[Bumped up to Thursday for visibility.]

* This puts the comptroller in a pretty darned tough spot, making her choose between violating state statutes, state judicial orders or federal court orders…

A Chicago federal judge has stopped short, so far, of ordering the state of Illinois to place a premium on paying the health insurance organizations, hospitals and others the $2 billion it is estimated the state owes under unpaid Medicaid bills.

However, on Wednesday, the judge said the position taken by the so-called managed care organizations is “reasonable” and indicated she did not similarly find it reasonable for the state to skimp on Medicaid payments while fully funding its monthly payroll and debt repayments.

“…Compliance with a state statute does not excuse failure to comply with a federal consent decree,” U.S. District Judge Joan Lefkow wrote in her June 7 order. “Although the court means no disrespect to the Comptroller, who faces an unenviable situation, it finds that minimally funding the obligations of the decrees while fully funding other obligations fails to comply not only with the consent decrees, but also with this court’s previous orders.”

For now, however, the judge ordered the state and the MCOs to continue negotiating over the next two weeks to reach a payment agreement.

Should they fail to strike an acceptable deal by June 20, however, she said either party could return to court for further proceedings.

* From the legal team representing the plaintiffs…

The court noted that Illinois chose to prioritize certain core priority payments—including pension payments, debt services, K-12 education, safety net medical providers, and state employee salaries—that are paid in full each month. The plaintiffs argued that then, only if the state has dollars left, would it make payments to Medicaid, imperiling the entire program by putting access to care, provider enrollment, managed care participation, and the solvency of Illinois’s health care safety net at risk.

The order came after a court hearing on June 6, 2017 when attorneys from the Sargent Shriver National Center on Poverty, Legal Council for Health Justice, and Goldberg Kohn returned to federal court to hold the State of Illinois accountable to reimburse medical providers statewide for Medicaid-funded care.

Some medical providers in Illinois have been delaying payment of salaries, taking out additional business loans, and facing closure or staff layoffs. Thomas Yates, executive director for Legal Council for Health Justice says, “This ruling reaffirms the importance of Medicaid to more than three million Illinois residents, the majority of whom are children, elderly, disabled, or members of low-wage working households, who rely on this program for essential medical care.”

Shriver Center president John Bouman warns, “We are now seeing the very real threat to the vital functions of government caused by the failure to produce a budget. The policy disputes now blocking the budget should be fought out on some other battlefield. Carrying out and paying for the vital functions should be the first priority of governing.”

* From the comptroller…

In accordance with Judge Lefkow’s ruling, our attorneys will continue discussions with attorneys for the plaintiffs.

The lack of a budget for the last two years has created a situation in which we now have more court-ordered and state-mandated payments than we have revenues to cover them.

The real solution to this crisis is a comprehensive budget plan passed by the General Assembly and signed by the Governor. Now.

*** UPDATE ***  Pritzker campaign…

“Bruce Rauner is the governor of this state and the courts should not have to do his job for him,” said JB Pritzker. “It is Bruce Rauner’s constitutional duty to propose a balanced budget, but for the past three years he has consistently refused to do so. As Rauner holds this state hostage, the backlog of bills continues to grow and the fiscal crisis deepens. Courts are left with no choice but to pick winners and losers of state resources. In reality, all Illinoisans are losing under our failed governor. This is a manufactured crisis and the people of Illinois deserve so much better. It is time for a governor with courage, who will sit at the negotiating table, bring people together, and get our state a balanced budget.”