Illinois’ Late Payments Could Cost Medicaid Patients Access To Doctors

More than two dozen doctors, health care providers and insurance companies are warning a federal judge in Chicago that they may stop serving hundreds of thousands of poor patients in Illinois if the state government continues to delay its court-ordered Medicaid reimbursement payments.

Amid the ongoing state budget impasse, 25 Medicaid service providers, including the insurance giants Aetna and Meridian, filed federal court affidavits Friday saying the state has been too slow in doling out Medicaid reimbursement money. That’s even though federal Judge Joan Lefkow ordered that the state pay for Medicaid nearly two years ago when the budget stalemate began. 

The calls for faster payment come from managed care organizations, or MCOs, which receive Medicaid payments from the state and pass that money on to doctors and other health care providers. They argue the state is now so late in reimbursing them that it’s in violation of the judge’s order. 

Aetna Better Health’s chief financial officer, Debra Bacon, said in an affidavit that as of April 15, the company was owed about $650 million for bills dating back as far as October. 

If the state’s payments continue coming in late, Bacon wrote, then Aetna may start delaying its own payments to doctors and health care providers, who cover more than 225,000 low-income patients in Illinois.

“In turn, those providers may stop serving the Medicaid and Medicare populations … which include hundreds of thousands of underprivileged Illinois residents,” she wrote.

Another group, Meridian Health Plan of Illinois, submitted an affidavit dated April 21, saying the state’s tardy Medicaid payments have forced it to delay its own payments to health care providers. Meridian has the largest Medicaid enrollment of any MCO in Illinois, with a total membership of more than 384,000 people.

The backlog of payments going to MCOs is having a financial trickle down effect on the doctors and providers who see Medicaid patients, according to their affidavits.

In court documents, Meridian said it has received a notice from two health care providers -- one in DuPage County and one in Chicago’s northern suburbs -- that they were leaving the Meridian network.

Consuelo Salazar, an administrator with Provida Family Medicine in Grayslake, said in its April 24th affidavit that the state owes it $185,315.95. 

“Due to the lack of predictability of timely payments … Provida is being placed in an increasingly precarious cash flow situation,” Salazar wrote. 

Provida ultimately ended its relationship with the MCO it had been working with, effectively meaning it’s not seeing Medicaid patients any more, because the MCO couldn’t make predictable and timely payments, according to the affidavit. 

In another affidavit, Drs. Tahir Niazi and Giulia Mobarhan said their practice on Chicago’s Northwest Side has also been late in receiving partial pass-through payments from its MCO for seeing Medicaid patients.

“The MCO’s tell us that they will not pay our claims because they are not being paid by the State. Whatever the reason, it seems that the MCO’s and the State are pushing us towards bankruptcy in the very near future,” Niazi and Mobarhan wrote.

The flurry of affidavits asking for quicker payments from the state came just two days after Illinois Comptroller Susana Mendoza’s office announced it would release $800 million to pay for health care services, including the MCOs that reimburse doctors and facilities that serve Medicaid patients. 

That influx of cash came from Illinois citizens filing their income tax returns in April, Mendoza said. But she warned that influx of money only covers a third of the bills the comptroller’s office has received from health care providers. She said Gov. Bruce Rauner and state lawmakers need to end the budget impasse. 

“Without a budget, there will not be enough money to pay health care providers as we enter the lean summer months. Companies will go out of business. Clinics will close. And Illinois will get sicker,” Mendoza said.

DHFS spokesman John Hoffman said he could not comment on the pending litigation but added the comptroller's office has the authority to issue payments. 

DHFS "has submitted payment vouchers for this fiscal year to the Comptroller, which could be paid if cash is made available by the Comptroller's office," Hoffman said in a statement.

Tuesday morning, the head of the state agency that oversees Medicaid testified in a state Senate committee. Illinois Department of Healthcare and Family Services Director Felicia Norwood wasn’t asked specifically about the affidavits, but she said most MCOs are continuing to pay doctors and health care providers who see low-income Medicaid patients, though “a handful” were not. 

“Despite the comment and criticism from many MCOs, many MCOs have continued to pay providers,” Norwood told state senators. “I meet with MCOs every week and I can tell you they have worked very hard during these very difficult times to continue cash flow to providers. So that’s been a real benefit for us because they have continued to honor the obligations despite not having a requirement under the terms and conditions of our contract when they haven’t been paid to do so.”

A court hearing to address the affidavits is scheduled for May 9.