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* One legitimate criticism of Gov. Blagojevich’s endless quest to expand health care coverage is that he is doing such a poor job administering the state’s existing health care programs that he can’t be trusted to do the right thing with new programs

Comptroller Dan Hynes and several lawmakers used a stinging new audit to blast Gov. Rod Blagojevich’s administration for trying to expand state-subsidized health care when the current state Medicaid program is racking up huge deficits and is sometimes taking months to pay doctors who care for the poor and elderly.

Auditor General William Holland’s examination provided the first hard evidence of how the administration has camouflaged the state’s budget problems by rolling over about $1.5 billion in Medicaid bills each year. Moreover, the report said, it is taking the Illinois Department of Healthcare and Family Services an average of 77 days to pay doctors and pharmacists who are not associated with large hospitals.

“This is appalling and inexcusable,” Hynes said. “Health-care providers have been forced out of business as a result of the ongoing mismanagement of this program.” […]

Rep. Frank Mautino (D-Spring Valley) said he was especially troubled by the audit’s finding that the state is taking nearly three months before telling many providers that a payment request has been rejected. [emphasis added]

* Hynes gave a quick outline of the Auditor General’s report in a statement issued to reporters…

–During the last three fiscal years on average $1.5 billion in medical claims went unpaid in the same year the services were provided.

–Due to the late payments, the [Department of Healthcare and Family Services] accrued potentially $81 million in interest costs since FY2000. In the current fiscal year alone, Hynes noted, the state has paid out more than $20 million in late-payment interest for healthcare-related bills.

–The agency failed to develop a system to pay interest on late medical reimbursements until nearly eight years after it should have done so. It took an average of 452 days to pay interest due to some healthcare providers.

* More from Hynes’ statement…

“This audit provides more evidence that the administration has been mismanaging the Medicaid system and has been manipulating the payment process,” Hynes said. “By doing so, they are not helping people as they claim. Rather, they are harming some of the most vulnerable Illinoisans and the dedicated healthcare professionals who are trying to provide those citizens with critical services.”

* One local angle

In Rockford, SwedishAmerican Hospital is waiting on state reimbursement it requested five months ago for Medicaid-related expenses, said Richard Walsh, chief operating officer, adding that the hospital is waiting on $12.5 million.

“It’s frustrating for all health-care systems,” he said, that the state “continues to balance its budget by not paying for services that are being provided to Medicaid patients throughout the year, particularly when we can’t refuse those patients when they show up at our door.”

That’s the nut of it right there. The state is literally balancing its budget by borrowing from Medicaid providers. Illinois has always done this, but it’s gotten worse under the Blagojevich administration. Putting new people into Medicaid programs only puts more strain on the system.

The governor did try to address this last year, but his Gross Receipts Tax proposal - which would have pumped lots of money into Medicaid programs - was just too bizarre and too costly.

HYNES: We have to ask ourselves whether we’re really helping people if we’re expanding a system that’s broken, that’s underfunded, and where doctors don’t want to participate.


* Somewhat related…

* Lawmakers: Enough space for IDOT in Springfield

* The Protest For/Against Everything

* No pay raises for state lawmakers

* Battle to unlock downstate transit funding faces impending deadline

* Authorities urge state to help curb child abuse

posted by Rich Miller
Wednesday, May 14, 08 @ 9:15 am


  1. Help me understand the following:
    Why isn’t this the top story at every newspaper and tv station?
    Why doesn’t Hynes and Holland get every senator and rep to stand behind them and do a press conference and call the gov out?

    If you don’t think we need to throw this governer out right now, then must not understand how serious the problem is! It will not get better until we have new leadership.

    Recall, Impeachment, resign, what ever it is, the time has come….

    Comment by Help me Wednesday, May 14, 08 @ 9:26 am

  2. Absent a payment system, I’m be curious to know who is deciding when and to whom payments are being made. That strikes me as a very powerful position.

    Comment by wordslinger Wednesday, May 14, 08 @ 9:35 am

  3. It is too bad that those hungry Knights of the Tort in Illinois do not open a class action against the State of Illinois, which they surely would if the State were a private corporation. But the State probably cannot be sued without its consent.

    In other Tort news, I draw your attention to the economic turnaround in Mississippi since the institution of Tort Reform.

    Job creation, capital investment, medical presence are all way up,

    But we do not want that in Illinois, do we?

    Comment by Truthful James Wednesday, May 14, 08 @ 9:50 am

  4. Now that the legislature knows about this 1.5bill in back bills it will be incumbent on them to provide for its payment in the next budget. The State is somplace past a fiscal crisis at this point, its almost to the E. St Louis finance stage

    Comment by Ghost Wednesday, May 14, 08 @ 10:02 am

  5. truthful james, what actual reform do we need? What is actually broken in our legal system and what is the proposal to fix it? Reform is a meaningless word badied about to often. Lets hear the actual idea that needs implemented.

    Comment by Ghost Wednesday, May 14, 08 @ 10:05 am

  6. It’s hard to believe that our ever-pluckable Illinois citizens are going to get very excited about 20 mill in interest costs for late payments.

    We don’t complain about huge salary increases for state lawmakers. We don’t complain about massive
    patronage hiring. We don’t complain about disastrously run agenices like DCFS (supposed to protect little kids) and DHS (supposed to protect the disabled). We don’t complain about lavish state pensions and almost-free health insurance which will almost certainly raise our taxes in future years. We turn up our noses at ethics reform and pay to play. We keep electing the same people (legislators, governor) who brought us these thiings. Most state legislator jobs are jobs for life now, and looks like Blago is planning to be guv for life.

    Our leaders would be correct in turning up
    their noses at at a mere $20 mil. They know we’ll pay up without a murmur, and, more importantly, they know their jobs are safe.

    Comment by Cassandra Wednesday, May 14, 08 @ 10:06 am

  7. Amen to what “Help Me” wrote. IMPEACH NOW!!!!!

    Comment by Dan S, a Voter & Cubs Fan Wednesday, May 14, 08 @ 10:08 am

  8. Hynes is more than willing to point out the problem and even offer a solution - stop doing it - but, and it’s a big but - is he willing to offer a revenue source to actually pay for it? If the state is $1.5 billion in arrears, it will take a revenue source to catch up. Or offsetting expenditure cuts. Until he says how it should be paid for, he’s just showboating.

    Comment by Anonymous Wednesday, May 14, 08 @ 10:10 am

  9. A novel idear… expand healthcare and skip medicaid payments whilst the Teacher Retirement Insurance Program (provides health insurance to 60 some thousand people) goes insolvent in another year?

    Comment by Decatur Wednesday, May 14, 08 @ 10:20 am

  10. So would Dan Hynes like to cut people off healthcare, or does he have a new revenue idea to pay for paying people more promptly. Did anyone ask him that question?

    And notice that the medicaid debt is $1.5 billion - not the $3 billion + that he has been running around clamoring about.

    The serial exaggerator strikes again.

    Comment by JohnR Wednesday, May 14, 08 @ 10:24 am

  11. Cassandra, I’m not sure there is anything the citizens can do about the condition of this state until it comes election time. Our elected officials stop listening to the voters when they get into office, and then they turn it into a full-time, lifetime position.

    We have a governor who plays a huge ponzi game. Poe, Bomke & Brauer toured State offices yesterday and found lots of empty room for Traffic Safety to move to instead of relocating employees to southern Illinois. However, CMS says there are plans for the empty space. They won’t divulge the plans. You can bet that is on orders from Blago. He is the head of the ponzi scheme in this state and we are allowing it.

    Our legislators won’t impeach this governor - they don’t have the coconuts to do so; however, hopefully the voters will come the 2010 election, if Patrick Fitzgerald has not indicted, convicted and sentenced Blago by then. I think Blago is certainly going to continue with a career in government service; however, it looks like it’s going to be as GRyan’s cellmate. Blago should definitely be indicted if Rezko is found guilty. The citizens of this state should scream if there is anything less.

    I am with you on this one though. We are numb to having legislators that don’t respond to us, don’t vote the way their constituents want them to but the way THEY want to, take campaign funds in a pay to play system in Illinois. It’s hard to expect the system to be fixed when those that are responsible for fixing the system are THE problem.

    Comment by Little Egypt Wednesday, May 14, 08 @ 10:27 am

  12. JohnR,

    $3 billion is not an exaggeration. HFS has averaged $1.5 billion in year end bills in-house over the last 3 year. That’s in-house. This year that number is supposed to be around $1.8 billion. There’s always around $800 million in services that have been incurred by healthcare providers and the bills are in transit to HFS. That puts the entire “General Funds” tab at $2.6 million. Then there’s the bills for Cook County and University of Illinois hospitals that are paid thru special state funds. That year-end unpaid liability will be between $400-500 million. You’re easily looking at a total unpaid liability of $3 billion.

    Look historically at the Comptroller’s Section 25 liability (on the Comptroller’s web site), which are numbers submitted by HFS. Section 25 denotes the section of the State Finance Act that allows HFS to roll unpaid bills into the next fiscal year.

    Comment by Budget Watcher Wednesday, May 14, 08 @ 10:54 am

  13. Budget Watcher is far closer to reality than JohnR.

    Comment by Rich Miller Wednesday, May 14, 08 @ 10:58 am

  14. But it’s specious to say “now that the legislature knows.” Those numbers are part of every year’s budget negotiations, and have been for as long as I can remember. In terms of days, it’s about what it was when Edgar took office, though the dollars are much higher because of the increasing cost of each day.

    The usual consensus goal is to have it about 30 days. By the time Edgar left office it was down to around 15 days, and DPA was trying to find more bills to pay. It stayed at around 30 days, and then skyrocketed at the end of Ryan’s term with the big ‘02-’03 revenue drops.

    That’s generally what happens; it goes up during rough times (the state is borrowing from its Medicaid providers to pay other expenses of government) and then it gets paid back down during relative good times. That’s what was missing during the past 4 years.

    It’s one thing to argue about whether it’s acceptable policy or practice, but it’s quite another to pretend that no one knows it’s happening.

    I think it’s not Hynes’ job to offer a solution: that responsibility lies with The GA and the Governor. If Hynes runs for Governor, that will be the time to expect him to offer a solution.

    Comment by steve schnorf Wednesday, May 14, 08 @ 12:39 pm

  15. ===but it’s quite another to pretend that no one knows it’s happening.===

    Very true.

    Comment by Rich Miller Wednesday, May 14, 08 @ 12:41 pm

  16. Candidates frequently pledge that they won’t borrow from Medicaid providers, short the pension contributions, raise taxes, etc, but once they get elected the reality hits. To honor those promises you either have to hold down (or cut) spending growth during tough times, or raise revenues.

    And, during good times you can’t do all the things you want to with natural revenue growth because you’re paying down the risen unpaid liabilities from the tough times. Those are the general rules that the game has been played by in the past. I thought you ignored them at your peril, but that doesn’t seem to have been the case.

    Comment by steve schnorf Wednesday, May 14, 08 @ 12:58 pm

  17. TJ,

    Speaking of Mississippi, their state legislature is now debating whether to spend some of their $400 mil “rainy day fund” to stimulate their economy. This state was once known for its NJ and LA-style corruption. How did the state accumulate a balance? All those casinos south of Memphis and on the Gulf Coast, for starters.

    Comment by Six Degrees of Separation Wednesday, May 14, 08 @ 1:28 pm

  18. Rich -

    I would dispute Budget Watcher’s math.

    He adds $1.8 billion to the $800 million “in transit”.

    I think that is facetious.

    The reality is - the “$1.8 billion” or “$1.5 billion” number can never be “0.” That would mean as soon as a patient walked out the door, the doctor would have a check in their hand for the service.

    The reality is this - the State has about a $12 billion medical programs budget. If it takes a month to take in and process bills (faster than an insurance company), that means you will ALWAYS have a minimum liability of $1 billion.

    If it takes you 45 days (the federal standard), then you will ALWAYS have a minimum liability of $1.5 billion.

    It is only above that amount that you can really can consider those bills overdue.

    And Dan Hynes used the hospital assessment payments to pad his numbers. So your math, Budget Watcher, and his were both wrong, ridiculous, and deceitful.

    Comment by GoBearsss Wednesday, May 14, 08 @ 1:37 pm

  19. I suppose to remedy the situation doctors will now be included with hospitals and nursing homes as illegal to have a ‘for profit’ entity, like an office. Where else would a national health care plan get staff unless they co-opt them?

    Comment by Belle Wednesday, May 14, 08 @ 2:06 pm

  20. GoBears the rpoblem seems to be in the description of bills being rolled over. I would add that your description is itself deceptive and inaccurate.

    The State has 60 days to pay the bills from the previous fiscal year after the next year begins. Thus under your description there would be a 0 dollar roll over, because the money for 08 bills would be paid from 08 funds (if there is no problem) 45 days later reducing the amount owed for fiscal 08 to 0. The roll over problem comes from running up expenses in 08 without funds to pay them period. the 1.5 billion or more being rolled over is finacial obligation for which there is no money to pay so it is passed on to the next year.

    Otherwise we would pay 08 bills in the 60 days after the end of fiscal 08 slotted for paying off all remaining 08 obligations.

    Comment by Ghost Wednesday, May 14, 08 @ 2:40 pm

  21. Ghost,

    Here is a quick summary followed by references

    Mississippi passes tort reform
    By Walter Olsonon June 11, 2004 12:02 AM | Permalink | TrackBacks (1)
    Following hard-fought political battles, the Mississippi legislature has passed and sent to Gov. Haley Barbour for his signature a wide-ranging bill limiting liability lawsuits. It includes a $500,000 limit on pain-and-suffering awards in medical malpractice cases, and $1 million in other cases; punitive damage caps; venue reform; joint and several liability limitation; relief of premises owners from liability to contractors’ employees for hazards known to the contractor; and product liability relief for “innocent sellers”.

    From the Mississippi Development Authority

    And From a Prominent Tort law Firm there

    How else do you think that MS got Toyota and all the rest, while Blago was phonying up supposed interest by Honda. — just another dishonesty from Springfield.

    Comment by Truthful James Wednesday, May 14, 08 @ 2:42 pm

  22. Six Degrees –

    Other states have Rainy Day Funds, Illinois on the other hand has politicians holding upside down umbrellas to catch the pork.

    MS does not have heavy tax burdens on their citizens either. And with the Katrinas hitting the Gulf Coast, at least they had money to start the rebuilding.

    What would we do in Illinois if an Earthquake did destroy an Illinois town or city and or displace the Mississippi River throwing some of our boats out of business?

    Comment by Truthful James Wednesday, May 14, 08 @ 2:49 pm

  23. Ghost - you completely misread my comment. I didn’t talk at all about roll-over.

    I was talking about liability at a given point in time.

    Comment by GoBearsss Wednesday, May 14, 08 @ 3:00 pm

  24. Dan Hynes got it exactly right. We can’t pay our bills for the Medicaid system we have, so its fiscally foolish to expand eligibility/obligations without having the means to pay for it. Nonetheless promoting health care access for the unisnsured is a laudable objective in principle.

    Comment by Captain America Wednesday, May 14, 08 @ 3:18 pm

  25. GoBearss,

    Dan Hynes, by law, is required to report deferred liabilities and that number will be in the ballpark of $3 billion at the end of FY08. That’s not deceitful. That’s his job. I will grant you, however, that the way someone interprets or presents that number can, at times, be disingenuous.

    I will further grant you that the Medicaid deficit may be arbitrarily defined by different measures…the fact remains, however, that HFS will have, in-house on June 30, approximately $1.8 billion in claims that they won’t pay because they don’t have appropriations to do so. Maybe you say, well, a 30 day unpaid inventory is standard (arbitrary but fairly reasonable). If that’s the case, then the deficit is more like $1.1 billion give or take. Better yet, how about you decide the deficit determination and tell us all what’s appropriate measure?

    Comment by Budget Watcher Wednesday, May 14, 08 @ 4:06 pm

  26. GoBearss,

    Two other quick points, the in-house, in-process number is nowhere near your stated $1 billion. Maybe $350 million…electonic HIPAA formats ensure timely processing of claims. Point two, $3 billion doesn’t include the $1.2 billion roll over of last year’s hospital assessment bills.

    Comment by Budget Watcher Wednesday, May 14, 08 @ 4:13 pm

  27. We also have to remember that the (# of days) payment cycle number is an average. I’m guessing that number will be 72 or 73 days at the end of this fiscal year. However, because some providers, for a variety of reasons, get paid very quickly (several days), others must wait far beyond 70 or 75 days. I suspect that there are providers right now waiting close to 6 months or more for their payments.

    BUT, hospitals aren’t closing, access (primary care physicians accepting Medicaid) is probably better today than it was 10 years ago, the large pharmacy chains continue to expand rapidly, there aren’t daily Medicaid relief rallies on the Capitol lawn, etc. That’s what I meant when I said there doesn’t seem to be any great peril for elected officials in letting this happen. I’m not minimizing hardships created by this situation, but it does seem to work.

    Comment by steve schnorf Wednesday, May 14, 08 @ 6:24 pm

  28. In all of his facetime with the media, was Hynes asked, or better yet, did he volunteer to comment on the audit finding addressed to his agency and CMS?

    Comment by Frank Sobotka Wednesday, May 14, 08 @ 9:13 pm

  29. The HFS mess is what you get when you put an attorney, instead of a fiscally knowledgable doctor, in charge of a medical agency. Especially if that attorney is nothing but a lapdog for the governor. The HFS powers that be and their outreach program are so busy spending money to promote fly-by-night initiatives that never come to fruition (imagine demanding that a bureau employee tell the UPS man to wait until a banner was ready to ship to an outreach command performance on the governor’s free medical-for-all plan!!!) That is just one example of the arrogance and money wasted instead of paying past due bills. It goes on day after day, all the time.

    Comment by Disgusted Wednesday, May 14, 08 @ 9:40 pm

  30. Well said, Disgusted. I gag every time I see that guy described as a healthcare expert, or my personal favorite, “one of the shining stars of the Blagojevich administration.” The bar for that accolade has to be set at about the same level as Emil Jones’ Limbo Line.

    The Blagoites have no shame. Whether it is attacking the Comptroller because he overstated your healthcare deficit spending “It’s only a billion!” or the budget deficit “We’re running a surplus, so the deficit is only $2.5 billion!” to Filan’s spending the Lotto lease money about three different ways, their contempt for the truth is odious.

    Comment by Fox Mulder Wednesday, May 14, 08 @ 10:12 pm

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