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Appellate court rules against social service providers

Thursday, Jun 15, 2017

* Background is here. Press release…

The Appellate Court dismissed today the Pay Now Illinois coalition suit. A statement from Pay Now Illinois Chair Andrea Durbin is just below.

We are terribly disappointed in today’s ruling from the Appellate Court.

The Appellate Court has directed providers to the Court of Claims for relief. This is at best a theoretical, not a practical remedy. Even prior to the destructive budget impasse, human service providers routinely waited years for a judgement, and then had to wait for a subsequent appropriation to be paid. This process could literally take three, four, or even five years. When providers are due payment for service from an entire year or more, waiting for half a decade for payment does nothing to help providers meet payroll and pay their bills today. Further, the Court of Claims is in no way equipped to handle the massive filings that would result if all providers and vendors who are owed money from the State of Illinois sought relief through this means.

Providers contemplating contracts for FY18 should consider the state of affairs as it exists today. We have no budget for FY17 or FY18, the partisan warfare continues in Springfield, and at this point we have a total breakdown in the functioning of our state. This decision helps to remove some of the uncertainty that providers have faced over the past two years.

Pay Now Illinois still has a case pending in St. Clair County. We expect a decision shortly and certainly hope for a different outcome. We will also evaluate our next steps as a coalition; we have tried to go directly to the Illinois Supreme Court before and will consider whether to pursue that option again.

The real losers from today’s decision are the children, youth, families, and communities we serve – the elderly, the disabled, the homeless, people with mental health needs, or people who are addicted, victims of sexual assault or domestic violence, youth who run away from home or who are in trouble with the law – as well as the hundreds and thousands of employees who come to work each day trying to keep people safe, healthy, and able to achieve their potential. No one should rejoice in this decision.

* The ruling is here.

…Adding… Law Bulletin

The panel rejected the coalition’s assertions that Rauner has acted beyond his gubernatorial authority by entering into contracts which weren’t funded, and then vetoing the appropriations bills that would have funded them.

“The governor was not obligated to approve any or all portions of appropriations bills by the General Assembly,” Justice Eileen O’Neill Burke wrote in the 35-page opinion on behalf of the three-judge panel. “Indeed, both the governor and the General Assembly are constitutionally constrained to propose or pass budgets and appropriations that do not exceed estimated available funds.”

- Posted by Rich Miller        

30 Comments
  1. - RNUG - Thursday, Jun 15, 17 @ 12:35 pm:

    Disappointed but not surprised.


  2. - Oswego Willy - Thursday, Jun 15, 17 @ 12:45 pm:

    Terribly disappointing.

    Signed contracts with no intent on paying them, and no recourse for abiding by your end of the contract… and it’s the doing of social service work, no less…

    Very sad.

    My best to the coalition, and to Ms. Durbin.


  3. - No Raise - Thursday, Jun 15, 17 @ 12:45 pm:

    I would hope that any provider of goods or services to the state be given notice by CMS of the repayment scenario and that the provider sign off on this. Can’t believe any providers are unaware of this claims-delay situation but at least if they sign off that they will accept their 9% interest with understanding of the payment delay it would indicate some level of fundamental fairness and knowledge.


  4. - Rich Miller - Thursday, Jun 15, 17 @ 12:47 pm:

    ===Terribly disappointing===

    I feel bad for them. But if the courts allow bills to be paid without legislative appropriations, then the governor would have limitless spending powers. Not a good thing.


  5. - Andrea Durbin - Thursday, Jun 15, 17 @ 12:51 pm:

    No Raise, most of us do not get prompt pay interest. We have passed a bill this year to promote Prompt Pay Equity, but have heard that the Governor will veto on the basis of “we can’t afford it.” That did not stop the GA from passing (by a much wider margin) a bill to give utility companies prompt payment interest. Just thought you would like some facts.


  6. - Oswego Willy - Thursday, Jun 15, 17 @ 12:54 pm:

    ===I feel bad for them. But if the courts allow bills to be paid without legislative appropriations, then the governor would have limitless spending powers. Not a good thing.===

    Yep. Agree. That’s why I find it disappointing.

    The importance of the budgetary process and following the governing principle, that is more important, well beyond today and the ruling.

    I’ll be anxious to watch other rulings that are along this parameter too.


  7. - RNUG - Thursday, Jun 15, 17 @ 1:06 pm:

    So … now it’s going to be interesting to see if the Illinois Court of Claims will agree the contracts are valid or will claim the non-appropriation exception.


  8. - Mama - Thursday, Jun 15, 17 @ 1:43 pm:

    Can someone tell me if this ruling will apply to everyone (including doctors and dentist)whom contracted with the state & provided services, but they have not been paid?
    Thanks


  9. - RNUG - Thursday, Jun 15, 17 @ 1:51 pm:

    == Can someone tell me if this ruling will apply to everyone (including doctors and dentist)whom contracted with the state & provided services, but they have not been paid? ==

    This case was mostly about the Social Service agencies​. I assume you are referring to the Group Insurance issue, which is different.

    Specifically to the Group Health issue, the doctors, etc. are getting paid … just up to 2 years late because there is not enough cash.


  10. - Helpless and hopeless - Thursday, Jun 15, 17 @ 2:00 pm:

    “I feel bad for them. But if the courts allow bills to be paid without legislative appropriations, then the governor would have limitless spending powers. Not a good thing.”

    Obviously, the Governor already has “limitless spending powers.” He can keep issuing contracts knowing that they never have to be paid. Where’s the limit on that? Doesn’t that matter to anyone? Where’s the check on the executive branch’s power? For the record, the legislature attempted to appropriate on multiple occasions only to have it vetoed. Even when legislators talk about appropriations, it gets shut down unless it’s attached to “reform.” Here’s some business friendly reform. Don’t issue useless contracts. Don’t allow the stealing of good and services simply because it’s the government doing it. Don’t lie to voters saying you want IL to be compassionate. It’s not compassionate (or ethical) to tell “taxpayers” you are fighting for us when you’re running up billions in bills that we’ll ultimately pay at higher and higher interest rates as our state tumbles to junk bond status. It’s not compassionate for the Exec to say he feels badly for social services providers when he could stop stealing from those agencies, their employees, their clients, and their communities.


  11. - No Raise - Thursday, Jun 15, 17 @ 2:04 pm:

    Unclear on the prompt pay interest comment. Isn’t it true that providers receive 9% on claims 30 days after submission of and/or approval of invoice? CMS advises that medical providers certainly receive this. Please clarify.


  12. - Andrea Durbin - Thursday, Jun 15, 17 @ 2:16 pm:

    No Raise. Only certain providers are eligible for the Prompt Pay interest under the statute. Many are excluded, including all youth service and child welfare providers.


  13. - titan - Thursday, Jun 15, 17 @ 2:32 pm:

    +++ - Helpless and hopeless - Thursday, Jun 15, 17 @ 2:00 pm: … He can keep issuing contracts knowing that they never have to be paid. … +++

    Prior appropriation laws go back into the 1800s, and used to be ultra-rigorously enforced. Vendors need to be aware of the risk of performing services or providing goods if there is no prior appropriation for their contract.


  14. - LTSW - Thursday, Jun 15, 17 @ 2:34 pm:

    Not good news for state employees if you extend the appellate courts reasoning to the employee pay case.


  15. - Helpless and hopeless - Thursday, Jun 15, 17 @ 2:36 pm:

    No Raise. Plus, for those human service providers that are eligible, the interest doesn’t even start until 90 days past due. Don’t you wish you could get that deal from your cable, credit card, utilities companies!


  16. - Amalia - Thursday, Jun 15, 17 @ 2:54 pm:

    feel badly for them, but not only is Justice Burke (this one) smart, but she’s a Dem! sometimes the case does not match the need.


  17. - WWGD - Thursday, Jun 15, 17 @ 2:57 pm:

    Just the worst news ever. All one can do is pray. They are hurting the weak, poor and disabled. So, sad.


  18. - No Raise - Thursday, Jun 15, 17 @ 3:10 pm:

    Thanks for the clarification. I always said that if the constitutionally-protected were not safe from non-payment, then what protection would a vendor even have for default on a regular claim? It’s turning into economic anarchy, but at least vendors have the option of not doing business with the state. Retirees and employees with health insurance claims are stuck.


  19. - RNUG - Thursday, Jun 15, 17 @ 3:27 pm:

    == Unclear on the prompt pay interest comment. Isn’t it true that providers receive 9% on claims 30 days after submission of and/or approval of invoice? ==

    Where it does apply, 1% per month after first 3 months (90 days).


  20. - Seats - Thursday, Jun 15, 17 @ 3:34 pm:

    RNUG - if a state employee turned in a travel voucher in January of 2016 but the comptrollers office said it wasn’t received until January of 2017; and as of June it still hadn’t been paid out. Would that employee be eligible to receive interest on his payment? Thanks


  21. - Bigtwich - Thursday, Jun 15, 17 @ 3:52 pm:

    If I recall correctly, if you win in the Illinois Court of Claims you are not paid until the legislature appropriates the money.


  22. - No Raise - Thursday, Jun 15, 17 @ 3:55 pm:

    RNUG— Do you have any information whether CMS formally notifies providers about the claims delay before the providers sign a contract to provide goods or services to the State, including group health services? Thank you.


  23. - RNUG - Thursday, Jun 15, 17 @ 4:44 pm:

    == Would that employee be eligible to receive interest on his payment? ==

    I have no idea of the current process or rules. Been gone too long.


  24. - RNUG - Thursday, Jun 15, 17 @ 4:46 pm:

    == RNUG— Do you have any information whether CMS formally notifies providers about the claims delay before the providers sign a contract to provide goods or services to the State, including group health services? ==

    Same answer as above, been gone from CMS too long.


  25. - RNUG - Thursday, Jun 15, 17 @ 4:48 pm:

    == If I recall correctly, if you win in the Illinois Court of Claims you are not paid until the legislature appropriates the money. ==

    That’s my understanding also, based on when a relative represented their agency in Court of Claims cases.


  26. - RNUG - Thursday, Jun 15, 17 @ 4:52 pm:

    == Would that employee be eligible to receive interest on his payment? ==

    Adding … back when I was turning in travel vouchers, I don’t recall ever getting any interest regardless of how long it took to get paid … but back then it was rare for a travel voucher payment to be more than 3 or 6 months after submission.


  27. - My New Handle - Thursday, Jun 15, 17 @ 5:21 pm:

    Caveat emptor. A fraudulent governor will sign only fraudulent contracts.


  28. - Union Man - Thursday, Jun 15, 17 @ 7:58 pm:

    State Employees are On Deck!


  29. - Living it daily - Friday, Jun 16, 17 @ 12:08 am:

    I wonder if BVR paid the multi state Lottery pot to stay in again like last year, (without an appropriation)?


  30. - A doctor who cares for Illinois incarcerated - Friday, Jun 16, 17 @ 3:06 pm:

    Physicians are specifically excluded from the Court of Claims.


Sorry, comments for this post are now closed.


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