On May 31, 2017, House Resolution Number 100 was adopted and directed the Office of the Auditor General to conduct an audit of Medicaid Managed Care Organizations (MCOs), which included a comparison of State expenditures between MCOs and the Medicaid fee-for-service program for fiscal year 2016.
The audit found:
Auditors determined that the Department of Healthcare and Family Services (HFS) did not maintain the complete and accurate information needed to adequately monitor $7.11 billion in payments made to and by the 12 MCOs during FY16.
Specifically, HFS could not provide auditors with the following information:
* all paid claims to Medicaid providers by the MCOs in FY16;
* Medicaid provider claims denied by MCOs in FY16;
* the administrative costs incurred by MCOs in FY16;
* the coordinated care costs incurred by MCOs in FY16; and
* Medical Loss Ratio (MLR) calculations since calendar year 2012.
* In FY16, HFS made multiple monthly capitation payments to MCOs for the same months for the same individuals totaling $590,237.
The audit recommends HFS should:
1) monitor the actual administrative costs incurred by its MCOs to ensure that the administrative costs do not exceed what is allowed by contract;
2) calculate the Medical Loss Ratios for the previous four calendar years (2013 through 2016), and determine whether the State should be reimbursed by MCOs due to overpayment;
3) require all MCOs to submit all Medicaid provider payment data for all services (including DASA, LTC, and waiver services), and perform on-site reviews of the MCOs’ financial data systems and test the completeness and accuracy of the data reported to HFS that is used to monitor the payments made to Medicaid providers;
4) provide clear guidance to the MCOs for reporting denied claims, and ensure that MCOs provide the denied claims to HFS as required by contract;
5) ensure multiple monthly capitation payments are not being made for the same Medicaid recipients, immediately identify and remove all duplicative recipients from its eligibility data, and recoup any overpayment of duplicate capitation payments; and
6) ensure that it effectively monitors the newly awarded MCO contracts to ensure compliance with all contractual provisions.
I just read the Auditor General’s performance audit of the FY 16 MCO contracts. The most damning part of the report is the conclusion that ‘HFS did not maintain the complete and accurate information needed to adequately monitor $7.11 billion in payments made to and by the 12 MCOS during Fiscal Year 16.’
This is another example of the hypocrisy of Governor Rauner. He runs around the state claiming to be a fiscal conservative, but his real record as Governor reflects extreme financial mismanagement.
Gov. Rauner: I am not. So, to be clear, my assets, all my investments are in a trust that I don’t control. I did that when I became governor. I can’t comment on any business disputes. That gets settled in its own process.
Reporter: Is that the reason why it’s sealed because it’s through a blind trust?
Gov. Rauner: I can’t even tell you, I mean, I don’t really have much to do with that.
Reporter: Is there attorneys who are doing that?
Gov. Rauner: I assume. I don’t know.
Rauner aide: Alright, thanks everyone.
He didn’t know anything about it and didn’t have much to do with it, eh?
Rauner invested $5 million as a limited partner in Kirkpatrick Capital to acquire a minority share in United Shore Financial Services, LLC (”United Shore”), a privately held mortgage lender.
Rauner received an exceptional return on that investment which was made possible by a settlement of two distinct disputes with United Shore—a personal bonus claim brought by Kirkpatrick against United Shore and derivative claim brought by Kirkpatrick Capital against United Shore. This parties’ dispute concerns the allocation of those settlement proceeds. Rauner’s share of the settlement proceeds turned his $5 million investment into more than $20 million.
This $15 million gain, however, apparently is not enough for Rauner. Rauner now seeks to cut-off Kirkpatrick, in a confidential arbitration closed to public scrutiny, from his fair share of the settlement proceeds by seeking to ensure his own, self-serving interpretation of the United Shore settlement agreement (even though he is not a party to it). Rauner seeks to use Kirkpatrick Capital’s partnership agreement as a shield in the proceeding, alleging that his claims arise under Kirkpatrick Capital’s partnership agreement (which has an arbitration clause). Rauner’s claims, however, do not arise from the partnership agreement, but instead from the settlement agreement (which requires litigation in this Court) and therefore must be heard in this Court. […]
Kirkpatrick specifically kept Rauner informed throughout the litigation regarding his objectives in terms of a return on Rauner’s investment and the allocation of the settlement proceeds. At an in-person meeting in Springfield, Illinois, on May 11, 2015, on the back porch of the Governor’s mansion, Kirkpatrick laid out his expectations regarding the return to Kirkpatrick Capital from a settlement and the allocation of the settlement. These expectations were updated and communicated at a second in-person meeting between Rauner and Kirkpatrick at the Chicago Club on the evening of September 15, 2015. At neither meeting did Rauner object to the proposed allocation of the settlement proceeds, nor the return on his investment he would receive. […]
Rauner’s total proceeds from the United Shore investment were approximately $20 million, with $15 million of that being profit.
In the summer of 2017, after receiving all payments due to him, Rauner filed a demand for arbitration before the American Arbitration Association that the settlement agreement precludes Kirkpatrick Capital’s allocation of the United Shore settlement proceeds and claiming that Kirkpatrick and the Kirkpatrick Capital breached and interfered with the LPA.
Tellingly, Kirkpatrick Capital’s other two investors, Ganzi and Chaifetz—who are seasoned and sophisticated equity investors did not dispute or take issue with Kirkpatrick Capital’s allocation of the settlement proceeds.
Also, Politifact took a look at the “blind trust” angle. Click here. The topic will likely be revisited now that an allegation has been made that Rauner took an active role in his investments while he was governor.
*** UPDATE 1 *** Biss campaign…
“This is why we need to be careful when a billionaire uses the word “trust” colloquially. From Rauner’s investment scams to JB Pritzker and Chris Kennedy’s tax scams, it’s getting hard to tell these guys apart.” - Tom Elliott
*** UPDATE 2 *** Pritzker campaign…
Today, a judge unsealed Kip Kirkpatrick’s lawsuit against Bruce Rauner, shedding light on a business dispute Rauner had previously claimed to have no involvement in and no knowledge of.
The lawsuit details Bruce Rauner’s maneuvers as governor to maximize returns on a $5 million investment he had made in Kirkpatrick Capital. Kirkpatrick claims to have met repeatedly with Rauner, including once at the governor’s mansion, regarding his business interests despite Rauner’s claim to the public that “all my investments are in a trust that I don’t control.”
“Bruce Rauner is allegedly conducting private business out of the governors’ mansion and then openly lying about it to the public,” said Pritzker communications director Galia Slayen. “It is no wonder this failed governor tried to keep this lawsuit sealed, but now that it’s public, it is time for Bruce Rauner to tell voters the truth.”
*** UPDATE 3 *** Kathleen Murphy at the Jeanne Ives campaign…
“Lying and screwing people out of their money is apparently a practice Bruce Rauner brought with him from his dealings in the private sector to his dealings as Governor.”
* Rumors circulated last April that the Franklin Center for Government and Public Integrity was shutting down. Not so, the Franklin Center claimed…
“The Franklin Center has not shut down; it continues to operate and we expect growth as we progress through 2017,” said Franklin Center spokeswoman Laurel Patrick, who previously worked for Walker. “In order to achieve this growth, it is undergoing a reorganization.”
She said that the center had appointed new leadership. John Tillman, the CEO of the Illinois Policy Institute, has been named the new chairman, and Chris Krug, the publisher and general manager of the Illinois News Network and Illinois Radio Network, has been named president, Patrick said.
Krug replaces Nicole Neily, who was in the job for only a year.
“Watchdog.org will continue, and we are committed to growing that brand,” Patrick said. “The new management team will be working with all current and former employees in the coming week to find the right path forward for each person and Franklin.”
Lots of familiar names in that piece. Laurel Patrick, you will recall, was brought in last July as Gov. Rauner’s director of communications during the first round of staff purges. She was purged by late August.
* And then this press release went out today…
Franklin Center for Government & Public Integrity announced today that it acquired the Illinois News Network (INN) from the Illinois Policy Institute, and will utilize INN as the template for an initiative at Watchdog.org to improve statehouse coverage nationwide.
INN – a non-profit, non-partisan news service that reports on state, regional and local issues and distributes its content from the digital hub ILNews.org – continues to attract new partners, and delivered content to 139 media outlets across Illinois in 2017.
ILNews.org published nearly 1,600 news stories in 2017, and legacy media companies republished more than 1,300 of them in their print and digital editions.
Chicago Tribune Media Group, Hearst Newspapers, Lee Enterprises, McClatchy, Paddock Publications and Shaw Media are among the legacy news companies whose newspapers and digital sites published INN’s reporting in 2017.
Franklin Center’s Watchdog.org project is a non-profit, non-partisan journalism initiative that seeks to improve the accuracy, balance and quality of statehouse news reporting across the United States.
“Acquiring INN is precisely the right next step for the future of Watchdog.org,” Franklin Center President Chris Krug said. “INN has become an essential read for Illinoisans. Our focus now moves to bringing that same journalistic energy, focus and timeliness in highly consumable news packages to readers across the country.”
Krug, named president of Franklin Center last April, has served as publisher and general manager at INN since 2016. INN was launched by IPI in 2013, and operated as an independent project prior to acquisition by Franklin Center.
Krug said that accuracy, consistency and speed have made ILNews.org a trusted statewide reporting service for media companies seeking balanced coverage in their daily reports.
“ILNews.org established itself over the past two years as a trusted source for high quality, state-focused journalism created specifically for an Illinois audience,” he said. “We weigh in on important issues every day at INN. It’s that core approach and daily execution that will benefit Watchdog.org in other states.
“Each state will require a customized approach, but will benefit from INN’s operational excellence and efficiency. We begin with an incredible core group of journalists in Illinois who will mentor and train our national editors, reporters and contributors.
“Statehouse news coverage is in need of attention and manpower across the country. Legacy media is hurting everywhere, and the resources allocated to covering state legislatures have dwindled substantially. Contextual coverage of statehouse news is the proverbial donut hole in local news coverage. The expertise we have demonstrated in Illinois will allow us to bring truth to light elsewhere, and bridge the gap for readers in states across the country,” Krug said.
Dan McCaleb, News Director at INN, was named News Director for Watchdog.org. McCaleb will focus on building each of the forthcoming Watchdog.org state news teams.
“Dan has uncommon drive,” Krug said. “He has a true passion for finding the truth. He is an excellent news leader and manager who understands and meets the expectations of readers in the digital age. The editors and reporters Dan recruits into the Watchdog.org project will raise the bar for statehouse reporting nationwide.”
During 2017, the CEO of Illinois Policy assumed the chairmanship of the Franklin Center, another 501(c)(3) not for profit organization, and the board of directors of that organization was reconstituted. Also during 2017, a for-profit subsidiary of the Franklin Center, named American Media Unlimited, was established. During 2017, the assets of the Illinois Radio Network, currently owned by the Institute, will be transferred to American Media Unlimited.
*** UPDATE *** If you click here, you’ll see American Media Unlimited’s latest state corporate filing. John Tillman is listed as the company’s secretary.
Citizens for Rauner Launches Petition for Release of All Pritzker-Blagojevich Tapes
Since JB Pritzker says he was “never accused of wrongdoing,” he should have no problem with the rest of the FBI wiretap tapes being released. We have a petition just for him, and we invite him to sign it himself. Even Patti Blagojevich, the former governor’s wife, has called for the full tapes to be released.
Today, Citizens for Rauner is starting a petition to release ALL the recordings of conversations between Pritzker and disgraced former governor Rod Blagojevich caught on FBI wiretap. This comes after the release of the full, unedited 11 minutes of conversations previously published by the Chicago Tribune.
As is widely known, the main evidence used to convict former governor Rod Blagojevich, and send him away to prison for 14 years was his private conversations with his aides, wife and brother. The conversations were secretly recorded by the government in late 2008, over eight separate phone lines, including the governor’s home phone and campaign office.
But only a tiny fraction of these tapes have ever been released despite the governor’s repeated demand that the government “release them all.”
There are literally hundreds of hours of Blagojevich tapes that the people of Illinois have never heard. When I first came onto the governor’s case in 2011, I put all of these recordings onto my ipod and spent weeks listening. I can assure you that these tapes tell a very different story about the governor than the story told by the federal prosecutors.
At trial, the government played for the jury cherry-picked excerpts of its tapes — the ones that fit its narrative that the governor tried to sell the senate seat for personal gain and betrayed the people of Illinois. In response, Blagojevich argued that the deal he tried to make for the senate seat was for the benefit of the people of Illinois, not for himself.
Blagojevich argued that he tried to negotiate a deal to appoint Lisa Madigan to the Senate in exchange for Speaker Mike Madigan’s cooperation in enacting the governor’s legislative priorities, including an infrastructure bill and healthcare reform.
Government lawyers, however, convinced Judge James Zagel to exclude the tapes in which Blagojevich discussed the Madigan deal. Then, in closing argument, the lead prosecutor deceptively told the jury to “go back and look at the calls and see how many times Lisa Madigan is actually mentioned … and you’re not going to find it.”
As the prosecutor well knew, the reason the jury couldn’t find these tapes is because the court had excluded them, at the government’s request. […]
Readers will note that this newly leaked tape illustrates exactly what Blagojevich tried to tell his jury – that the primary aim of his deal-making was to make a deal with Madigan to get a “capital bill” (to pay for new and repaired infrastructure) and “health care” reform through Madigan’s House. But the jury never heard this tape. Nor did it hear dozens of other similar taped conversations where Blagojevich worked towards a deal with Madigan.
I recently spoke with the former governor, and his response to this latest episode of selective leaking by the government of his private calls is both consistent and predictable: The government should “release them all.”
As I’ve said many times before, Blagojevich’s plan was pure fantasy. But this is a pretty clever little move by Rauner. He ain’t going down without first waging the fight of his life.
I’ve asked the Pritzker, Kennedy and Biss campaigns for comment.
*** UPDATE 1 *** Chris Kennedy campaign…
If there is nothing wrong or untoward in those FBI tapes, then this is something JB Pritzker should welcome too.
*** UPDATE 2 *** Daniel Biss campaign…
“It’s another day of team Kennedy-Rauner squaring off against team Pritzker-Blago. We can do so much better than this.” -Tom Elliott
Zing!
*** UPDATE 3 *** Pritzker campaign…
Bruce Rauner is continuing to play politics in the Democratic primary so he can distract from his disastrous record as governor. Instead of falling for Rauner’s ploy, Democrats should focus on calling out his failures. This includes refusing to release documents and emails related to how 13 Veterans and spouses lost their lives due to his fatal mismanagement in Quincy, attempting to keep lawsuits against him sealed, and rejecting standard FOIA requests of his administration.
Reporter: Governor, there’s a new debt transparency report that the comptroller’s office put out, and it shows that there’s going to be a $2.3 billion shortfall for this year. That seems about on par with some of the numbers that you’ve given. We’re about half way through the fiscal year, what are you gonna do about it?
Gov. Rauner: Propose a balanced budget, actually propose a process to begin to roll back the tax hike that was passed over my veto last summer. We need to…
Reporter: That’ll be in this year’s budget address?
Gov. Rauner: Correct. Unfortunately, in the budget that was passed over my veto last summer, not only was there a very large income tax increase, but there was spending that was even out of balance even after the tax increase. We have been fiscally irresponsible again. So, we’re gonna propose changes into our government operations to reduce wasteful spending so we can put more money into education. I’m gonna propose even more record funding for our schools around the state to support our teachers and our students. But change other things in the system. Pension changes and healthcare changes so that we can reduce the cost of government so we can put more money into our schools and our students.
Reporter: So, just to be clear, in this budget address you’re going to take care of a balanced budget for FY19, the $2.3 billion shortfall for FY18 and more money for education while also doing away with an income tax increase? All of those?
Gov. Rauner: We’re gonna step down, it’s gonna take a few years, we’re gonna step down the income tax increase and put more money in education and shrink the wasteful spending in government and close this deficit. This is, we’ve had a deficit now for years and even after a tax hike there’s still deficits. It’s financially irresponsible.
*** UPDATE *** Rep. Jeanne Ives…
“No one should believe Governor Rauner’s statement on stepping down the tax increase. First, everyone knows that the Governor was actually in favor of a tax increase. He openly stated as much when he took office. Secondly, the tax increase is permanent. So it would take legislative action to change the tax rate, which will be nearly impossible under the current Democrat leadership. Once again, Governor Rauner is making promises he can’t keep.
“The truth is Governor Rauner publicly removed himself from negotiations over the summer when the tax increase occurred. He didn’t make phone calls to Republican members or make any attempt to hold the caucus together on the most important vote of his tenure – the largest permanent tax increase in state history. Governor Rauner is right about one thing: he is not in charge.”
“Ending the tax increase by the end of his second term just as he promised to do at the end of his first? Fool me once…”
* Democratic attorney general candidate Aaron Goldstein hasn’t raised much money on his own ($6500 last quarter), but he did loan himself $185,000 and now he wants to spend it…
Aaron Goldstein’s campaign for Illinois Attorney General has released a preview of its new television commercial, entitled “Standing Next to You.” It is part of an aggressive $100,000 ad campaign which will be seen on broadcast TV, cable TV and digital media throughout the entire state beginning today. The commercial will air on CNN, MSNBC, ABC, CBS and NBC as well as local media in markets in all of Illinois, such as Rock Island, Champaign, Carbondale, Chicago, Springfield and many more.
“We want people throughout the state who are frustrated with the status quo—politics dominated by big money, big corporations and political insiders, at the expense of everyday Illinoisans—to understand our bold progressive message,” said Goldstein. “Our campaign is about returning power to those who haven’t had a voice, and bringing fairness and justice to everyone, not just powerful special interests. I will be the People’s Defender. I will stand with the people of Illinois.”
The ad features Goldstein, who is a career public defender and civil rights attorney with the most trial experience in this race, representing clients who feel the legal and criminal justice system is rigged against them. The ad also shows Goldstein with his family: his wife Nicole, also a public defender, and their two lovely daughters.
Goldstein is running for Illinois Attorney General on a platform that includes reforming the criminal justice and police systems, including legalizing marijuana and ending the racist drug war, fighting big-money politics and public corruption, and defending Illinois against the extremist right-wing policies of the Trump administration. As Attorney General, one of his first actions will be to establish a Public Integrity Bureau within the Attorney General’s office, whose sole function will be to investigate governmental corruption and hold accountable those public officials who exploit and manipulate the system for the select few.
Sorry, but a $100,000 statewide media buy is in no way, shape or form “aggressive.” $100,000 in this state will not even have the impact of spitting into the wind.
He might’ve done himself more good by holding a press conference to give that $100K to charity
