A federal judge on Friday ordered Illinois to start paying $286 million more in state money toward Medicaid bills every month and an additional $1 billion over the course of the next year, worsening the state’s cash-flow problem, the Chicago Tribune reported.
U.S. District Judge Joan Lefkow’s ruling in Chicago federal court came after lawyers representing Medicaid patients and attorneys for the state were unable to agree on a plan to deal with bills and pay down a $3 billion backlog owed to health care providers.
According to the Tribune, the ruling requires the state to start promptly paying all new Medicaid bills, estimated at more than $570 million per month, and to pay down $2 billion of its bill backlog in payments spread out over the course of the fiscal year that begins Saturday. The federal government pays half of those costs, so the bottom line for the state will be $286 million per month and $1 billion in backlogged bill payments over the next year.
Comptroller Susana Mendoza’s office earlier in the week had offered to pay an additional $150 million per month, but the plaintiffs rejected it, saying it wasn’t enough, the Tribune reported. The $150 million would have only cost the state $75 million because of the federal match, and Mendoza’s office said that was all the state could spare.
Now, Mendoza said Friday’s ruling would cause her to likely have to cut payments to the state’s pension funds, state payroll or payments to local governments. Payments to bond holders won’t be interrupted, she said.
“As if the governor and legislators needed any more reason to compromise and settle on a comprehensive budget plan immediately, Friday’s ruling by the U.S. District Court takes the state’s finances from horrific to catastrophic,” Mendoza said in a statement. “A comprehensive budget plan must be passed immediately.”
The judge’s decision Friday comes about a month after she ruled that Illinois wasn’t in compliance with previous orders.
Plaintiff attorney John Mark Bouman had argued that the state’s offer of paying $150 million more a month wasn’t enough.
“We just don’t think that’s enough to secure continued access to health care for those covered by Medicaid,” Bouman told the judge. He argued any failure to increase the payments would pose “a dramatic threat to the system” as unpaid health care providers pull out.
Bouman said he was sympathetic to challenges the comptroller’s office faces and agreed that allotting more money to Medicaid bills would mean making unavoidable cuts to other state programs.
“The real answer,” he said, “is for the state to pass a budget.”