started,” Sen. Rose explained.

He was a member of the Illinois General Assembly’s Commission on Government Forecasting and Accountability (COGFA) at the time. The 12 member panel advises lawmakers on how to spend the state’s tax dollars. They are also responsible for monitoring the insurance program for state employees.

“It was bad, right, it was the great recession,” Rose recalled.

The state employees union, AFSCME, was sparring with the state for pay raises. In early 2013, after about 15 months of negotiations, a contract was signed by then-Gov. Pat Quinn’s office, including increased wages.

“And they paid for it by bringing in Medicare Advantage TRAIL to save on health care costs,” Rose said.

CMS explained the decision to create the program in a similar fashion. “These plans (TRAIL/MAPD) were implemented in order to save on insurance costs to the programs and retirees and satisfy an agreement reached with the American Federation of State County and Municipal Employees (AFSCME),” Kwiatkowski said in an email.

By the summer of 2013, CMS started considering proposals from insurance companies, ultimately choosing three companies to split coverage by counties. The state agency ranked Aetna as the top-scoring insurer and denied Health Alliance a contract.

According to CMS, Health Alliance “did not meet minimum requirements to be considered a possible vendor.”

“Well, that’s interesting, because the vendors that they picked didn’t actually have providers in downstate counties that they were given the contract to. But Health Alliance did,” Rose said.

“So exactly what criteria were they talking about?”

Democratic State Treasurer Mike Frerichs — who was a COGFA co-chair back then — said Health Alliance did not meet some requirements but said that the score sheet CMS used was ‘arbitrary’. Health Alliance also expected a chance to negotiate further, according to Frerichs, who says that was common practice at the time. That didn’t happen, he said.

Health Alliance was ultimately added to the program a year later to fill in gaps in coverage, but that was based on a different set of standards and the company was left out of central Illinois, including Champaign County where it’s based.

“There was a lot of outcry in the community at the time, because people were afraid of exactly a situation like this,” Lenhoff said.

“But it seemed like a fairly bizarre situation. There was no clarity on why the Health Alliance bid was denied or rejected.”

That was the second blow to the insurer in two years. When Health Alliance lost a state employee contract in 2011, it sued. And in 2012, then-Illinois Auditor General William Holland wrote a scathing report that found, in part, the Department of Healthcare and Family Services was not upfront about scoring criteria and “failed to ensure that all members of the evaluation team had all needed materials to score the proposals.”

State officials also hired New York-based consulting firm Mercer to help in the bidding process even though the firm was in business with every insurance company proposed to the state,” the report reads.

“You follow the lineage down to today. And I just don’t see that much has changed with CMS,” Rose said.

The same audit showed Blue Cross Blue Shield of Illinois had zero primary care doctors in 24 counties where its plan was contracted. Aetna Medicare’s network told a similar story this April when reporters called through its primary care directory. The insurer did not have a single primary care doctor available to see seniors in at least 25 of the 47 counties where its plan is offered.

Rose said the rules of the bidding process have been altered in the last decade, “to have the contracts have to be, you know, signed off on by the legislature as well. So that is sort of an added check that didn’t exist at the time.”

Once the contracts are signed, COGFA’s role in the process is done.

“That’s how that works,” Rose said.

“The legislature sets policies and chief executives, you know, are supposed to go out there and make it work.”

“Right now we’re just experiencing the worst of all worlds,” Lenhoff concluded. “It’s, you know, some big national insurer who just doesn’t have the network capability. And in my mind, their bid should not have been approved, at least not for this area.”

It’s unclear whether Aetna will still be an option come open enrollment in October. The bidding process to pick health insurance plans for state retirees is ongoing, according to an email from Kwiatkowski Thursday.

She couldn’t answer questions about the process and which companies are being considered, nor could those records be released in a FOIA request. Kwiatkowski says the goal is to have those contracts finalized for October open enrollment.

Health Alliance representatives wouldn’t comment on whether the company applied for a contract this time around.

Medicare Advantage: A bird’s eye view

Concerns over Medicare Advantage plans — formerly known as Medicare Part C — go far beyond one company and far beyond Illinois.

The government — state and federal — pays insurance companies a fixed monthly rate to provide these plans, but the companies only pay out when a patient goes to the doctor, so there’s a potential incentive for them to deny patients access to services or refuse to pay claims in order to increase profits.

The U.S. Office of the Inspector General released a report this year that showed, collectively, companies issue millions of denials each year in relation to Medicare Advantage plans.

Out of a random sample, the report found nearly 1 in 5 claims that should have been paid were denied.

Reworking the rules

Change is coming in tighter federal regulations meant to protect patients from losing affordable access to healthcare in 2023.

U.S. CMS and the Department of Health and Human Services (HHS) amended network adequacy rules to require companies applying to provide Medicare Advantage plans “to demonstrate that they meet the network adequacy standards for the pending service area as part of the MA application process for new and expanding service areas,” which, in theory, means Aetna and other insurers will be required to show proof of primary care doctors in every county its plan would be offered.

The existing rules require a certain number of providers in an area based on the number of enrollees there and the size of a city/town. The updated rules expand the provider types to be regulated.

What’s not addressed is continuity of care. Even if alternative doctors are available when patients lose access to the one they’re used to, it can be burdensome to make a switch, especially in the middle of acute care. State law addresses this, allowing cancer patients, pregnant mothers in their third trimester, and others to continue care with their existing doctor at an in-network rate through the duration of their treatment. (In the case of pregnant women, care should be provided through post-partum.)