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player ready...Illinois is nearly $1.5 billion behind on payments to doctors, pharmacies, hospitals and other medical providers, causing experts to wonder how the state can launch a major new insurance program for children when it can’t even pay current bills.
In recent weeks, doctors have begun complaining loudly about Medicaid payments that are past due, in many cases, by as many as four months. As a result, some physicians are limiting the number of poor patients they’ll see.
They and other medical providers argue that Illinois is balancing its budget on their backs, using unpaid bills as short-term loans to help keep the state financially afloat.
“If you’re not paying your bills, it’s easy to make it look like your books are balanced,” said Todd Evers, who owns four Illinois pharmacies and is waiting for more than $500,000 in Medicaid payments.
Those most affected are physicians, pharmacists and other providers whose Medicaid patients make up less than 50 percent of their practices. Medical groups whose practices consist primarily of Medicaid patients get bills paid much faster.
This two-tier payment system creates a disincentive for many private medical practitioners to participate in Medicaid and aggravates long-standing problems with access to care, medical experts said.
Delayed Medicaid payments and budget gamesmanship are nothing new in Illinois. For years, governors and legislative leaders have approved budgets knowing the state would run out of money toward the end of its fiscal year, and simply planned to pay Medicaid bills when the new fiscal year began in July.
But over the last nine years, the year-end “accounts payable” tab for Medicaid has grown steadily–it’s about triple what it was in 1997. And although the state borrowed money to clear out backlogged bills in 2003 and 2005, at the end of this budget year the state expects to owe $1.7 billion in delinquent Medicaid payments.
That’s a big chunk of the more than $7 billion that Illinois spends on Medicaid each year.
State budget officials say the late payments are largely a byproduct of the rising costs of health care, as well as partisan bickering over a Democratic plan to help pay down Medicaid bills. Instead of cutting benefits or reducing doctors’ fees, officials say, the state is dealing with escalating Medicaid expenses, in part, by waiting longer before reimbursing providers.
“The governor said, `We’re not going to cut eligibility or rates. What else can we do?'” said Becky Carroll, a spokeswoman for Gov. Rod Blagojevich’s budget office. “So we contain costs, and we stretch the payment cycle. It’s the most painless way to make sure people get what they need.”
Administration officials also say expanding medical coverage under Blagojevich’s All Kids program will put money in the pockets of more providers. All Kids will offer health insurance to about 250,000 uninsured children in Illinois, beginning in July. State officials promise to pay for the expansion with savings to come from more tightly managed care for Medicaid.
But skepticism is high.
“When this goes into effect, the delays will get even worse,” predicted Dr. Shastri Swaminathan, a Chicago psychiatrist and president-elect of the Chicago Medical Society.
That’s because the state’s medical expenses will rise and because physicians who participate in All Kids have been promised expedited payments. If the funding sources for All Kids don’t cover its full costs, that may strain the Medicaid budget and slow payments to other providers.
Already, physicians say Medicaid’s financial practices make it extremely difficult for them to pay their staff and suppliers.
Dr. Matthew Johnson of Park Forest said he can’t afford to care for more poor people because he hasn’t been reimbursed for treating patients as long ago as December. When new Medicaid patients call, Johnson said, “we’re turning them away and telling them, sorry, but the practice is closed.” About 20 percent of his patients are on Medicaid, down from 25 percent a few months ago, he said.
In November, the state took out a $1 billion short-term loan to help pay down outstanding Medicaid bills, but the situation has quickly deteriorated again.
The impact of delayed payments isn’t evenly distributed.
For instance, pediatricians haven’t noticed a significant slow-down in payments, said Dr. Ed Pont, president-elect of the Illinois chapter of the American Academy of Pediatrics. Overall, he said, pediatricians are pleased by a substantial boost in Medicaid payment rates that took effect Jan. 1 after a legal settlement.
But other doctors say problems are acute.
Swaminathan belongs to a six-doctor practice where 40 percent of the patients are on Medicaid and payments from the state are more than 100 days past due.
Since the beginning of the year, he said, “it’s really reached a crisis level for many doctors,” many of whom he said are taking out loans to get by.
Some Medicaid experts say the payment cycle is almost as bad as in the early 1990s, when providers typically waited well past 100 days for their money. The problem is fueled partly by growth in the Medicaid budget, which has swelled by an average of 8 percent annually since 2000 and will reach $7.8 billion in state spending next fiscal year. Still, the state’s payment gimmicks wouldn’t be necessary if lawmakers budgeted more money to cover escalating costs, experts suggest.
Administration officials claim they could pay providers sooner if state Treasurer Judy Baar Topinka weren’t holding back money from some of the state’s special funds. Topinka–the Republican challenging Blagojevich for governor this year–believes the legislature didn’t properly approve the transfers.
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In any case, the administration said, the state is a reliable source of payment for doctors and other providers, even if the payments are often late.
Dr. Samantha Sattler, a family doctor at Logan Primary Care in Downstate Herrin, isn’t waiting to see what the next budget year will bring.
Largely because of problems with Medicaid payments, Sattler said she didn’t get a salary for the first three months of this year. Come July, the 35-year-old doctor is leaving Illinois and moving to St. Charles, Mo., because, she said, “I can’t practice like this any longer.”
She said nearly half of the clinic’s patients are enrolled in Medicaid, and that it’s common for the state to kick back invoices saying there are errors.
This year, she said, the state mistakenly specified that the clinic should get Medicaid payments in 555 days instead of 45 days. While the clinic’s staff tried to figure out what was wrong, she said, no Medicaid money arrived. Eventually, the state realized its error and sent a check for $283,000, a part of what the clinic was owed, Sattler said.
A spokeswoman from the Department of Healthcare and Family Services said once the error was “discovered, it was fixed immediately.”
It wasn’t fast enough for Sattler. “Enough is enough,” she said.
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