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New bill aims to encourage competition in medical supply industry

SPRINGFIELD (Illinois News Network) — A bill designed to discourage monopolies in the medical supply industry is making its way through the Illinois General Assembly.

House Bill 5930, introduced by Rep. David McSweeney, R-Barrington Hills, and co-sponsored by Rep. Gregory Harris, D-Chicago, would eliminate payment cuts to companies that supply medical equipment for Medicaid patients.

One of the reasons for the bill was this year’s reimbursement cuts of 10 percent to 50 percent to medical supply companies, McSweeney said.

“Specifically, this bill is designed to save the state of Illinois money in the long term, and to make sure that we have competition in the system,” he said. “What it would do is prohibit sole-source contracts for medical supply equipment from managed-care organizations.”

The proposal would also require minimum payments to medical suppliers so that they continue doing business with the state’s affiliated programs.

This bill would benefit patients by setting minimum standards for medical equipment to ensure quality remains a priority, McSweeney said.

On Jan. 1, Gov. Rauner’s restructuring of Medicaid managed care – HealthChoice Illinois – took effect in a number of the urban areas across the state. It was then expanded to every county in the state.

According to the Illinois Department of Healthcare and Family Services, the reboot is projected to save $200 million to $300 million each year, with total savings amounting to $1 billion over the course of the four-year contract. This would impact 2.7 million of the 3.14 million Medicaid recipients in Illinois, which translates to 80 percent, according to the department.

McSweeney said there is no proof that the reboot will benefit the state.

“There is absolutely no evidence that it is going to save money,” he said. “There has been no independent analysis to show that it is going to save money in the short term or the long term.”

The way to save money is by bringing down prices through competition, he said.