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Payment cycle to increase

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Illinois

It’s not getting any better.

ON WEDNESDAY, Blagojevichâ€™s health-care administrators testified that the average payment cycle â€” the time it takes for the governorâ€™s agency to process payment once it gets a bill â€” will reach 77 days when the fiscal year ends on June 30.

Thatâ€™s two days longer than the last fiscal year, when the payment cycle climaxed at 75 days.

The average now stands at 43 days. This is after the state borrowed $1 billion to pay down Medicaid bills.

posted by Rich Miller
Monday, Feb 6, 06 @ 3:26 am

Comments

Does anyone know for sure that all the money was paid on these bills?This bunch has a way of taking money earmarked for one thing and using it on another.

Comment by DOWNSTATE Monday, Feb 6, 06 @ 7:06 am
7:06 - You mean they MAY have wasted the money on non-healthcare things like campaign events? $13,000 campaign signs on tollways? Corruption to campaign donor Wyma? Salary to Filan?

Comment by Anonymous Monday, Feb 6, 06 @ 7:28 am
I hear we have $2 billion in unpaid bills to our doc’s, hospitols, nursing homes, etc and now the Gov wants to borrow another $3.2 for election year handouts. Great strategy Tusk!!!!

I can’t wait to hear the budget address.

Comment by anon Monday, Feb 6, 06 @ 7:33 am
Yes, it was all used for Medicaid. In fact, because the state gets reimbursed for half from the federal government, the $1 billion in spending generated $500 million in federal aid and some of that revenue was directed to Medicaid. In the short term, it was a large cash infusion. However you must keep in mind two very important budget principles: 1. The $1 billion has to be repaid by June 1, 2006 and 2. HFS has a set of fixed budgeted appropriations, so in this fiscal year they can only spend what the General Assembly and Governor give them. The $1 billion was simply a temporary cash infusion that was not linked to additional appropriations.

Comment by Budget watcher Monday, Feb 6, 06 @ 7:36 am
To the extent that this represents a Medicaid funding problem (as opposed to state government management incompetence in handling the bills–a likely scenario) it’s time for Illinois taxpayers to weigh in right now and say…no higher taxes to pay for this.

Cut bureacracy (my choice), go to managed care, consolidate state departments, whatever you have to do…but pay for this with the resources you
have…don’t raise my taxes to pay for Medicaid.

Comment by Cassandra Monday, Feb 6, 06 @ 8:29 am
Cassandra they are not going to raise your taxes to pay for medicaid but your tax increase will come from the other 20 billion he has borrowed plus all the money he is going to borrow for all of these give aways to get re-elected.Hang on this is going to hurt every working person in the state.

Comment by DOWNSTATE Monday, Feb 6, 06 @ 8:42 am
I’m sure trying insure every kid in the state is going to help…

Comment by Wildcat Monday, Feb 6, 06 @ 8:56 am
The 77 day lag time is a sham. That is from the time the State Agency receives a bill in the form they deem necessary for payment. Often the provider is not permitted to bill until the end of the month in which the service was rendered. Then the State Agency may reject the initial filing and take another 30 to 60 days to get the bill in proper form. The provider will be lucky to get payment in 6 to 8 months from the time service is provided. The State Prompt Payment Act should be regulary invoked. Take it from someone who ran a state program for several years.

Comment by one of the 35 Monday, Feb 6, 06 @ 9:08 am
Cassandra,

You could shrink the state workforce by another 20% and you still haven’t corrected the structural funding issues of the state. The two biggest fiscal problems facing the state are Medicaid and pensions, not necessarily in that order. The state has legal obligations to fund both, so what’s the solution? Last year, we borrowed against future savings in the pension plans and in Medicaid they cut nursing home and hospital rates and stopped covering most over-the-counter drugs for the poor. These are stop-gap measures not structural corrections.

The equation is simple - the state must find a way to curtail healthcare entitlement growth rates and/or reduce future state pension benefits and/or raise more revenue. Selling the tollway could get us a little further along without some painful cuts, but ultimately, a selloff of assets can only last so long.

I truly believe you’ll see some serious pension reduction proposals for state employees come from the Governor in a couple of weeks. There’s plenty of public opinion that retirement benefits are just too good, and since AFSCME has already withheld support in the primary, state employees will almost certainly be an easy mark for this governor.

Comment by Former MC Monday, Feb 6, 06 @ 9:29 am
Cassandra I don’t know what your problem is with state employees but for every 35 thousand dollar a year employee the governor lays off he either hires or creates a 125 thousand dollar a year job for his cronies.State workers are not the enemy there is a lot of vital services being performed by these peolpe and a lot of them are stretched pretty thin.

Comment by DOWNSTATE Monday, Feb 6, 06 @ 9:56 am
Rich,

Sen. Syverson is correct - there are essentially two payment streams. If 40% of payments are expedited at an average of 15 days, 60% of the payments have to have cycles of 119 days. The pay cycle is measure from the time a claim is received, not from the date the provider rendered the service - 4 months. Can you say “deadbeat”?

Comment by Budget watcher Monday, Feb 6, 06 @ 1:50 pm
Well, let’s start by cutting state management positions by 20 percent. There is an early retirement incentive program in effect right now, I believe, so, with some encouragement, many mangers probably would leave voluntarily.
Managers are hanging on because they have so little to do, it’s less of a bother (and more lucrative) to stay.

As I’ve said before, front line jobs are different in that there are no doubt industry standards for their workloads (how many prisoners a guard should guard, how many foster kids per caseworker, how many mental patients per psychiatrist or psychiatric nurse) etc etc so it should be fairly easy to identify any overage in these areas…national standards are
usually quite reasonable…and also easy to identify areas needing additional frontline staff.

But it is crystal clear to the most detached observer that the management ranks in many agencies are seriously overstaffed, whether from
political patronage, inefficiency, inertia, or a combination of all.

Comment by Cassandra Monday, Feb 6, 06 @ 4:04 pm
Cassandra,
My guess is you can only speak to one agency, maybe two. This hardly qualifies you to make sweeping statements regarding the bloated management ranks. Before I left state employment, I routinely put in 15-20 hours of non-reimbusable OT each week and was on call during the weekends. I got calls on my state-issued cell phone at just about ever hour of the day, every day of the week. And I wasn’t the only manager required to be available 24/7.

I’m sorry your experience hasn’t been the same as mine, but please be cognizant of those who work hard. We don’t appreciate the harsh rhetoric.

Comment by Budget watcher Monday, Feb 6, 06 @ 4:31 pm
If anybody thinks that the state medical billing cycle is the only one that is long, try any of the other bills that the state owes. Where I work, our office was sent a disconnect notice from the gas company. Our building services manager had to plead to keep the gas from getting cut off! We have suppliers who are getting to the point that they are going to refuse business from us because they can’t get paid. Late payment is nothing new for this bunch.

Comment by "B Team" Monday, Feb 6, 06 @ 5:23 pm
Does anyone remember how long the payment cycle was under Jim Edgar in 1991 and 1992? Do remember many Downstate independent pharmacies closed, as while they could function as pharmacies, they could not function as banks making unreapid loans. This was before Mr. Schnorf, back in the day of Joan Walters.

Comment by Smitty Irving Monday, Feb 6, 06 @ 6:30 pm
The average pay cycle was 108 days at the end of FY93, but the difference is that under Edgar, the administration’s priority was to remedy the pay cycle delays. There wasn’t this institutional acceptance of long payment delays like there has been since FY2003. In fact, the Edgar administration, in relatively short order, brought pay cycles to less than 20 days. It took them 2-3 years to get there, but they did.

Simply put pay cycles are the equivalent to revolving debt. The Blagojevich administration has been pretty good at strategically borrowing in the short term to avoid significant prompt payment penalties, but the interest penalties are again accumulating and will be tens of millions of dollars very soon. The big question is will HFS be forced to pay their prompt payment debts or will providers continue to give them a free loan?

Comment by Budget watcher Monday, Feb 6, 06 @ 8:40 pm
Seeing this, how can any doctor or clinic possibly resist taking on new Allkids medicare clients? oh yes, this is going to work fabulously.

Comment by Doctor Bombay Monday, Feb 6, 06 @ 9:56 pm
Cassandra, there are currently no early retirement incentives on the table. While a lot of people took advantage of them, there were a lot of good managers in my agency who wanted to stay on the job, but were encouraged to hit the road by the political hacks brought in by Governor Hairdo. Some were afraid they would get caught in the crossfire when the federal indictments start flying when the activities of this administration get closer scrutiny. It’s not been a good situatioin for hard working and conscientous managers.

Comment by Stoney Tuesday, Feb 7, 06 @ 5:17 am
Each day of payment cycle delay = roughly $20 million, so a 77 day payment delay = $1.54 billion loan from doctors to the state government. Add on top of that, 42 days from date of service until the state “processes” the claim - and you’ve got an AVERAGE 119 day wait for payment. So if you’re not an expedited doc or hospital on the brink of bankruptcy — you’re looking at longer delays and 6 to 8 months to get paid.

Who on earth would participate in this program? I guess Lisa Madigan and the tax code force non profit hospitals to participate — but for a doctor, if you’ve got a busy, successful practice you’ve got to be a Saint to turn away paying customers to accept a dead beat state Medicaid patient.

And don’t get me started on All-Kids. I’ve read the RFPs for the Medicaid program. They require the state to spend $170m to $255million MORE on vendor contracts. Which means to save the required $56 million to make All-Kids “budget neutral” the vendors will have to reduce hospital costs by $226 million to $311 million! Sure its possible, but Howard Peters and the Hospital Association got the Gov to agree to let them help design the program. Guess what… they ain’t gonna let a state vendor take $311 million out of their hide.

Comment by Chicagograssroots Tuesday, Feb 7, 06 @ 9:39 pm