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Mercyhealth to no longer accept IlliniCare, Meridian, Molina and BCBS Medicaid patients in effort to save money

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ROCKFORD (WREX) — Faced with a multi-million dollar shortfall, Mercyhealth will soon no longer accept certain patients based on their insurance.

Mercyhealth says patients with IlliniCare, Meridian and Molina Medicaid will have 90 days to find another healthcare provider, doctor and hospital. Patients with Blue Cross Blue Shield Medicaid will have six months.

“We have worked in good faith for several weeks with IlliniCare, Meridian and the other MCOs in an effort to renegotiate contract language that includes acceptable provisions,” said Kim Scaccia, Vice President of Revenue Cycle Management. “Unfortunately we have not been able to reach agreement with them. Therefore, the Mercyhealth agreements with the MCOs will terminate on July 21, 2020 and BCBS Medicaid will terminate on October 22, 2020."

The announcement comes hours after the healthcare system said it would implement pay cuts to leadership and physicians.

Mercyhealth stands to lose $30 million over the next year because the actual costs of care outweigh the revenue from Managed Care Organizations (MCOs), according to the healthcare system.

“Given the extremely low rates of reimbursement, the difficulty to obtain payment, and the large volume of MCO patients that come to Mercyhealth for care, we can no longer sustain offering services to the MCO subscribers of IlliniCare, Meridian, Molina and BCBS-Medicaid,” Scaccia said.

Last week, Mercyhealth said it would move all COVID-19 patients to its Rockton Ave. campus so it could open the Javon Bea campus on Riverside Blvd. to elective surgeries and care, in an effort to gain revenue. Other Rockford health systems and Mayor Tom McNamara criticized the move.

On March 23, Mercyhealth furloughed employees to save money from shortfalls during the COVID-19 pandemic. The hospital didn't clarify the number of furloughed workers due to "confidentiality."