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Rep. Welch calls on AG Raoul to hold MCOs accountable for missing contract goals

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* Background is here if you need it. Press release…

State Rep. Emanuel “Chris” Welch, D-Hillside, is calling on Illinois Attorney General Kwame Raoul to take enforcement action against Medicaid providers for failing to meet fair contracting goals for minority- and women-owned businesses.

“It is unacceptable that most partners in the Illinois Medicaid program, the largest health insurance program in Illinois, fail to meet fair contracting standards for equity and inclusion by minorities and women,” Welch said. “As the chief legal officer of our state, Attorney General Kwame Raoul must take enforcement action to ensure that fair contracting agreements are followed and respected.”

Welch sent a letter to Raoul demanding that he enforce fair contracting agreements between the state and its Medicaid providers by suing the providers to recover taxpayer funds or by fining the providers. Data from the Illinois Department of Healthcare and Family Services (HFS), which manages the Illinois Medicaid program, indicates that its six partners met just 52% of their combined fair contracting goals. Only one of the six providers, IlliniCare, met or exceeded fair contracting goals. Without the inclusion of IlliniCare, the other five providers, Blue Cross and Blue Shield, CountyCare, IlliniCare, Meridian, Molina, and Next Level, met less than 40% of their combined fair contracting goals.

“Illinois needs to put Medicaid providers on notice that they will be held accountable for their failure to live up to fair contracting agreements,” Welch said. “Enforcement action from the Attorney General will not only help show the state is serious about advancing economic and racial justice, but it will also protect taxpayers from unreliable business partners who don’t honor contracts with the state.”

Asked if AG Raoul can sue to enforce these goals, Rep. Welch replied with three basic points: 1) The MCOs all signed contracts containing clear minority and female-owned contractor goals, with acknowledged consequences for failure; 2) Raoul represents the state; 3) The MCOs are in breach.

The letter is here.

…Adding… Meanwhile…

LIVEcoverage at 10:00 AM of the Senate Transportation Committee Hearing (Subject Matter On: Transparency and Equity In Construction Contracting At The Illinois Tollway Authority) @BlueRoomStream #Illinois

— BlueRoomStream (@BlueRoomStream) August 13, 2020

posted by Rich Miller
Thursday, Aug 13, 20 @ 9:17 am

Comments

Major kudos to Rep. Welch for pushing hard on this. I think the administration bears responsibility here as well, but the ultimate villains here are the MCOs.

Comment by Ok Thursday, Aug 13, 20 @ 9:36 am
I am rusty on this area of law, but I believe the State of Illinois is the real party in interest and there are a bunch of Illinois Supreme Court decisions saying the AG is the sole officer authorized to represent the state in any litigation in which the state is are the real party in interest. Of course, HFS could ask the AG to act, but that is highly unlikely.

Comment by Derek Smalls Thursday, Aug 13, 20 @ 9:37 am
From the model contract (the contract currently in effect may be different, but this is in language on HFS’ website) https://www.illinois.gov/hfs/SiteCollectionDocuments/2018MODELCONTRACTadministrationcopy.pdf

“7.16.5 Failure to comply with BEP requirements. If the Department determines
that Contractor has not met, and has not made good-faith efforts to meet, the
goals for BEP subcontracting established in section 2.9, or has provided false
or misleading information or statements concerning compliance, certification
status, eligibility of certified Contractors, its good-faith efforts to meet the BEP
goal, or any other material fact or representation, the Department may,
without further notice:
7.16.5.1 impose a performance penalty of up to US $100,000; or
7.16.5.2 withhold payment to Contractor in an amount equal to the difference
between the BEP goal and the amount of money paid to BEP-certified
subcontractors during the State Fiscal Year.
The Department may withhold whichever is the larger amount.”

HFS has fined the MCOs directly before, without going to the AG, so I don’t know why the AG would have to get involved with this.

Comment by Perrid Thursday, Aug 13, 20 @ 9:55 am
were they goals or requirements?

Comment by Blue Dog Dem Thursday, Aug 13, 20 @ 9:58 am
Still think what Welch wants would violate a US Supreme Court ruling. That said, how ironic that the hearing today is about the one general exception to that ruling - highway construction contracting.

Comment by Anyone Remember Thursday, Aug 13, 20 @ 9:59 am
Were they goals or requirements

They are contractual requirements.

Comment by Raising Kane Thursday, Aug 13, 20 @ 10:01 am
===HFS has fined the MCOs directly before===

Obviously, those piddly little fines aren’t enough.

Comment by Rich Miller Thursday, Aug 13, 20 @ 10:10 am
Blue Dog Dem - Except for highway construction contracting (an area I know nothing about), they are goals. As set forth by the US Supreme Court in the 1989 Croson decision.

Comment by Anyone Remember Thursday, Aug 13, 20 @ 10:19 am
=== - Blue Dog Dem - Thursday, Aug 13, 20 @ 9:58 am:

were they goals or requirements? ===

Both. The goal is the requirement. All they have to do is show they tried.

Comment by Birdseed Thursday, Aug 13, 20 @ 10:20 am
===those piddly little fines aren’t enough===

The second option, where they fine the MCOs the difference between the goal and what was actually paid to BEP contractors, would be $57 million. Now the MCOs get billions of dollars from the state, even just for administration, but still I’d be hard pressed to say 57 million dollars is insignificant.

Also, if the agreed to remedy in the contract is $57 million, I don’t see how the AG can try to go after more.

Comment by Perrid Thursday, Aug 13, 20 @ 10:24 am
Chris Welsh is really hanging in on this issue and that is great to see.
It is very obvious to anyone that looks into this situation, as Rep. Welsh has, that non compliance is just an accepted way of doing business under Team Pritzker. The delay in providing data was just not acceptable and when the information was finally provided by the administration it was crystal clear why the foot dragging went on.
Perhaps taking the worse performer and going to court to cancel the contract would get things moving to get the providers and the administration to come into compliance with the contracts.
Rep. Welsh’s idea of going to the AG is a good idea.

Comment by Back to the Future Thursday, Aug 13, 20 @ 10:29 am
The problems with the MCO dynamic goes way beyond the issues articulated here. The entire boondoggle is a system of delay, bait and switch and non-payment for vital human service agencies.

The word that encapsulates the MCO experiment is “disaster”.

Comment by Say It Thursday, Aug 13, 20 @ 11:38 am
GOALS. You can’t sue over goals.

Comment by Southern Skeptic Thursday, Aug 13, 20 @ 11:44 am
Rep. Welch knows about government misconduct, his law firm handles Section 1983 civil rights cases. As far as IL AG Kwame Raoul doing anything real about malfeasance within government, don’t hold your breath. Legend has it that there exists a “Public Integrity Bureau” within the AG’s office, but you need a microscope to find it.

Raoul is good at running away from tough questions though, like he did at the City Club of Chicago meeting on Oct. 21, 2019, held at the Union League Club. Raoul’s campaign office was inside Senate leader John Cullerton’s office on Belmont Ave. in Chicago. The old Mayor Daley Dem party types have just the AG they wanted:useless.

Comment by Payback Thursday, Aug 13, 20 @ 11:58 am
Agree with Southern Skeptic. State has goals; City of Chicago has requirements. State has not done disparity study to justify requirements; City has. This distinction between State and City m/wbe programs led (indirectly) to marijuana battle between state legislators and city aldermen.

Comment by Shot and a Goal Thursday, Aug 13, 20 @ 11:58 am
=== You can’t sue over goals===

You can when those goals are in a contract with specific punishments for not meeting them.

Racists always looking for loopholes.

Comment by Rich Miller Thursday, Aug 13, 20 @ 12:09 pm
“You can when those goals are in a contract with specific punishments for not meeting them.”

Then it isn’t a goal, it is a requirement.

Comment by Anyone Remember Thursday, Aug 13, 20 @ 5:06 pm
Back to the Future - in all likelihood the agency, CPO, or Governor’s Office can terminate the contract immediately. Nearly every contract has a termination for convenience and a termination for cause clauses.
However, as someone said previously, they only have to prove good faith effort (there is actual paperwork) with contact logs and emails to show the effort was made to sub contract work to BEP Vendors.

Usually, the BEP Utilization Plan is submitted with the contract for approval and clearly outlines the vendor’s plan to meet goals approved by CMS Diversity Compliance during the procurement and award phase of the contract.

Comment by Anonymous Thursday, Aug 13, 20 @ 6:19 pm
Anonymous -
“… to meet goals approved by CMS Diversity Compliance … .” Goals and Compliance are mutually exclusive.

Comment by Anyone Remember Thursday, Aug 13, 20 @ 6:28 pm
-Anyone Remember-, Welch has known about the racism for many years and now he speaks up?? Thank God he’s finally realized that he’s only been thrown crumbs by his party. Minorities like us still don’t get it they expect us to work hard for a fraction of what the white race receives.

Comment by Latina Thursday, Aug 13, 20 @ 7:20 pm
30 ILCS 575/8

(2) State agencies and public institutions of higher education shall review a vendor’s compliance with its utilization plan and the terms of its contract. Without limitation, a vendor’s failure to comply with its contractual commitments as contained in the utilization plan; failure to cooperate in providing information regarding its compliance with its utilization plan; or the provision of false or misleading information or statements concerning compliance, certification status, or eligibility of the Business Enterprise Program-certified vendor, good faith efforts, or any other material fact or representation shall constitute a material breach of the contract and entitle the State agency or public institution of higher education to declare a default, terminate the contract, or exercise those remedies provided for in the contract, at law, or in equity.
(3) A vendor shall be in breach of the contract and may be subject to penalties for failure to meet contract goals established under this Act, unless the vendor can show that it made good faith efforts to meet the contract goals.
(Source: P.A. 99-462, eff. 8-25-15; 100-391, eff. 8-25-17.)

tl;dr Vendors have to meet established goals or show why they could not after making a good faith effort. If cannot/will not, they are in breach of contract.

Comment by Anonymous Thursday, Aug 13, 20 @ 9:47 pm