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Why the hostages sued

Thursday, May 5, 2016

* Mark Brown focuses on one of the plaintiffs in the $100 million lawsuit filed against the state yesterday by social service providers which have state contracts, but haven’t been paid because the governor vetoed their appropriations and nothing’s been accomplished since

[Metropolitan Family Services, which is owed nearly $2 million by the state] has already informed state officials and its own workers that it will discontinue four state programs serving 900 people if there is no state appropriation to fund them by June 30.

The programs slated for closing include small group homes for people with mental health issues, a counseling program for juveniles at risk of winding up in prison, mental health services for children under age 6 who have been the victims of severe trauma, and home visitation services for teenage mothers and their children. […]

Estrada said state officials were disappointed to learn of his agency’s plan to halt the four programs and urged it to continue to provide the services.

“They said, ‘Couldn’t you pay for this privately?’” Estrada said.

Estrada had to explain that private donations, which the organization already solicits, couldn’t possibly cover the gap.

This is the point where somebody always writes me to say the wealthy Rauner should just pay for it himself.

Sorry, even he doesn’t have enough money to fill all the holes created by his intransigence on the budget.

You could hardly find a more vulnerable population that mental health group homes, child victims of severe trauma, impoverished teenage moms and juveniles at risk of going to prison.

This stalemate needs to end.

* Tribune

Coalition chair Andrea Durbin said the state’s contracts with providers contain a clause that allows the state to cancel or suspend the contracts if there’s no money to pay for the services, but the Rauner administration instead kept the contracts going.

“We’ve been held accountable to the contracts. We’ve been asked to deliver services, to report our data, to participate in program oversight,” Durbin said. “You can’t with one hand ask people to do work and with the other hand deny them the ability to be paid.”

Durbin cast the lawsuit as “strictly a business case,” saying the state’s failure to make good on its debts to the providers has a ripple effect on banks, creditors and landlords who also do business with the providers.

* SJ-R

The lawsuit, which also targets the directors of the Department on Aging and the departments of Human Services, Public Health, Healthcare and Family Services and Corrections, claims Rauner created an “unconstitutional impairment” of the contracts in his June 25, 2015, veto because the administration subsequently insisted on enforcing contract terms despite having no money to pay.

The complaint also alleges the veto ruled out the normal remedy for such situations. Unpaid state bills go to the Court of Claims, which awards payment based on contracts backed by spending authorized by the governor.

The complaint demands immediate payment. No hearing has been scheduled.

- Posted by Rich Miller        

44 Comments
  1. - Honeybear - Thursday, May 5, 16 @ 10:14 am:

    I’m interested to see if this gets some legal traction.


  2. - wordslinger - Thursday, May 5, 16 @ 10:17 am:

    –Estrada said state officials were disappointed to learn of his agency’s plan to halt the four programs and urged it to continue to provide the services.

    “They said, ‘Couldn’t you pay for this privately?’” Estrada said.–

    What a brainstorm — the state will sign contracts with vendors and then ask them to find private sector money to pay for them.

    Laugh or cry?


  3. - CharlieKratos - Thursday, May 5, 16 @ 10:21 am:

    -Laugh or cry?-

    “…mental health services for children under age 6 who have been the victims of severe trauma”

    Cry.


  4. - RNUG - Thursday, May 5, 16 @ 10:21 am:

    My take on it is they sued because they are starting to realize they most likely will never get paid for the already delivered services.

    If nothing else, they may get a ruling the lack of an appropriation makes the contract null and void, and the State can’t insist on its continued enforcement.

    But that would be a double-edged sword because the court could also void any responsibility of the State paying for the already delivered services using the same logic since the vendors voluntarily continued to deliver the services.


  5. - Oswego Willy - Thursday, May 5, 16 @ 10:23 am:

    No matter the outcome (I’ll circle back, promise), the filing of the lawsuit did exactly one thing I knew it wanted to do…

    … Highlight who was to blame, why they hold Rauner and the agency heads accountable, and have media, be it print or otherwise, ask “why is there a $100 million lawsuit for these services now being filed, what are the circumstances as to the why?”

    The press can’t ignore $100 million in a filing, and they can’t leave it just as a filing. Questions are there to be answered.

    Circling back, the legal merits were questioned here yesterday and I’m sure the merits of the suit and payment will continue to be a large part of the discussion… but…

    … there’s a discussion, there’s one side pleading a case, and more people are learning how terribly dire things really are.

    Step One - Accomplished.

    We’ll see how Step Two plays out.


  6. - EconLady - Thursday, May 5, 16 @ 10:31 am:

    The agencies have wised up and are taking steps to protect themselves. They understand that the Exec. branch has zero intention of paying what is owed for FY 16.


  7. - Cassandra - Thursday, May 5, 16 @ 10:33 am:

    Why can’t the kids get their mental health treatment through the ACA. All legal resident children have access to health insurance in Illinois, by law. Health insurance should cover this kind of treatment. This is the mental health parity issue which is starting to get some traction, as I said yesterday, but the country is still way behind. If these kids needed treatment for, say, diabetes or another “physical” ailment, insurance would pay. Now we know the the line between “physical” and “mental” illness is an artificial one.

    State governments should start pressuring insurance companies on this issue. Illinois, alas, has a long history of not regulating insurance companies effectively. Campaign contributions, I suppose.


  8. - RNUG - Thursday, May 5, 16 @ 10:46 am:

    == Why can’t the kids get their mental health treatment through the ACA. ==

    A lot of the working poor can’t afford to buy the ACA insurance or work sponsored insurance. Taking my son as an example, it would require about 90% of his take home pay to buy the insurance for himself, his wife, and kids. Since they qualify, they are better off on Medicaid, even with all the coverage gaps there.


  9. - RNUG - Thursday, May 5, 16 @ 10:47 am:

    == Illinois, alas, has a long history of not regulating insurance companies effectively. ==

    That happens when you are home to a number of major insurance companies.


  10. - Mr How Ironic - Thursday, May 5, 16 @ 10:47 am:

    @Cassandra,

    As always you are so insightful, and on top of the news. If kids are on medicaid, they presumably DO have some sort of mental health coverage.

    The challenge is FINDING mental health providers that want to see patients for on average $.05-on the dollar.

    Most mental health professionals don’t even want to take commercially insured patients for several reasons (reimbursement being a high one). And there are also MANY reasons why those that have commercial insurance (let alone Medicaid) don’t want to bill their insurance.

    Get. A. Clue. There are not nearly enough mental health providers in Illinios. And to top it off, they don’t want to see patients that can’t pay for their services.


  11. - Norseman - Thursday, May 5, 16 @ 10:49 am:

    I’ve always been concerned that the providers and vendors who have been convinced, charmed or coerced into providing services on the promise of future payment would end up getting (expletive deleted). Rauner’s folks have played fast and loose with so many fiscal practices to keep the appearances the state was operating as normal as possible, it seemed inevitable that someone would end up on the short end of the stick.

    While expect a lot of audit findings to come out on improper procedures during this impasse, I hope beyond hope that the budget negotiations ensure these providers are made whole.


  12. - FirstTimer - Thursday, May 5, 16 @ 10:55 am:

    @Cassandra - These are contracted specialty services that are funded separately than the typical fee-for-service behavioral healthcare. Typically, insurance/Medicaid would not reimburse for the contracted services in question, which is why they are paid via contract rather than fee-for-service. Some of the services are not based on a mental health diagnosis, for example, services for homeless youth, so insurance or Medicaid reimbursement is not possible.


  13. - jack28 - Thursday, May 5, 16 @ 11:10 am:

    Honeybear: The Circuit Court does not have jurisdiction over actions for money against the State. Someone has played legal hocus pocus again.


  14. - Formerpol - Thursday, May 5, 16 @ 11:19 am:

    ‘Immediate payment’ from what fund? They might get a judgment against a bankrupt entity, which they can paper on their walls! I have many of these kinds of judgments!!


  15. - Pawn - Thursday, May 5, 16 @ 11:25 am:

    Formerpol, the state cannot declare bankruptcy. Please keep up.

    Are people really arguing that Illinois should not honor legal contracts? If this group loses, doesn’t that call into question every single contract the Rauner administration has issued?


  16. - RNUG - Thursday, May 5, 16 @ 11:27 am:

    The lawsuit as filed in State court is pretty much a Hail Mary. The only point I see where they have a slim chance is the claim the State entered into contracts after Rauner’s veto knowing the State / agency had no appropriation for the contract; they MIGHT have a fraud claim there.

    Reading the filing, I got the impression it was written to be filed in a Federal court, not State. Wonder if that is the plan for when the State courts reject it?


  17. - CCP Hostage - Thursday, May 5, 16 @ 11:30 am:

    If Pay Now Illinois loses, any contract issued by the state of Illinois essentially becomes a mandate for a provider to provide services with no guarantee of payment. Ever. Do we really want our government to have the power to contract for services without obligation to pay? The implications of the decision on this lawsuit are far reaching.


  18. - Demoralized - Thursday, May 5, 16 @ 11:30 am:

    ==Are people really arguing that Illinois should not honor legal contracts?==

    I don’t think anyone is arguing that. The debate is about proper venue.

    ==doesn’t that call into question every single contract ==

    The Supreme Court pretty well decided that issue when they ruled on the back pay issue. No appropration. No pay. The union had a legal contract but the court ruled it could be trumped if there was not an appropriation.

    Also, every contract contains a provision that makes them subject to appropriation.

    Let me be clear. I think these providers should be and need to be paid.


  19. - Norseman - Thursday, May 5, 16 @ 11:31 am:

    === Reading the filing, I got the impression it was written to be filed in a Federal court, not State. Wonder if that is the plan for when the State courts reject it? ===

    RNUG, you might be on to something. I don’t see the state court granting relief.


  20. - RNUG - Thursday, May 5, 16 @ 11:39 am:

    == Reading the filing, I got the impression it was written to be filed in a Federal court, not State. ==

    On second thought, I wonder if that isn’t what Rauner wants? Get a failure to pay case into federal court and try to use it to spin the State into bankruptcy regardless of Federal Law. That’s kind of how Detroit ended up in bankruptcy; things were proceeding smoothly in Michigan State courts when the special administrator jerked the rug out from under the proceedings by jumping into Federal court right before the scheduled State courts hearing.

    Or maybe I need to take off my tinfoil hat?


  21. - Casual observer - Thursday, May 5, 16 @ 11:47 am:

    RNUG,
    You’re scaring me.


  22. - CCP Hostage - Thursday, May 5, 16 @ 11:52 am:

    The decision on this lawsuit, if it goes against Pay Now Illinois, will seal the fate of vulnerable people in the future. If the government chooses to use social services providers as a bargaining chip again, with a negative decision on paying us in the books, it will be doubtful if providers will be willing to amass the huge amount of debt we all carry to continue to serve. Further, nonpayment of our FY 16 bills will bankrupt most of us, destroying the social services network in Illinois.


  23. - jack28 - Thursday, May 5, 16 @ 12:22 pm:

    RNUG: There is the Eleventh Amendment and sovereign immunity. Federal courts do not have jurisdiction to award money judgments against state treasuries.


  24. - RNUG - Thursday, May 5, 16 @ 12:34 pm:

    - jack28 -

    I agree in theory but that may not stop them from determining the validity of the contract. And we’ve had federal courts intervening in lots of what should be States rights stuff.


  25. - What the What - Thursday, May 5, 16 @ 12:51 pm:

    Lawsuits are sometimes filed where the real goal isn’t some judicial relief, but rather creating leverage for a larger business issue. The goal of this lawsuit is to get these social service providers paid sooner, and this lawsuit may very well add to the pressure on the administration to (A) get a budget and (B) ensure it includes payment of these contracts. (I share the concern of others that the administration may want to stiff these organizations)


  26. - Honeybear - Thursday, May 5, 16 @ 1:26 pm:

    CCP- that is really what I am afraid of. The total destruction of social services is nearing completion. Why would he have to cut them when this is done. I am beginning to feel that this was the Darth Arduin plan all along. No one ever saw this coming. Who would think that one person could ever be so callous, perfidious, and unethical. No one could have know. I know that is no consolation for you. May God bless your work. All I can do is pray and fight as I can, change perceptions which utilizes the little power I have. Merit has (almost) no meaning. We must “vote accordingly” and we must work power to were others vote accordingly with us.


  27. - CCP Hostage - Thursday, May 5, 16 @ 1:31 pm:

    I’m afraid you’re right, Honeybear. And I’ve watched wordslinger come to this conclusion as well. The goal is total destruction. My hope is that the courts will use this lawsuit to stop the destruction, even if they have to be creative to make it happen. I watch the comments of very knowledgeable people on this blog about the lawsuit and fear they may be right. I am praying they are not, and of course, I will vote accordingly.


  28. - Cubs in '16 - Thursday, May 5, 16 @ 1:42 pm:

    This makes a good argument for a complete shutdown if approps have not been made by July 1st of any year.


  29. - Political Animal - Thursday, May 5, 16 @ 1:57 pm:

    Everyone should be against this law suit.

    As I said before, states are sovereign and it is in the power of the political branches, not the courts, to tax and spend.

    The Consent decrees are already bad enough. Workers getting paid with no budget is bad enough.

    I AM a state worker and I don’t think I should be getting paid right now. I should be furloughed until there is an appropriation for my salary.

    If Courts can decide where the tax dollars go, why do we even have elected representatives?

    Rauner and the Dems are both wrong on this.

    No budget should mean a complete and total shut down.

    If that was the case, you’d never have a budget impasse last this long.


  30. - Oswego Willy - Thursday, May 5, 16 @ 2:11 pm:

    - Political Animal -

    Keep up, please…

    Rauner is the one wanting state workers paid, while he, Rauner, vetoes Approps, like funding state government and getting vendors paid

    Rauner choices.

    Vetoes are governors.

    Your continued willful ignorance to events and consequences is tiring.


  31. - Skirmisher - Thursday, May 5, 16 @ 2:25 pm:

    If the suit had specified the State of Illinois, then I would take it seriously, even though the courts have already made it clear that No Appropriation equals No Money. Since it specified Gov. Rauner and his appointees, I have to assume that this is nothing more than another example of the cynical partisan theater at which the politicos in this state excel.


  32. - Say It Ain't So!!! - Thursday, May 5, 16 @ 2:32 pm:

    July 1st: bus loads of people from the closed group homes get dropped off at the Governor’s mansion.


  33. - CCP Hostage - Thursday, May 5, 16 @ 2:47 pm:

    Say…good idea, but we sold the busses to pay the light bill.


  34. - Pawn - Thursday, May 5, 16 @ 3:27 pm:

    Skirmisher: A breach of contract lawsuit MUST be between the two parties of the contract. The “State of Illinois” is not a signer on the contract: The Governor and his designees are. Therefore they must be the defendants. It’s logic, not partisanship.


  35. - RNUG - Thursday, May 5, 16 @ 3:29 pm:

    == The Governor and his designees are. ==

    Adding, the suit explicitly stated the various officials were being sued in their OFFICIAL capacity, IE, as State officials.


  36. - Norseman - Thursday, May 5, 16 @ 3:32 pm:

    Skirmisher, they name the people in their official capacity with the State of Illinois. Sorry to rain on your parade.


  37. - Give Me A Break - Thursday, May 5, 16 @ 3:50 pm:

    Skirmisher: Take a look at the names of the various consent decrees, the names start with whoever the Gov is at the time and the applicable state agency heads.


  38. - Mama - Thursday, May 5, 16 @ 4:39 pm:

    ” There are not nearly enough mental health providers in Illinios. And to top it off, they don’t want to see patients that can’t pay for their services.”

    Whatever happened to the doctor’s oath, “First do no harm.”?


  39. - Pawn - Thursday, May 5, 16 @ 4:51 pm:

    mama, no one can be forced to work for free. We fought a civil war about that.


  40. - Mama - Thursday, May 5, 16 @ 4:54 pm:

    Is this the crisis Rauner and Madigan have been waiting for?


  41. - Mama - Thursday, May 5, 16 @ 4:59 pm:

    “Formerpol, the state cannot declare bankruptcy. Please keep up. ”

    The Feds are planning to change the law to allow states to declare bankruptcy.


  42. - Oswego Willy - Thursday, May 5, 16 @ 5:16 pm:

    ===The Feds are planning to change the law to allow states to declare bankruptcy.===

    But… They haven’t…


  43. - RNUG - Thursday, May 5, 16 @ 7:30 pm:

    -Mama-

    Some people want the Feds to change the law to allow states to declare bankruptcy. They are trying to use the mess in Puerto Rico as the camel’s nose under the tent wall … but it hasn’t happened yet, and may not. The 1.4% want the bonds protected and the courts are, so far, pretty much protecting the retirees and citizens instead. Going to be interesting if the 1.4% keep pushing bankruptcy and win but then lose by having bonds have to get in line with everyone else. Even if they win, the bill could be drawn to only apply to US Territories, not States.


  44. - RNUG - Thursday, May 5, 16 @ 7:33 pm:

    == Is this the crisis Rauner and Madigan have been waiting for? ==

    We’ll know when the Lynch mobs descend on the Governor’s Mansion and the State Capitol.


Sorry, comments for this post are now closed.


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