In a controversial move aimed at easing a huge Medicaid budget gap, Gov. Jim Edgar on Thursday imposed an 18-month rate reimbursement freeze on health-care institutions treating the poor.
James Reilly, Edgar’s chief of staff, said the state’s nursing home association had agreed to the rate freeze, as well as to longer delays in payment.
But Reilly said talks were continuing with the Illinois Hospital Association, which has threatened to file a federal lawsuit contending the state is unfairly keeping payments at inadequate levels to balance its budget.
“We are convinced the savings will be realized with far less disruption to health-care providers, and we are pleased to cooperate from our end,” Reilly said. The rate freeze, imposed by emergency rule, is expected to take effect Tuesday.
Meanwhile, a group of Senate Republicans and Democrats filed a bill Wednesday aimed at combating abuse in the Medicaid program. The bill, prompted by a nine-part Tribune series “Medicaid: System in Chaos,” would require an individual’s photograph on Medicaid eligibility cards and that pharmacy requests for Medicaid reimbursements include the name of the prescribing physician.
The bill also would require that a physician’s request for Medicaid reimbursement include a diagnosis and that the Department of Public Aid, which administers the Medicaid program, file Medicaid reimbursement requests according to both the service provider’s name and the recipient’s name.
“We can’t let the (Medicaid) system stay as it is,” said state Sen. Judith Baar Topinka (R-North Riverside), a co-sponsor of the bill and chairwoman of the Senate Health and Welfare Committee. “Public confidence is so eroded that we have to improve the system. People don’t want to see their tax money abused, and that is what’s happening.”
The Edgar administration’s rate freeze is designed to close a $280 million budget gap resulting from an underestimate of the costs of treating the indigent this fiscal year.
In July, Edgar, lawmakers and the hospital and nursing home groups had agreed to a schedule of rate increases, to begin in April. They also agreed to speed up payment to institutions to a 60-day cycle.
Instead, the fiscal crisis has kept payments at last year’s 87-day cycle, and Reilly said that payments may not be made for more than 100 days, pushing some of this year’s bills into the next fiscal year.
The administration’s decision came as House Democrats continued to assail Edgar over the budget gap, blasting the Republican governor for rolling current bills over to the next year.
Earlier this week, Democratic House Speaker Michael Madigan of Chicago led the chamber in calling on the state’s administrative rules committee to reject any emergency rate changes coming from the governor.
But Reilly tried to diffuse the blame, saying the staffs of the four legislative leaders and the hospitals all had access to the same data. “Yeah, we blew the number, but so did everybody else,” he said.
The Senate bill addresses several key problems highlighted in the Tribune series that documented Medicaid abuse by patients and providers, as well as mismanagement by the state Department of Public Aid, the agency that oversees the $4.8 billion-a-year program in Illinois.
The Tribune series identified numerous patients who eluded state reviewers and piled up more than 300 physicians visits, as well as accumulated thousands of dollars in prescription drugs.
The series found that Medicaid doesn’t require physicians to list a diagnosis on their billing forms, resulting in the program paying for millions of dollars in drugs and health care without knowing what was wrong with the patient. A physician’s name is also not required on pharmacy bills.
In addition, the series found that: Medicaid card abuse is widespread because the cards carry no photograph; tracking a patient’s Medicaid history is difficult because the system keeps information by provider, not patient; and the system provides inferior care to urban as well as rural residents.
The series, published last October and November, prompted the Illinois Department of Public Aid to hire more auditors in an effort to toughen the monitoring of patients and improve the state’s oversight of physicians, pharmacists and institutions providing health care services to the poor.
Topinka and Sen. Thomas Dunn (D-Joliet), another co-sponsor, said the Senate bill could be voted on as early as March. Both senators said they expected the measure to pass by a wide margin.
“There is strong bipartisan support in the Senate,” said Dunn. “I can’t envision any major objections to a bill that seeks to eliminate fraud.”
