* There’s something you need to keep in mind when reading this AP report about the problems that will be created by pushing off $1.2 billion in Medicaid payments until after next fiscal year ends…
Illinois is on the verge of approving a Medicaid budget that could mean doctors and hospitals wait months to be paid and poor people have a harder time finding care while state government falls deeper into a financial hole.
The budget passed by lawmakers last month promises doctors and hospitals the same pay they get now. The same number of poor Illinoisans will be entitled to virtually the same services. But the amount of money set aside for Medicaid falls about $1.2 billion short of covering all those costs. […]
The payment delays would mean financial pain for anyone who treats the poor, experts said. More doctors and dentists might choose not to see patients who depend on Medicaid. Hospitals and nursing homes would face pressure to cut staff or delay improvements.
Last month, hospitals and nursings homes actually requested the delayed payments in lieu of a rate cut…
Howard Peters, executive vice president of policy and advocacy for the Illinois Hospital Association, told the house budgeting committee that his members favored a delay in payments over a cut in rates. “We know that extending the payment cycle is not desirable. It’s not desirable for you. It’s not desirable for our members. But it is a far better solution. A far better solution than taking an inadequate Medicaid payment and making it even more inadequate,” Peters said. “Given the choices that you may have before you, we would encourage you to think extending the payment cycle rather than cutting the rates across the board. Much greater harm is done by cutting the rates.” […]
Putting off Medicaid payments would allow the state to cut costs out of the Fiscal Year 2012 budget by pushing them into FY 2013. However some lawmakers have warned that delaying the payments along with a loss in federal dollars could mean trouble on the horizon for Medicaid budget in FY 2013. Chicago Democratic Rep. Sarah Feigenholtz, who chairs the House Human Services Appropriations Committee, said the overall Medicaid budget — which is spread out over several state agencies — is slated to lose $765 million in federal stimulus funding in FY 2012.
“In FY 13, when we come look at our Medicaid numbers, we’re all going to faint. We’re all going to faint,” she said.
Can you say “Punt”?
* And here is something I warned subscribers about last week. Quinn could create a “crisis” next spring by spending cash like there were no cuts or payment delays…
It’s not guaranteed that Quinn will deal with the cuts by delaying payments. Spokeswoman Brie Callahan said the governor and aides are still studying the options. One of many possibilities under review would be to continue paying at the normal rate even if it means burning through all available money by March, she said. Then lawmakers might be forced to provide more money rather than see Medicaid services shudder to a halt.
Medicaid isn’t the only budget area that was underfunded. Schools took a $150 million cut even though the General State Aid formula was not changed. That’s just one of the things Senate President John Cullerton was referring to in his press release last week…
“There are still major structural deficiencies in the House budget that will become clear in the months ahead. I look forward to having the opportunity to address issues such as the underfunding of education and social service commitments.”
* Speaking of the budget, this is a pretty silly approach to editorializing by the Bloomington Pantagraph…
There are still plenty of places to cut the state budget. If you don’t believe us, ask the Illinois Policy Institute.
We don’t have enough information to unquestionably endorse all 10 actions outlined in the institute’s “Get Out the Veto Pen” report. We don’t know whether some of the suggested cuts would violate terms of contracts or create other problems.
How about picking up the phone and just, you know, asking around? Also, the IPI identified just $49 million in cuts, and the Pantagraph opposed the biggest one…
The biggest ticket on the Top 10 list is $23.8 million for tourism promotion.
Cutting out all spending on tourism promotion could do more harm than good. Tourism is a viable industry that brings in revenue and supports jobs in Illinois.
* Not included on the Policy Institute’s list is making alleged not-for-profits like the IPI pay taxes, even when they start up identically named political action committees at the same mailing address…
The head of the Illinois Policy Institute, which bills itself as a “nonpartisan research organization dedicated to supporting free market principles and liberty-based public policy initiatives,” is now running a political action committee.
Joining JOHN TILLMAN, CEO of the think tank, in the endeavor is DAN PROFT, listed as treasurer of the new Illinois Liberty PAC.
The address of the PAC on LaSalle Street in Chicago is the same as that of the policy institute, though Tillman said that’s just a convenience to get mail, and there will be a new address soon. […]
According to a 2009 report to the Internal Revenue Service, Tillman was paid more than $175,000 annually as CEO and chairman of the institute, which rails against what it considers wasteful government spending.
Those guys are just way too blatant. And, according to Bernie’s column, they still haven’t issued a retraction for the most bogus story of the year. The IPI claimed that Rep. Bob Rita was ineligible to serve in the House because he’d been convicted of a felony. Except, he was never convicted of a felony and felons who have completed their sentences are clearly not barred from serving in the General Assembly. They also more than implied that I was doing the bidding of the House Democrats because I pointed out their goofy errors. There’s been no public retraction on that one, either. They’ve asked for a private meeting, but I think I’ll wait for the apology first.
- Demoralized - Monday, Jun 20, 11 @ 11:19 am:
I’m not sure why anyone would give the Illinois Policy Institute the time of day. Their agenda is so obvious and their ideas so ridiculous that they seem more the equivalent of something akin to “The Onion” than an actual think tank. And I feel like I need to apologize to “The Onion” for even mentioning them in the same breath . . .
- Just Observing - Monday, Jun 20, 11 @ 11:23 am:
I think a group like IPI is very much needed in Illinois, but I am very uncomfortable with their rhetoric, most specifically bashing dems. I understand some “think tanks” have ideological leanings, but IPI, in their publications, use very pointed language attacking Democrats when in fact the problems they rail against are a Dem and GOP problem. Their credibility is lost with me.
- Bring Back Boone's - Monday, Jun 20, 11 @ 11:25 am:
LOL- I love seeing non-partisan think tank and Dan Proft in the same sentence. What a joke.
- just sayin' - Monday, Jun 20, 11 @ 11:41 am:
Everyone knows the IPI is just an arm of Tom Cross and the House Republicans, so all the ineptitude goes along with that.
For crying out loud, the IPI’s official position on gambling is “neutral.” How can a group that claims to be about good budgeting be “neutral” on such a huge thing impacting the budget? Because so many Republicans are for gambling expansion, that’s why.
The IRS should have taken away their not for profit status long ago. I think they’ve got huge problems.
- wordslinger - Monday, Jun 20, 11 @ 11:42 am:
–Howard Peters, executive vice president of policy and advocacy for the Illinois Hospital Association, told the house budgeting committee that his members favored a delay in payments over a cut in rates.–
If they can budget for it, the extra juice for late payments is a good deal. I can’t think of any hospitals going out of business lately.
- Anonymous - Monday, Jun 20, 11 @ 11:56 am:
The Pantagraph editorials all lean (and sometimes just topple over) to the right, but this particular one really got to me. At least they had the intelligence to disagree with the cuts to tourism. Too bad they didn’t spell out exactly who the IPI is and who they represent.
- Cincinnatus - Monday, Jun 20, 11 @ 11:57 am:
Perhaps Sen Lightfoot would want to take this issue on. She seems the only one in Springfield able to spearhead a deal.
- Loop Lady - Monday, Jun 20, 11 @ 12:00 pm:
Senator LIGHTFORD…c’mon pay attention now Cincy…
- Cincinnatus - Monday, Jun 20, 11 @ 12:00 pm:
“The IRS should have taken away their not for profit status long ago.”
At the same time they take away the non-profit status of the unions?
- Ahoy - Monday, Jun 20, 11 @ 12:15 pm:
Only the Illinois government would consider delaying payments a cost savings.
- dave - Monday, Jun 20, 11 @ 12:22 pm:
At the same time they take away the non-profit status of the unions?
Unions are not non-profits organizations. They are regulated entirely differently.
- steve schnorf - Monday, Jun 20, 11 @ 12:49 pm:
Actually, anyone who budgets on a cash basis rather than accrual would likely show deferrals of payments as savings, at least as far as the current year’s statement goes
- steve schnorf - Monday, Jun 20, 11 @ 1:01 pm:
To another point, I’m not sure which approach the Admin takes toward the Medicaid approp makes much difference. Do you get paid timely for 9 months and then not at all for 3, or do you get paid 90 days late for 12 months? Either way the state spends its approp, and vendors wait; bleed a little every month, or bleed a lot for 3 months.
It really seems to me all the GA is doing is letting the payment cycle go back to where it was before it was artificially bought down by the fed stimulus money. The Gov recommended an alternative that constituted a real cut, the vendors preferred deferral to decrease, as almost anyone in the business would, and the GA went along.
- wordslinger - Monday, Jun 20, 11 @ 1:26 pm:
Schnorf, what’s your take on Peters’ statement, in that the IHA would rather have a later cycle than a cut in payments?
Do these “non-profits” count on the extra juice from late payments?
- Rich Miller - Monday, Jun 20, 11 @ 1:38 pm:
===Do these “non-profits” count on the extra juice from late payments? ===
As Schnorf said earlier, the state is returning to a more “normal” pay-out process. The providers can deal with that. What they don’t want is to open the door to lower rates. Once that happens, rates can be more easily lowered again.
- Bemused - Monday, Jun 20, 11 @ 1:44 pm:
Dave @ 12:22
Unions are not non-profit Orgs.
I would say more often than not they are in fact Non-profits. I think a lot of folks have a misconception about the term “Not for Profit”. A whole lot of money goes thru Not for Profits. A large amount of Public Money goes thru Not for Profits. You can set up a Not for Profit and pay yourself quite well. You can not declare a profit and pay out dividends. Yes Unions do have some different regs than other non-profit groups and have to file a lot of paperwork to USDOL. If you want to find out about Union finances check into the USDOL website. I think folks would be amazed at what goes on under the Non-Profit banner.
- Loop Lady - Monday, Jun 20, 11 @ 2:17 pm:
THIS is how the legislature is working to erase the deficit? Quinn was right to push the Senate Dems into a corner on the additional revenue they wanted to spend which we don’t have! “Uncle”! cried the Sen Dems…
C’mon boys and a few girls, let’s finally address the embarassment that our State finances are by cutting the budget down to size and not being a coward about it cause you want to be re-elected…
- zatoichi - Monday, Jun 20, 11 @ 3:07 pm:
‘Do these “non-profits” count on the extra juice from late payments?’
Depends if you have the cash to tolerate 8-9 months of no payments. With most easy to access investments in the 2% range, that 1% penalty payment per month after 90 days can work well if healthy reserves exist. That 1% penalty does not matter if cash flow is so tight you have to get 5% loans to meet this Friday’s payroll.
- steve schnorf - Monday, Jun 20, 11 @ 3:16 pm:
ws, it probably differs from vendor to vendor, but I would say most eat up most interest they earn on the cost of cashflow loans
- Old Milwaukee - Monday, Jun 20, 11 @ 3:24 pm:
No lessons learned. Delaying bills only makes the problem worse. Much worse. You would think legislators, and providers and would know that by now.
There is still a failure to face up to the problem.
- reform - Monday, Jun 20, 11 @ 3:25 pm:
IPI works closely with Cross. There’s not much nonpartisan there.
- Demoralized - Monday, Jun 20, 11 @ 3:32 pm:
Old Milwaukee,
The Medicaid payment cycle is not a new thing. The length of it is undesirable but it is not a new strategy. You will always have Medicaid bills that carry from one year to the next.
- steve schnorf - Monday, Jun 20, 11 @ 3:40 pm:
I rise solely to make this point. To all of those who thought/think we could have cut our way out of our budget problems without a tax increase, this really confirms the difficulty in cutting our way out of our problems WITH a tax increase.
- The Sky Is Crying - Monday, Jun 20, 11 @ 4:01 pm:
I have noticed more than a few comments here suggesting the blame for the states finances is owned by the republicans. How can this be when the legislature has been controlled by the democrats and MGM pretty much forever?
- Yellow Dog Democrat - Monday, Jun 20, 11 @ 4:42 pm:
== the legislature has been controlled by the democrats and MGM pretty much forever? ==
It probably seems that way to someone born in 2003.
- Vote Quimby! - Monday, Jun 20, 11 @ 4:56 pm:
==just a convenience to get mail==
How much think-tanking did that response take?
- Budget Watcher - Monday, Jun 20, 11 @ 9:27 pm:
…To another point, I’m not sure which approach the Admin takes toward the Medicaid approp makes much difference. Do you get paid timely for 9 months and then not at all for 3, or do you get paid 90 days late for 12 months? Either way the state spends its approp, and vendors wait; bleed a little every month, or bleed a lot for 3 months.
Actually it makes a huge difference. It’s a smarter move for the state to pay right at the prompt pay threshold (now 90 days) for as long as the appropriation will allow, and then shut it down entirely. The state would subsequently incur prompt pay penalties for a much shorter period of time, rather than incurring penalties all year long.
- steve schnorf - Monday, Jun 20, 11 @ 10:30 pm:
bw, good point, I didn’t think of in my dotage
- Jon Zahm - Monday, Jun 20, 11 @ 11:24 pm:
Proft does not do anything for free. Now we know why he is was an “unpaid” advisor to IPI. www.truthaboutproft.wordpress.com
It was interesting watching Tillman, Proft, and McKenna/Murphy playing footsie during the Governor’s race. The only thing the Proft campaign for Governor accomplished was fooling enough Tea Party people to pick Proft over Andrzejewski to keep Adam from winning the primary. And, for full disclosure, I worked for Adam in the primary so I saw the whole thing from a birds-eye view.