Illinois Expands Use of Advanced Technology to Help Reduce Medicaid Costs, Implement Structural Changes in Program

July 17, 2012
  • Technology will help support State’s plan to achieve more than $1 billion in reductions and efficiencies to improve fiscal footing of program
  • Contract with Optum will help State make data-driven decisions about policies and spending, provide analytics for improved outcomes, reforms, care- coordination efforts

The State of Illinois will expand its use of advanced technology to manage Medicaid and human services functions to reduce costs, improve outcomes and help implement structural changes for the program that provides health benefits to 2.7 million low-income Illinois residents.

The Illinois Department of Healthcare and Family Services (HFS) has awarded a contract to one of its longstanding vendor partners, Optum, for an expanded enterprise data warehouse that will enable HFS to conduct advanced analytics and make data-driven decisions about health care policies and spending. The sophisticated business intelligence technology will be an important tool in the State’s efforts to achieve some $1.3 billion in cost reductions and efficiencies enacted by the administration of Gov. Pat Quinn and the General Assembly to address the significant fiscal and operational challenges Illinois faces in its $14 billion Medicaid program.
This contract will enable HFS to fully integrate technology and analytics into virtually all of its processes to improve care delivery, reduce costs, monitor programs and measure progress.

Optum has partnered with HFS since 1999 to manage an existing data warehouse, which supports several aspects of the State’s Medicaid program, including: analyzing claims to identify and eventually recover millions of dollars in improper Medicaid overpayments; developing analytics for the State’s innovative Physician Bonus program; and analyzing data to identify women of childbearing age who are most at risk of potential adverse birth outcomes.

Under the new technology contract with Optum, HFS will use the enterprise data warehouse’s enhanced capabilities in the following additional ways:

  • Care Coordination Projects: The Illinois Legislature has mandated that HFS must transition at least 50 percent of its Medicaid program into Coordinated Care Networks (CCN) by 2015, as the State seeks to redesign its health care delivery system to one that is more patient-centered, with a focus on improved health outcomes, reduced costs, enhanced patient access and patient safety. The enterprise data warehouse will help HFS develop appropriate models for CCN implementation and measure and monitor these programs according to performance metrics and health care outcome targets that HFS establishes. One area will include developing and analyzing the pay-for-performance measures developed by HFS for companies providing care for beneficiaries of the State’s Integrated Care Delivery System, designed for senior citizens and persons with disabilities. Another will be Gov. Quinn’s priority to transition people with developmental disabilities and mental health challenges from costly institutions to more cost-effective community settings.
  • Hospital and Long-Term Care Rate Reform: HFS is in the midst of an important initiative to restructure and modernize the payment methodology for inpatient and outpatient hospital and long-term care. The enterprise data warehouse will support this effort, including providing measurements and benchmarks for outcomes-based budgeting; providing the analytics that will promote more predictable and transparent pricing and reimbursement for care providers, and more efficient care for high-cost beneficiaries; and assisting HFS in implementing a system that recognizes and rewards quality health outcomes and efficiency.
  • Health Care Reform: Illinois may potentially add hundreds of thousands of eligible people to its Medicaid program due to health care reform. Careful analysis of these new enrollees’ medical histories will enable HFS to develop evidence-based, preventive care strategies that can help limit the instances of major health events or potentially catastrophic outcomes.

    The State expects to realize millions of dollars in financial benefits from the enterprise data warehouse in the first year of operation alone.

    “We recognize that, like many states, Illinois faces difficult challenges in its Medicaid program, and we believe that our technology and analytic capabilities can help Gov. Quinn and HFS make important strides in reducing program costs for taxpayers and improving outcomes for beneficiaries,” said Shelby Solomon, president, Government Solutions, Optum.

    About Illinois HFS
    The Illinois Department of Healthcare and Family Services (HFS) is the state agency dedicated to improving the lives of Illinois families through healthcare coverage and child support services. Its mission is to empower Illinois residents to lead healthier and more independent lives by providing adequate access to healthcare coverage at a reasonable cost, and by establishing and enforcing child support obligations.

    About Optum
    Optum ( is a leading information and technology-enabled health services business dedicated to helping make the health system work better for everyone. Optum comprises three companies – OptumHealth, OptumInsight and OptumRx – representing more than 35,000 employees worldwide who collaborate to deliver integrated, intelligent solutions that work to modernize the health system and improve overall population health. 

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