Federal judge decides ruling on Illinois Medicaid payments

As the budget impasse continues and Illinois’ backlog grows to over $14 billion in unpaid bills, many Medicaid service providers have threatened to discontinue services to Illinois Medicaid recipients unless the state starts postmarking reimbursement checks faster. The issue was placed in the hands of U.S. District Court Judge Joan Lefkow to decide if reimbursement for Medicaid—the state’s most expensive government program—should be prioritized ahead of other government services.

Senate Republican lawmakers have been pushing for a full-year balanced budget to allow for the state to meet all of its obligations in a timely manner, including payments to Medicaid providers. Though progress was made in late May on a budget and reform package that would provide spending authority and necessary funding to pay down the state’s bills, Democrats ultimately walked away from the negotiating table. The General Assembly adjourned on May 31 having failed to pass a balanced fiscal plan for Illinois, despite Republicans calls for compromise on a spending plan and repeated offers to resume good-faith negotiations.

Under Lefkow’s previous court orders, Illinois was required to continue its Medicaid reimbursements, despite the budget stalemate, but has failed to keep up with the payments. Some health providers have expressed they cannot afford to wait up to six months for state reimbursement for the care of low-income Medicaid patients.

Lefkow announced her decision on June 7, and while the judge didn’t order the state to give precedence to Medicaid debts, she expressed agreement with attorneys of Medicaid patients and managed care organizations that Illinois has been deferring Medicaid payments in defiance of federal consent decrees. She also emphasized reimbursements to Medicaid service providers shouldn’t take the backseat while the state prioritizes other obligations.

Lefkow emphasized that Illinois should achieve “substantial compliance” with the previous consent decrees, and gave both sides a deadline of June 20 to reach a payment agreement. If they don’t come to an accord by the judge’s June 20 deadline, the parties can return to court for additional proceedings.

Jil Tracy

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