Illinois’ Medicaid Problems Could Jeopardize Money For Schools, State Workers, Attorneys Say

Attorneys for the Illinois state government say payments to schools, services for foster children and even state employees could be in jeopardy if the state is forced to speed up payments to Medicaid service providers, who have threatened to stop seeing low income patients.

Earlier this month, 25 doctors, health care providers and insurance companies (also known as managed care organizations, or MCOs) around Illinois told U.S. District Judge Joan Lefkow that the state was six months late in paying its Medicaid reimbursements, and if that continues, then Medicaid patients could see interruptions in their care.

At the time, Family Health Network claimed the state owed it $213 million. Meridian Health Plan of Illinois was owed $557 million, and Aetna was owed $650 million. Since that filing, Illinois Comptroller Susana Mendoza released about $800 million in Medicaid payments, though it was only a third of what the state owes.

In a new court document filed Thursday, attorneys for the state fired back that the state is paying the Medicaid reimbursements as fast as it can, but it’s spending more money than it’s bringing in.

“The timing of the payments to MCOs is attributable to the level of available cash on hand to pay outstanding bills, not the lack of a budget,” Assistant Attorney General Doug Rees wrote in the court filing.

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The attorney general repeatedly points out that without a budget, the state’s bill backlog has jumped from $7.7 billion in 2016 to $14 billion presently, an 82 percent increase. If Judge Lefkow sides with the Medicaid providers and forces Medicaid payments first, then the state will be even slower in paying for schools, foster children and the paychecks of state employees, according to Assistant Comptroller Kevin Schoenben.

In sworn statements, representatives from doctors and MCOs have said they’ve already seen the consequences of the state’s delinquent payments.

Meridian said it has received a notice from two health care providers -- one in DuPage County and one in Chicago’s northern suburbs -- that they were leaving the Meridian network.

Consuelo Salazar, an administrator with Provida Family Medicine in Grayslake, said in an April 24th affidavit that the state owes Provida more than $185,000.

“Due to the lack of predictability of timely payments … Provida is being placed in an increasingly precarious cash flow situation,” Salazar wrote.

Provida ultimately ended its relationship with the MCO it had been working with, effectively meaning it’s not seeing Medicaid patients any more, because the MCO couldn’t make predictable and timely payments, according to the affidavit.

A court hearing on the issue is scheduled for May 24.