Dive Brief:

• Illinois is charging that Blue Cross and Blue Shield of Illinois isn't meeting access standards for members of its Medicaid managed care network, Chicago Tribune reported.

• The Illinois Department of Healthcare and Family Services has sanctioned the payer, which includes not automatically enrolling members into Blue Cross plans, not allowing newly enrolled members into those plans and fining the insurer $150,000.

• The state requires Medicaid payers to provide a level of access for doctors, hospitals and specialists. This includes making sure members have access to a nearby provider and get seen within a certain amount of time.

Dive Insight:

It's a blow for Blue Cross and Blue Shield of Illinois, which has the largest population in the state's 1.7 million-member Medicaid program with more than 432,000 members. Meridian Health Plan is a close second.

Gov. Bruce Rauner, a Republican, revamped the Medicaid managed care program, HealthChoice Illinois, in January. Rauner wants to increase Medicaid managed care membership. HealthChoice Illinois hopes to cover 80% of Medicaid beneficiaries, with the rest getting coverage through traditional Medicaid fee-for-service.

HealthChoice Illinois also reduced the number of payers in the program. All counties have the same five health plans except for Cook County, which has seven plans.

States are increasingly turning to private payers to offer Medicaid managed care programs. By working with private payers, states hope to reduce program costs, while also improving quality and outcomes. More the 74 million Medicaid beneficiaries were in a managed care plan in 2015, according to the Kaiser Family Foundation. That was 80% of Medicaid's enrollment, including many states at more than 90% enrollment in a managed care plan.

Payers view Medicaid managed care as another growth opportunity. Participating insurers vary from companies like Centene, which specializes in the Medicaid population and has more than 7 million Medicaid managed care members, to UnitedHealthcare, the nation's largest payer in overall membership. During its earnings call this week, UnitedHealthcare said it gained almost 500,000 Medicaid members over the past year.  

States are also getting creative with Medicaid managed care. Massachusetts launched a managed care accountable care organization in March. The ACOs are financially accountable for cost, quality and member experience for more than 850,000 MassHealth members.

The federal government is providing $1.8 billion to restructure MassHealth via a five-year 1115 Medicaid waiver. ACOs will receive more than $100 million in new investments this year to support the change to value-based care.