SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
CapitolFax.com
To subscribe to Capitol Fax, click here.
Adventures in lousy governance

Tuesday, Aug 19, 2014

* AP

Illinois used faulty methods for withdrawing federal Medicaid money, resulting in “a perpetual ‘treadmill effect’” of regular overdraws of dollars that the state later had trouble repaying, federal auditors said in a report released today.

The state’s withdrawals exceeded its actual Medicaid spending by an average of $60 million per quarter during the three years reviewed, according to the report from the U.S. Department of Health and Human Services’ Office of Inspector General.

The federal government may have lost as much as $792,000 in interest during fiscal 2010 through 2012 because the state repaid the money two to six months later, the report said.

* The Tribune explains why

Because Illinois still relies on a 30-plus-year-old Medicaid software system, it is unable to provide real-time claims information. The state, therefore, must use historical claims data to estimate the federal government’s share of the payments by quarter, Casey said.

Each day the state pays hospitals, doctors and other health care providers, it submits the federal government a bill for its projected share of the costs. At the end of each quarter, it reconciles the difference.

Between fiscal 2010 and 2012, the state’s estimates missed the mark by at least $4 million per quarter, ranging from undrawing $28.6 million from the federal government in one quarter and overdrawing $193.7 million in another, according to the audit.

Even so, Casey said, “When you look at a $60 million variance per quarter, that’s not much of a variance on average when you consider we have $3 billion in claims each quarter.”
Casey said as Illinois moves more of its Medicaid patients into managed care programs, where it will be paid a fixed fee per-patient, per-month, it will be able to better estimate and manage the amount it draws from the federal government.

Illinois won’t have new software to correct this problem until 2017.

But none of that explains why the state was depositing federal Medicaid dollars into GRF, which is why the state couldn’t pay back the money right away at the end of the quarters.

* Meanwhile

The bumpy marriage between the state and the private company that operates the Illinois Lottery is ending in a divorce.

Gov. Pat Quinn’s office confirmed to me [Friday] that it is ending its contract with Northstar Lottery Group LLC to operate the $2 billion-a-year lottery system, seven years earlier than scheduled.

It is not yet certain whether the separation will be voluntary by both parties, but a decision to end the contract has been made.

“The governor’s office has directed the lottery to end its relationship with Northstar,” gubernatorial spokesman Grant Klinzman said in an email that he later verified in a brief phone conversation. “The administration has had serious concerns with Northstar’s performance. The governor demands every state contractor be held accountable for their performance.”

* More

What’s most likely to happen is that Northstar will cease almost immediately to have any say in how the Lottery operates. Though there will likely be a short period of de-entangling transition, the 140 staffers or so staffers believed to work for Northstar will no longer be actively — or majorly — involved in charting the Lottery’s course.

In the short term, Jone’s own Lottery staff likely will take over management. And yes, there most likely will be a new private manager, as the Illinois state law that created a Lottery private manager function is still on the books and isn’t likely to be done away with anytime soon.

* Sun-Times

Northstar’s defense is that state meddling and inaction are to blame for much of the shortfall. The company contends, for example, that state officials endlessly delayed approval of a promising new Lottery game based on the board game Monopoly. Northstar also argues that later final audits will erase much of the supposed shortfall.

We’re loath to take sides too strongly on this one, seeing plenty of blame all around. We suspect Northstar overpromised from the start what it could deliver, but we also know how maddening it can be to get a government bureaucrat to make a decision or get out of the way.

The undeniable fact remains that Northstar grew Lottery sales far faster than the state did. Northstar’s own estimate is that sales grew by 3 percent a year for five years when the Lottery was administered by the state, then grew by an average of 12 percent a year after Northstar took over.

Sigh.

- Posted by Rich Miller        


18 Comments
  1. - Cassiopeia - Tuesday, Aug 19, 14 @ 1:16 pm:

    It is amazing that anyone can say that the 30 year-old Medicaid software system will be updated by 2017.

    Ask them for the project chart Rich. It doesn’t exist. It’s someone’s dream.


  2. - Rufus - Tuesday, Aug 19, 14 @ 1:19 pm:

    Northstar apparently did not make the correct political contribution.


  3. - Stones - Tuesday, Aug 19, 14 @ 1:22 pm:

    The entire Lottery needs to be rethought. Will all the gambling opportunities here and in neighboring states there is nothing less exciting than watching ping pong balls in a blender (other than perhaps watching the grass grow). If the state wants to generate interest they need to come up with something more creative. JMHO


  4. - Rufus - Tuesday, Aug 19, 14 @ 1:25 pm:

    If the same company that was hired to write ABE (Application for Benefits Eligibility) is hired do the the Medicaid rewrite, then $800,000 in lost interest will be the least of the Fed’s worries.


  5. - OneMan - Tuesday, Aug 19, 14 @ 1:26 pm:

    If Northstar got any real growth after the advent of Video poker they should get a medal.

    But they were too far behind what they said they could do so I guess the need to go.


  6. - Demoralized - Tuesday, Aug 19, 14 @ 1:28 pm:

    ==But none of that explains why the state was depositing federal Medicaid dollars into GRF==

    As far as I know that’s where the money has always been deposited, Rich.


  7. - Freeze up - Tuesday, Aug 19, 14 @ 1:47 pm:

    Maybe whoever wrote the ICASE software for ISP is still available.


  8. - West Side the Best Side - Tuesday, Aug 19, 14 @ 3:01 pm:

    Now the really important Lottery question is this - What about Linda Kollmeyer?


  9. - Nearly Normal - Tuesday, Aug 19, 14 @ 3:13 pm:

    Linda is an employee of WGN. IF WGN keeps the contract for televising the lottery draws, Linda has a job. Now that WGN America no longer broadcasts the news programs, that may give another station an opportunity. If there is a change, let’s hope the new station hires Linda.


  10. - walker - Tuesday, Aug 19, 14 @ 3:14 pm:

    Didn’t look like much of a story, given the size of the program.

    Later in the AP story when they talk about “Medicaid fraud” they fail to point out the committers and beneficiaries of that “fraud” are businesses and doctors, not the poor.


  11. - Roamin' Numeral - Tuesday, Aug 19, 14 @ 3:17 pm:

    ==The entire Lottery needs to be rethought. Will all the gambling opportunities here and in neighboring states there is nothing less exciting than watching ping pong balls in a blender (other than perhaps watching the grass grow). If the state wants to generate interest they need to come up with something more creative. JMHO==

    Agreed. We need something like this: http://www.equilottery.com/


  12. - Hoping for Rational Thought - Tuesday, Aug 19, 14 @ 3:32 pm:

    The majority of federal Medicaid money has always been deposited into GRF. When you see GRF revenue estimates that is what most of the federal revenues are. The feds reimburse the State for spending State dollars. So when the State dollars are spent from GRF the federal reimbursement goes into the fund being reimbursed i.e. GRF. Over the years there have been some special Medicaid funds but the large portion remains to be GRF.

    Even if the money was deposited into a special fund they couldn’t pay it back quickly since they always have bills waiting to get paid.

    Also the computer system has been neglected because no administration wants to spend the money to upgrade in past. No one praises you or votes for you because you upgrade Medicaid system computers…


  13. - Budget Watcher - Tuesday, Aug 19, 14 @ 6:30 pm:

    It doesn’t sound like there was any Medicaid fraud. Ultimately HFS claimed federal share only for what they spent on Medicaid. Also, the Medicaid program is funded primarily from GRF, so federal matching funds on the GRF spending would logically flow back to GRF. There’s nothing sinister or controversial about that.


  14. - Arizona Bob - Tuesday, Aug 19, 14 @ 9:29 pm:

    Gee, I’m sure the State Lottery commission has a firm lined up to take over the Lottery; a firm free from political cronysim and patronage, with a record of growing lottery receipts and profits MORE than the 12% per year Northstar was earning.

    Sure… that’s the ticket, no poltics, just good, sound planning and management from the State of Illinois.

    If you believe that, I’ve got some oceanfront property here in Scottsdale in which you may be interested…..


  15. - Jonathan - Wednesday, Aug 20, 14 @ 12:36 am:

    While the majority of Medicaid spending used to occur through the GRF line item, that hasn’t been the case for several years, now. Most Medicaid spending is now “off-budget” (in the sense that nobody talks about non-GRF budget) in special funds, with much less sunshine. (The state has been able to keep the GRF portion at low growth, making the GRF-only budget look better, while the costs are exploding in the special funds.)


  16. - VanillaMan - Wednesday, Aug 20, 14 @ 8:12 am:

    BAD government!


  17. - Losing my Edge - Wednesday, Aug 20, 14 @ 10:03 am:

    ==While the majority of Medicaid spending used to occur through the GRF line item, that hasn’t been the case for several years, now. Most Medicaid spending is now “off-budget” (in the sense that nobody talks about non-GRF budget) in special funds, with much less sunshine.==

    That’s just an inaccurate statement. While it’s true that some Medicaid expenses have been moved to OSF due to alternative revenue resources, the vast majority of Medicaid dollars are spent through GRF. Even with the large changes made to the Medicaid several years through the SMART Act and the other policy changes.

    Additionally, sure some new expenditures aren’t paid out of GRF due to changes enacted through the ACA. Those are 100% federally reimbursable, though, so should that money really be included in a realistic discussion surrounding our state budget?


  18. - Jonathan - Wednesday, Aug 20, 14 @ 10:49 am:

    Losing my Edge:

    So you’re saying HFS, COGFA, GOMB and the Comptroller are all wrong about the state’s Medicaid budget?

    GRF appropriations account for about $7 billion of a $19 billion program. Are you honestly suggesting that 37% of program appropriations equates to the “vast majority” of Medicaid dollars?

    This isn’t a new trend, either. It was underway prior to the ACA and prior to the SMART Act changes. Back in 2008, GRF represented about half of the $14 billion program.

    Despite the fact that program costs have increased by $5 billion, the GRF line item has remained relatively flat. That doesn’t happen if the “vast majority” of Medicaid dollars flow through GRF.


Sorry, comments for this post are now closed.


* Mess with the bull...
* Credit unions serve as not-for-profit cooperatives; Banks elect Subchapter S to avoid taxes
* *** LIVE *** Session coverage
* They got him on tape
* Question of the day
* Get well soon, Mika!
* Comprehensive heroin bill introduced
* Viewer mail
* Former "role model" running a "lost" state
* Today's number: $41,237
* Strong Chicago business growth powering Illinois economy
* Consequences of a trooper hiring freeze
* Rauner still on the warpath
* Yesterday's blog posts

Support CapitolFax.com
Visit our advertisers...

...............

...............

...............

...............

...............

...............

...............

...............


Search This Blog...

Search the 98th General Assembly By Bill Number
(example: HB0001)

Search the 98th General Assembly By Keyword

          
        * Google Stops Updating Chrome For Android 4.0
        * Mophie Juice Pack for Galaxy S6 and S6 Edge debuts
        * Gionee shows off new ELIFE S7 phone at MWC 2015
        * BitTorrent Sync 2.0 adds pro features
        * How to create a personal cloud with BitTorrent Sync 2.0
        * Microsoft wins big at Mobile World Congress 2015
        * YotaPhone 2 US release details revealed, future hardware teased

        * Apple Edges Out Samsung in Q4 Global Smartphone Sales
        * Trulia Boards is Pinterest for Real Estate
        * An Adult's Guide to Hygiene (for Those Who Weren't Taught Growing Up)
        * Oculus VR hires Google X exec Mary Lou Jepsen
        * Best Buy Announces First Buyback Since 2012 as Profit Jumps
        * Bake Tater Tots in Peppers for a Quick, Delicious Snack
        * Report: Google preparing iOS app for Android Wear smartwatches

        * A/V Room: Like his Cadillacs, Minnie Miñoso tributes rolling
        * Coleman helping White Sox craft new identity
        * Depth gives White Sox options in Sale's absence
        * Camp notes: Arizona rain washes out intrasquad game
        * Rodon prefers to let his game do the talking
        * Outfield prospect Hawkins not rushing his progress
        * Podcast: Good bye, Mr. White Sox

        ...............


        Main Menu
        Home
        Illinois
        YouTube
        Pundit rankings
        Obama
        Subscriber Content
        Durbin
        Burris
        Blagojevich Trial
        Advertising
        Updated Posts
        Polls

        Archives
        March 2015
        February 2015
        January 2015
        December 2014
        November 2014
        October 2014
        September 2014
        August 2014
        July 2014
        June 2014
        May 2014
        April 2014
        March 2014
        February 2014
        January 2014
        December 2013
        November 2013
        October 2013
        September 2013
        August 2013
        July 2013
        June 2013
        May 2013
        April 2013
        March 2013
        February 2013
        January 2013
        December 2012
        November 2012
        October 2012
        September 2012
        August 2012
        July 2012
        June 2012
        May 2012
        April 2012
        March 2012
        February 2012
        January 2012
        December 2011
        November 2011
        October 2011
        September 2011
        August 2011
        July 2011
        June 2011
        May 2011
        April 2011
        March 2011
        February 2011
        January 2011
        December 2010
        November 2010
        October 2010
        September 2010
        August 2010
        July 2010
        June 2010
        May 2010
        April 2010
        March 2010
        February 2010
        January 2010
        December 2009
        November 2009
        October 2009
        September 2009
        August 2009
        July 2009
        June 2009
        May 2009
        April 2009
        March 2009
        February 2009
        January 2009
        December 2008
        November 2008
        October 2008
        September 2008
        August 2008
        July 2008
        June 2008
        May 2008
        April 2008
        March 2008
        February 2008
        January 2008
        December 2007
        November 2007
        October 2007
        September 2007
        August 2007
        July 2007
        June 2007
        May 2007
        April 2007
        March 2007
        February 2007
        January 2007
        December 2006
        November 2006
        October 2006
        September 2006
        August 2006
        July 2006
        June 2006
        May 2006
        April 2006
        March 2006
        February 2006
        January 2006
        December 2005
        April 2005
        March 2005
        February 2005
        January 2005
        December 2004
        November 2004
        October 2004

        Blog*Spot Archives
        November 2005
        October 2005
        September 2005
        August 2005
        July 2005
        June 2005
        May 2005

        Syndication

        RSS Feed 2.0
        Comments RSS 2.0
        WordPress

        Loading


        * What Areas Does the Illinois Supreme Court Addr.....
        * US: Ex-CIA chief admits mishandling classified .....
        * Agents target industry helping Chinese women ha.....
        * FREE FALLING: Gov. Chris Christie’s approval ra.....
        * Get well soon, Mika!..
        * Question of the day..
        * Rauner still on the warpath..
        * JEFF EDELSTEIN: Hey Illinois: Drop dead. Love, .....
        * Illinois governor says New Jersey is 'going dow.....
        * Former Congressional Staffer Replaces Brauer In.....


        * Winfrey's Harpo Studios in Chicago to close in December
        * New Illinois state representative sworn in to replace Brauer
        * Chicago's retired Cardinal George admitted to hospital
        * Status hearing set in Chicago in Islamic State case
        * Status hearing set in Chicago in Islamic State case
        * More than 1M Illinois students to take new standardized test
        * St. Louis man facing drug-trafficking charge in Illinois
        * United Airlines won't accept rechargeable battery shipments
        * Cubs expect `dusty' year amid Wrigley Field renovations
        * Heavy snow hits Arizona, hail turns California beach white

        * Lawmakers introduce heroin harm reduction bill
        * Rauner: New Jersey is 'going down the drain'
        * Hunters, outdoorsmen hope for ally in Rauner
        * Tim Butler, congressional staffer, selected to fill former Rep. Rich Brauer's seat
        * Schock reimburses costs for lavish 'Downton Abbey' office decor
        * Brauer replacement could be chosen as early as Saturday
        * Quinn advocates consumer rights, blasts Rauner's budget
        * Rauner says he's 'staying out' of Chicago mayor's race
        * Quinn advocates consumer rights in Loyola speech
        * Judge won't delay sentencing for former state lawmaker Farnham

        * Cardinal George in hospital for evaluation
        * Inside the powerful lobby fighting for your right to eat pizza
        * Join us: Crain's 2015 Physicians Breakfast
        * Obamacare's survival hangs on four words at Supreme Court
        * A shot at Christie? Rauner says NJ is 'going down the drain'


          * Cardinal George admitted to hospital for tests
          * Bolingbrook terror suspect's home searched by feds 2nd time
          * Oprah Winfrey's Harpo Studios to close in December
          * 'Wintry mix' blamed for major CTA delays; service back to normal
          * State to push police to avoid DUI paperwork errors
          * Mundelein teen faces sentencing in stabbing death of sister
          * Snow and ice glaze morning commute, I-57 closed by accidents


          * Senator Starts Petition To Try To Stop Budget Cuts
          * Are All Those Cat Videos Making Us Stupid?
          * Butler Sworn In As 87th District Representative
          * Election officials report light voter turnout in Chicago
          * Chicago Mayor Rahm Emanuel forced into April runoff election
          * Controversial Netanyahu speech is latest glitch in U.S.-Israel relations
          * After ugly brawl, Northwest Indiana hoops teams are cleared to play
          * SCHOOL CLOSINGS AND DELAYS
          * CLOSINGS AND DELAYS
          * Results: 2015 Chicago municipal election


          * Lawmakers introduce heroin harm reduction bill
          * Kathleen Parker: Twitter as America's conscience
          * Quote of the Day: Tuesday, March 3, 2015
          * Rauner: New Jersey is 'going down the drain'
          * Jorge Chapa: Illinois' majority-minority future and the age-race shift
          * Quote of the Day: Monday, March 2, 2015
          * Hunters, outdoorsmen hope for ally in Rauner
          * Our Opinion: Looking for the leaders among Springfield's candidates
          * Statehouse Insider: That's not a nice thing to say
          * Rep. Rodney Davis and Rep. Mike Bost: Strong financial markets benefit Illinois


          * Little girl testifies at predatory sex trial of Troy babysitter
          * New Mississippi River bridge could be named after Lane Evans
          * Tuesday March 3 government meetings
          * Villarrica volcano erupts in southern Chile, thousands flee
          * 03-03-15 Penny for Your Thoughts
          * Third arrest made in Champaign shooting
          * Drew Peterson pleads not guilty in murder-for-hire plot
          * New Illinois state representative sworn in to replace Brauer
          * RI County board to vote on new administrator
          * Clinton used personal email account as Secretary of State


          * Naperville fashion show helps seniors recognize scammers
          * US running out of room to store oil; price collapse next?
          * FDA issues warning on men's testosterone drugs
          * AP source: Australian rugby star agrees to with 49ers
          * Bill would name new I-74 bridge for late US Rep. Lane Evans

          * Why I Won't Be At Israeli PM's Speech - Hu...
          * Immigrants hear how Obama policy might gai...
          * Office Hours to Meet with Shimkus' Staff -...
          * Immigrants hear how Obama policy might ben...
          * FIBRA Prologis to Participate in Citi's 20...
          * FIBRA Prologis Asistirá a la Conferencia d...
          * Shimkus furious over Keystone veto - Princ...
          * Senior US House Democrat welcomes limited ...
          * Gutierrez: I'll Shut Down DHS Instead of V...
          * Gutierrez: Obama eyes partial launch of an...

          * Israeli Prime Minister Benjamin Netanyahu ......
          * Israeli PM: Iran Nuclear Talks Are a 'Bad ......
          * Do the Koch Brothers Really Care About Cri......
          * Elizabeth Warren Among 55 Democrats Boycot......

          * The most important line of Benjamin Netany......
          * Excerpts from recent South Dakota editorials...
          * Senate Republicans Reveal Their Supreme Co......
          * Pro-Israel lobbyists heap Iran pressure on......
          * Portman and Brown introduce bill to boost ......

          * Report: 1 Million Poor U.S. Adults Could See SNAP Benefits Cut Next Year
          * Golan strikers celebrated their victory today by working with a union contract.
          * Over 1,000 IL Schools Joined Federal Free Meals Program This Year
          * Illinois’ opt-out bill.
          * Save $20 by taking BMCE webinar offered tomorrow and Thursday
          * Still time to register for the BMCE webinar this week
          * Saturnino Orestes Armas Minoso Arrieta
          * They Called Him Minnie
          * Supporters gather to support Chiles’ aldermanic bid
          * Illinois Housing Development Authority wants REALTORS®’ opinions


          * IEMA Urges People to Prepare for Severe Weather - Tornadoes, floods and severe storms can happen any time of year
          * IDHS helps more than 5,000 individuals with disabilities find jobs - Program offers necessary tools to earn a living wage and become more independent
          * 24th Anniversary Desert Storm Remembrance Ceremony
          * Illinois Department of Human Rights Announces 2015 Spring Training Schedule
          * Snow and Freezing Rain to Impact Travel in Illinois - IDOT Crews Prepared to Battle Winter Weather this Weekend




              Hosted by MCS SUBSCRIBE to Capitol Fax Advertise Here Mobile Version Contact Rich Miller