Talks over boosting Illinois Medicaid
payments fail
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[June 27, 2017]
CHICAGO (Reuters) - A U.S. judge
should order Illinois to pay Medicaid providers about $1 billion a month
to ensure medical care continues for the three million recipients of the
health program after talks with the state reached an impasse, according
to a court filing on Monday.
The move would cause a huge problem for the cash-strapped state, which
has accumulated a $15 billion bill backlog due to a budget stalemate
between its Republican governor and Democrats who control the
legislature. It could force Illinois to stop making full payments on
other state-mandated or court-ordered spending such as pensions and
payroll.
The filing in U.S. District Court by attorneys representing Medicaid
recipients asked Judge Joan Lefkow to order the state to pay $500
million a month for four months to start reducing a $3.1 billion pile of
unpaid bills owed to managed care organizations that turn pay doctors
and others.
As long as Illinois remains without an enacted budget, the proposed
order calls for the state to spend an additional $586 million a month to
cover Medicaid-related bills incurred after June 30, 2017.
The proposed order noted that federal reimbursements for Medicaid would
reduce Illinois' outlay to $543 million a month.
The two sides are scheduled to appear on Wednesday before Lefkow, who
previously ruled Illinois' minimal payments to managed care
organizations did not comply with federal consent decrees that resulted
from two cases filed against the state in 1992. The judge had ordered
negotiations aimed at getting Illinois to "substantial" compliance with
the decrees, noting the state has managed to make its monthly bond and
pension payments on time and in full.
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Monthly payments related to the Medicaid and other consent decrees
have totaled only about $160 million.
In the wake of Lefkow's order, Illinois general obligation bond
prices plummeted and yields soared in U.S. municipal market trading,
although the bonds subsequently clawed back some losses. The state
comptroller last week pledged to not delay or diminish debt service
payments.
There was no immediate reaction to the court filing from the
Illinois Attorney General's office.
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Rauner ordered lawmakers back into a special session, which began
June 21 and is scheduled to end on Friday, to pass a budget before
fiscal 2018 begins on Saturday.
Entering a third-straight fiscal year without a spending plan could
sink Illinois' credit ratings to "junk," a first for any U.S. state.
(Reporting By Karen Pierog)
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