A federal judge heard arguments Tuesday over whether Comptroller Susana Mendoza should be required to prioritize payments to some Medicaid providers among Illinois’ billions of dollars in unpaid bills that keep piling up during the state budget stalemate.
The court dispute reflects the mounting difficulty of balancing Illinois’ competing financial obligations in the midst of an ongoing political fight between Republican Gov. Bruce Rauner and Democrats who control the General Assembly.
Judge Joan Lefkow indicated in court on Tuesday that she was sympathetic to the complaints of the Medicaid patients, but that she was unlikely to go as far as telling the comptroller which bills should be set aside in order to make the payments.
And attorneys representing the patients said they weren’t expecting the state to be required to immediately come up with the $2 billion owed to health care providers. They asked the judge to issue an order declaring those bills a priority in order to compel the two sides to negotiate a plan to funnel more money to doctors and hospitals.
“We hopefully will be able to negotiate a compromise solution with the state,” said David Chizewer, one of the attorneys representing patients. “We’re not trying to wreak complete havoc on the system.”
Lefkow’s ruling is expected in the coming days.
A spokesman for Mendoza declined to comment on the case, but pointed to an affidavit filed with the court by Assistant Comptroller Kevin Schoeben that lays out the financial juggling act that occurs in the comptroller’s office.
The Medicaid payments in question aren’t counted in Illinois’ “core priority category” that includes paying down debt, pension contributions and spending to elementary and high schools, which are authorized or required under state law and take up about 90 percent of the state’s available cash, Schoeben said. The comptroller’s office tries to spread the remaining 10 percent around, but “the ability to make these payments is stressed by the lack of revenues necessary to make expenditures.”
Lefkow is the judge who initially ordered the state to continue making Medicaid payments in the midst of the stalemate that began in July 2015. The ruling drew on a 2005 court order that requires the Illinois Medicaid program to provide children in Cook County with access to health care that meets the standards of the federal Medicaid Act.
That decision came at the start of the now nearly two-year budget stalemate, after Rauner’s administration sent a letter to providers in the Medicaid program asking them to continue to offer care during the impasse and wait for reimbursement from the state once a deal was reached. The ruling was among a few key court decisions that have made it possible for most of Illinois state government to continue chugging along without a budget.
Illinois’ Medicaid program, which amounts to about $8 billion a year in state spending, combines state and federal money to pay for medical care for the poor and their children.
Two years after Lefkow’s ruling, a cash crunch in Illinois’ main checking account has caused the state to fall behind on a number of payments, including about $2 billion owed to Medicaid providers. Lawyers for Medicaid recipients argue that the doctors and hospitals who are owed the money are starting to cut off services to the poor people who need their care, putting the state in violation of federal consent decrees.
“What we’re seeing is that practices are starting to either stop taking Medicaid recipients for patients or starting to cut back on the number they will see,” said Thomas Yates, a lawyer at Legal Council for Health Justice. “If the doctors don’t get paid, they will not provide services to Medicaid recipients.”
Yates argued Tuesday that the state is in violation of the 2015 order because it hasn’t kept current on the payments, instead sending dollars to pay other bills as required under state law. Yates argued that those payments are being made for “political reasons,” while the payments ordered by a federal court are being pushed to the back of the line.
Asked Tuesday if an order requiring immediate payment of the bills would create pressure for a budget deal, Rauner said “there’s plenty of pressure.”
“It’s breaking my heart. It’s so frustrating,” Rauner said at an event in the South Side community of Hegewisch, where he was promoting his property tax freeze idea. “The folks in power need to recognize we can’t keep doing what we’ve been doing.”