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Behind the numbers

Monday, Dec 23, 2013

* Finke reiterates something I told you about a few weeks ago

Now that pension reform is on the books, the anti-public union/public employee folks will have to turn their attention in a new direction for a while.

Thankfully, Medicaid fraud is available to take up the slack.

As part of Medicaid reforms passed a couple of years ago, state agencies were required to review Medicaid rolls to get rid of people no longer eligible for benefits. Face it, if a recipient lives in Wisconsin, Illinois shouldn’t be paying his bills.

The state wasn’t exactly vigilant in dumping ineligible people from the program. Whether this was due to a lack of willpower or lack of manpower is still being argued, although it’s worth noting that the state’s workforce is significantly smaller than it was a decade ago.

Anyway, an arbitrator ruled last summer that the eligibility review work should be done by state employees, not Maximus, the private contractor hired by the state. Last week, the administration announced the results of negotiations to implement the ruling. It includes hiring more than 500 new workers, but also keeping Maximus around in a limited role for a while longer. Immediately, some were predicting doom and gloom because public, rather than private, workers will be doing the work. […]

One number tossed around last week was that Maximus found 40 percent of those receiving benefits were ineligible. At least, that’s how some people characterized it.

Baloney. Maximus reviewed about 497,000 Medicaid cases since the beginning of 2013. Of those, the final review work was completed on about 315,000 cases. And of those, 40 percent were found to be fraudulent and terminated.

So it’s not 40 percent of all Medicaid cases, it’s 40 percent of those checked, which is far less. Also, the ones that were checked first were mostly cases where the state already had suspicions. In other words, easy pickings. Once those are gone, it’s entirely possible the rate of fraud discovered will go down.

It’s more than just entirely possible, it’s almost guaranteed.

* Meanwhile, Crain’s buried a choice nugget deep in a story about business tax credits

Regular EDGE, or Economic Development for a Growing Economy, credits, which reduce a company’s state income taxes, have been awarded to 277 companies, totaling about $800 million, since the program started in 2001. In return, those firms invested nearly $8.5 billion in Illinois and created 49,300 jobs, more than twice the number estimated, according to a spokesman for the Department of Commerce and Economic Opportunity. Another 48,320 jobs were retained, slightly more than expected.

But in recent years, nine companies that pay little or no state income taxes, including Sears Holdings Corp., Motorola Mobility Inc. and Ford Motor Co., have won special legislation allowing them to keep part of the personal state income taxes paid by their employees if they invest and keep or create jobs in Illinois.

“Is that fair to a plumbing company with six people?” says Rep. Jack Franks, D-Marengo, who will co-chair next month’s hearing on business tax incentives. “Can they afford the most-connected lobbyists to go after tax breaks?”

Only Motorola Mobility, now owned by Google Inc., has collected on those credits so far, according to a DCEO spokesman. [emphasis added.]

* From an unemployment benefit story from the Sun-Times

This year has seen a trifecta of challenges for Lynn Richards, 30, of Elgin.

In April, she was laid off from her manufacturing purchasing job of 3½ years.

Her unemployment insurance kicked in, then she became pregnant during her job search.

Now Richards, who is married with a son and hasn’t yet found work, is among 80,000 Illinoisans expected to lose federal Emergency Unemployment Compensation on Saturday.

“I’ve been working since I was 20. I’ve never had this much trouble getting a job in my life. I’ve applied to like 200 places. I’ve gotten less than 10 calls and a couple of interviews,” she said. “Unfortunately now, no employer wants to hire someone [who is] pregnant.”

An estimated 1.3 million Americans who are the long-term unemployed are due to have their benefits cut off just after Christmas because Congress didn’t extend the recession initiative in its compromise budget bill passed by the Senate last week.

Another 1.9 million currently receiving state jobless benefits due to run out the first half of 2014 also will be affected, as they would have qualified for the federal compensation.

* County by county list of those who lost their benefits…

Adams 258
Alexander 33
Bond 92
Boone 328
Brown 13
Bureau 205
Calhoun 27
Carroll 50
Cass 76
Champaign 789
Christian 233
Clark 62
Clay 62
Clinton 158
Coles 218
Cook 38,260
Crawford 92
Cumberland 55
DeKalb 538
DeWitt 89
Douglas 59
Du Page 4,965
Edgar 92
Edwards 13
Effingham 165
Fayette 146
Ford 52
Franklin 349
Fulton 243
Gallatin 39
Greene 68
Grundy 320
Hamilton 43
Hancock 52
Hardin 34
Henderson 10
Henry 226
Iroquois 146
Jackson 233
Jasper 39
Jefferson 227
Jersey 130
Jo Daviess 52
Johnson 66
Kane 3,086
Kankakee 838
Kendall 717
Knox 281
La Salle 933
Lake 3,546
Lawrence 54
Lee 206
Livingston 147
Logan 134
Macon 1,161
Macoupin 291
Madison 1,618
Marion 231
Marshall 71
Mason 95
Massac 48
McDonough 87
McHenry 1,642
McLean 572
Menard 55
Mercer 40
Monroe 88
Montgomery 191
Morgan 187
Moultrie 58
Ogle 326
Peoria 1,546
Perry 131
Piatt 78
Pike 59
Pope 10
Pulaski 34
Putnam 44
Randolph 152
Richland 73
Rock Island 515
Saint Clair 1,667
Saline 220
Sangamon 1,059
Schuyler 38
Scott 26
Shelby 113
Stark 29
Stephenson 337
Tazewell 891
Union 101
Vermilion 533
Wabash 19
Warren 53
Washington 56
Wayne 65
White 62
Whiteside 351
Will 4,474
Williamson 440
Winnebago 2,388
Woodford 193
Total 81,867

- Posted by Rich Miller        


17 Comments
  1. - Hoping for Rational Thought - Monday, Dec 23, 13 @ 9:46 am:

    If the people removed rom the roles were already in cases that were suspicous or as they say low-hanging fruity, why didn’t anyone DO ANYTHING about it? The Maximus contract forced the issue? Really? So the State knew things were not right and just let it happen? Great defense.


  2. - Rich Miller - Monday, Dec 23, 13 @ 9:47 am:

    ===The Maximus contract forced the issue? Really?===

    No, new state law forced the issue.


  3. - Hoping for Rational Thought - Monday, Dec 23, 13 @ 9:53 am:

    Yes the new law allowed for the Maximus contract but we needed a law to forceState to go after”suspicious” cases and the “low-hanging fruit”? If it was so easy to get these cases why didn’t the State do this before? Why did it take a new law for them to follow existing law?


  4. - Demoralized - Monday, Dec 23, 13 @ 10:11 am:

    @Hoping:

    I’m guessing the state had been reviewing them but they don’t have anywhere the manpower to review as many cases at once as Maximus did.


  5. - A guy... - Monday, Dec 23, 13 @ 10:13 am:

    Anyone else see an effective and meaningful partnership between the State and Maximus here? Even an overall 10-15% recapture of Medicaid abuse would be an astounding number. My own view is it’s closer to 25%, but nowhere close to 40%. It’s a lot of dough, that two partners with motivation to race to the savings could help one another.


  6. - Demoralized - Monday, Dec 23, 13 @ 10:20 am:

    @A guy:

    The unions get touchy when they think somebody is doing work they are supposed to do. You have to do a “mother may I” with the unions any time you want to do a contract. While the unions are right to question work that should be done by employees, they are still failing to grasp the fact that no glut of new employees is forthcoming. They seem to think if they continue to challenge stuff like this the state will hire more people. That ain’t gonna happen. All they do is make it harder on their own employees by piling more work on them or, conversely, cause the work to not get done.


  7. - Pat C - Monday, Dec 23, 13 @ 10:26 am:

    I was under the impression that with the GOOG layoff in fall of 2012, that MOTO Mob went under the number of people employed that was needed.

    So, they may have gotten some, but now they get nothing.


  8. - A guy... - Monday, Dec 23, 13 @ 10:32 am:

    Demoralized…you’re probably correct. sigh. This could work for both of them.


  9. - Excessively Rabid - Monday, Dec 23, 13 @ 11:05 am:

    “…she became pregnant during her job search….”


  10. - wordslinger - Monday, Dec 23, 13 @ 11:07 am:

    Maximus seems to be getting attaboys for picking the low-hanging fruit identified by state employees.

    Why does that make them indispensable in some minds?


  11. - AFSCME Steward - Monday, Dec 23, 13 @ 11:07 am:

    A lot of these cases Maximus identifies as ineligible have to be reinstated. There entire process is very error prone. Additionally, many of the cases cancelled were for people no longer living in Illinois and no longer using Medicaid.

    “One number tossed around last week was that Maximus found 40 percent of those receiving benefits were ineligible. At least, that’s how some people characterized it.”


  12. - AFSCME Steward - Monday, Dec 23, 13 @ 11:12 am:

    Hoping For Rational Thought

    What the Maximus contract brought was more staff & new computer technology. The state neglected both of these for years. In the successful arbitration win, AFSCME demonstrated that the state could have saved millions by keeping the Medicaid determinations in house. The biggest reason for the “low fruit” was staffing shortages. Often the medical redeterminations would not get done because there was noone to do them.

    “Yes the new law allowed for the Maximus contract but we needed a law to forceState to go after”suspicious” cases and the “low-hanging fruit”? If it was so easy to get these cases why didn’t the State do this before? Why did it take a new law for them to follow existing law?”


  13. - AFSCME Steward - Monday, Dec 23, 13 @ 11:23 am:

    Demoralized

    Are you aware that the state is in the process of hiring an additional 520 workers to do the medical redeterminations ? That is in addition to the workers already hired earlier this year.

    “The unions get touchy when they think somebody is doing work they are supposed to do. You have to do a “mother may I” with the unions any time you want to do a contract. While the unions are right to question work that should be done by employees, they are still failing to grasp the fact that no glut of new employees is forthcoming. They seem to think if they continue to challenge stuff like this the state will hire more people. That ain’t gonna happen. All they do is make it harder on their own employees by piling more work on them or, conversely, cause the work to not get done.”


  14. - Anony - Monday, Dec 23, 13 @ 11:30 am:

    ==Maximus reviewed about 497,000 Medicaid cases since the beginning of 2013. Of those, the final review work was completed on about 315,000 cases. And of those, 40 percent were found to be fraudulent and terminated.==

    He’s vague about this. What happened to the unfinished cases? Who’s to say that the rate of fraud isn’t 40% for those also?
    After all, the more ineligible people are removed, the stronger Medicaid will be for those who truly qualify.

    But here’s something about Medicaid and the Affordable Care Act that is getting very little coverage in Illinois. Medicaid is being expanded to those with incomes less than 133% of the poverty level, and the asset test is being dropped. Seems good for those who have a low income or have seen a recent income drop, and have been thrifty enough to save some money for retirement or build some equity in a home. But guess what? Medicaid includes something called “estate recovery.” If you’re 55 or over, and in some cases younger, the value of the health benefits you receive from Medicaid can be extracted from your estate. In other words, Medicaid isn’t exactly health insurance. It’s more like a loan. And the state will seek repayment of the loan.

    Compounding this situation is the fact that if your income is low enough, you don’t have the option of subsidized health insurance, which does not include “estate recovery.” To receive benefits under the ACA, you must enroll in Medicaid. Imagine a situation where people provide an inflated estimate of their income to avoid the government’s “free health coverage.” Mind boggling.

    To alleviate this seeming injustice, some states are looking at modifying their rules for estate recovery. So far Illinois does not seem to be one of those states. But the first step is for Illinoisans to become aware of the issue.

    More on this topic can be found by searching Medicaid estate recovery, but here are three links:

    http://www.pnhp.org/news/2013/december/does-your-estate-belong-to-medicaid
    http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Eligibility/Estate-Recovery.html
    http://www.dailykos.com/story/2013/10/24/1250127/–Medicaid-is-Welfare-It-s-right-to-expect-repayment-With-poll


  15. - DuPage Dave - Monday, Dec 23, 13 @ 12:40 pm:

    The Medicaid ineligibility review is complicated. Too many people with pre-conceived political opinions are not looking into the data. Here’s an update (from September) found on the DHFS web site with about 15 seconds effort:

    “Savings have been less than some legislators hoped but in line with HFS’ forecasts because most of the people cancelled are relatively low users of Medicaid services. Forty percent of the first 105,000 people cancelled had no claims filed on their behalf in the six months before their cancellation. So far, annualized savings on these clients are about $44 million (just in the first 5 months: April — August). This is a per month savings per cancelled client of $58.

    The rate of cancellations will slow, since the queue was deliberately created to put priority cases first: those where data showed a discrepancy and those whose cases had been previously “passively redetermined” (i.e. not reviewed in a long time). The cost savings from these initial early cases likely will not be repeated in subsequent years and should not be relied upon.

    Seventy five percent of the cases cancelled are because the client has failed to respond to the letter asking for additional information. When the electronic data sources do not yield enough information to confirm eligibility, a letter is sent to the client seeking additional information. Clients likely don’t respond to the letter either because they know they are no longer eligible, or because the mail never reaches or is opened by them.

    About 16-19 percent of those cases cancelled this calendar year have already re-enrolled and were found to be eligible — this was expected and is comparable with the re-enrollment rate experienced in the past.”

    In other words, Maximus was given a list of the people most likely to be found ineligible. Many were on the eligible list but had not used any Medicaid services. The average savings per cancelled user was quite small. Most of the cancellations were due not to investigation but due to an individual not responding to a letter. How much work did that take and was it worth the cost of the contract with Maximus?


  16. - Ghost - Monday, Dec 23, 13 @ 3:51 pm:

    lets look sat it like this, back in 2000 or so the State had 60-65k workers.

    The State now has 40-44k workers.

    When yah cut that many employees you stop being able to get work done. What are the easy places to cut? enforcement. Work comp investigators medicaid etc. These employees do not provide mandatory services which move applications and processing, so when you need to trim, they get cut.

    This has always been one of my big concerns with the people who want to donwsize govt. Are we really saving money by elminating jobs? particualry when a lof of the jobs cut are the ones in place to fight fraud. Want a better work comp system? hire more investigators dont cut the work comp budget. and so on


  17. - Anyone Remember? - Monday, Dec 23, 13 @ 4:05 pm:

    Hoping for Rational Thought

    As has been noted by others elsewhere, DHS headcount is down by over one-third since the 2002 ERI - 18.5 thousand at the end of FY 2002 to 11.7 thousand at the end of FY 2012. That is most likely the reason the “re-certifications” weren’t getting done.


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