By Jamey Dunn
The state’s safety net hospitals say Illinois should crack down on Medicaid eligibility instead of cutting rates paid to health care providers or services to those who truly need the program.
“Every day, I see people in my office, and I can’t imagine why in the world they are on the Medicaid roles. They have income, they have the means to obtain insurance,” Mark Newton, president and chief executive officer of Swedish Covenant Hospital in Chicago, said at a recent Illinois House committee hearing in Chicago.
“We have employees who elect not to take the coverage and go on Medicaid,” Newton said. “If an employer is offering health insurance today, why is somebody allowed to go on Medicaid?”
Newton said his workers also see indications of potential fraud. He said patients with pacemakers come in with their pacemaker registered under one name and their Medicaid coverage under another name. “Now how does that happen?” he asked.
Newton joined a group of the so-called safety net hospitals, which are located in low-income and medically underserved areas of the state, that put forth a list of suggestions as the state looks to cut $2.7 billion in Medicaid growth. Administrators of hospitals in the association say that without the care they provide, many Illinoisans would find themselves in health care deserts with no other options nearby. Many of the hospitals are also the largest employer in the areas they serve.
One of the key components of the proposal from the Illinois Association of Safety-Net Hospitals is tightening they way the state checks eligibility. The group estimates that100,000 to 300,000 patients currently on the Medicaid rolls earn too much to qualify for the program and that $400 million to $1.2 billion could be saved if Illinois took more steps to ensure that all who are receiving Medicaid benefits actually qualify for them.
“The system is not being administered effectively to put those dollars where they’re going to have the most impact,” Newton said.
But the state has already hit roadblocks on efforts to determine eligibility. It took a year for the federal government to approve a plan to check state records to ensure that applicants are residents of the state. The feds have yet to make a decision about another provision that would require applicants to regularly provide proof of income.
The association also says Illinois should capture more federal matching dollars and determine if some patients or services may be covered by alternative options, such as the federal Medicare program. The plan also calls for charging a $10 copay to patients who go to the emergency room for nonemergency care. A federal waiver would be required for such a move. Overall, the group says the proposal could save about $1.4 billion. The hospitals are calling on lawmakers to consider the proposal before cutting provider rates or care to patients.
Administrators from the safety net hospitals said that reductions to provider rates and services covered by Medicaid could leave the already fragile institutions “near or at complete breakdown.”
Dennis Ryan, vice president of external affairs at the Holy Cross Hospital, said his institution on the south side of Chicago already came “perilously close to closure” four years ago.
“Lives and well beings can be at stake, and undue cost cutting risks are both unethical and immoral,” Ryan said. “You cannot fly an airplane without a wing.”
Providers said that the looming $2.7 billion in cuts is already affecting their operations by making it difficult to borrow money to cover budget shortfalls. “A number of banks are now telling us that they will not extend letters of credit because Illinois is not the place that they want to do business,” Newton said.
Showing posts with label hospitals. Show all posts
Showing posts with label hospitals. Show all posts
Tuesday, April 10, 2012
Wednesday, September 23, 2009
The elusive standard of charitable care
By Bethany Jaeger
The Illinois Supreme Court has to decide which standard to use when considering a highly anticipated case about what not-for-profit hospitals have to do to qualify for local property tax exemptions. While the case specifically deals with Provena Covenant Medical Center in Champaign County, the court decision has potential to affect about 160 nonprofit hospitals throughout Illinois.We previewed the six-year-old case in the September edition of Illinois Issues magazine. Provena filed for a property tax exemption in 2002 based on its status as a charitable organization, but the Illinois Department of Revenue denied the charitable exemption two years later. The hospital later applied for an exemption based on its status as a religious institution. (See a timeline of the case here.)
Both sides presented oral arguments before the Illinois Supreme Court this morning with drastically different beliefs about what should count when considering charitable exemptions and what evidence the court should consider in deference when determining whether Provena qualifies for that property tax exemption.
On one hand, Provena’s lawyer, Patrick Coffey with Locke, Lord, Bissell & Liddell in Chicago, argued that the justices should undertake a brand new review of whether the denial of the hospital’s charitable exemption violates the state Constitution. The state charter gives the General Assembly authority to exempt “property of the state, units of local government and school districts and property used exclusively for agricultural and horticultural societies, and for school, religious, cemetery and charitable purposes.”
On the other hand, the Illinois Department of Revenue, represented by Assistant Attorney General Evan Siegel, argued that the justices should give deference to the lower administrative orders issued by department director Brian Hamer and affirmed by the 4th District Court of Appeals. The thinking is that the Department of Revenue has expertise in property tax matters and was the authoritative body reviewing evidence provided by 15 witnesses and two experts during administrative hearings, so the court should give a high level of respect to the administrative findings when reviewing the case.
Which standard the court chooses affects how it would consider a 2004 recommendation of an administrative law judge. After the administrative hearings, the administrative law judge found that the hospital met the standard for charitable exemption. Hamer, however, disagreed. He had the final administrative opinion to reject the tax exemption. He deemed some of the evidence irrelevant and decided that Provena didn’t qualify for a tax exemption because it dedicated only 0.7 percent of its revenue that year to providing so-called charity care to 302 patients out of 110,000 patients admitted. “I find that the property does not qualify for the charitable institution tax exemption because the evidence is clear that this property is not used exclusively for charitable purposes,” he wrote.
The two sides further disagree about whether a certain percentage of charitable care should be a deciding factor in its tax-exempt status. Coffey argued that the standard for whether not-for-profit hospitals qualify for property tax exemptions should not be whether the hospitals designate a certain percentage of their income to providing free care to needy patients.
“That has never been the requirement, and it shouldn’t be the requirement,” he said to five of seven justices. Justices Thomas Kilbride of Rock Island and Rita Garman of Danville recused themselves and did not participate in the oral arguments.
Instead, Coffey said the determination should be on a case-by-case basis and should count the hospital’s total contribution to the community. “It’s not out of bounds to consider how much free care was given, but they have also gone beyond.” For instance, Provena operates Crisis Nursery, a 24/7 child abuse prevention and support service and provided more than $13.5 million on such “community benefits” in 2002, according to the hospital’s Supreme Court filing.
Siegel, however, argued that the dominant factor when deciding charitable exemptions is the primary use of the property. He refers to a six-point test established by a 1968 Illinois Supreme Court case Methodist Old Peoples Home v. Bernard Korzen. (Read the six criteria for nonprofit institutions in our September issue.)
“It doesn’t matter whether an organization itself … is a charitable organization,” Siegel said. “What matters on that analysis is whether it is using the property for a charitable purpose.” He added that tax exemptions are granted on an annual basis. “Just because you have it for one year doesn’t mean you have it for every year.”
Justice Robert Thomas asked whether the state expected the court to set a minimum requirement of a certain percentage of charitable care. Siegel said no, that the court already determined in 1907 that a hospital must provide a “substantial amount” of free care. “All the court need do in this case on this critical factor is decide that 0.7 percent revenues in a year that only 302 people out of 110,000 admissions obtained free and discounted care is not substantial.”
In addition to the charitable exemption, the two sides differed about whether the religious exemption should be part of the court’s consideration because of a discrepancy in the record.
Chief Justice Thomas Fitzgerald questioned several times how Hamer could have ruled that Provena did not qualify for a charitable exemption based on its religious affiliation when the administrative law judge never addressed that question. “I’m still puzzled at how the director based his finding upon a statement that wasn’t there.”
“Well, it was mistaken, absolutely,” Siegel responded. “But I believe that he read the [administrative law judge’s] opinion as not giving much weight to the religious exemption.”
Coffey argued that the administrative law judge did not address the religious exemption because she already found that an exemption was warranted as a charitable organization, and Hamer rejected the religious exemption without explanation.
In addition to differing over other details, the two sides predominantly argued that their opponents were trying to change the standard of determining whether hospitals qualify for property tax exemptions.
“Provena [provided] free and reduced care to just 302 patients,” Siegel said. “That’s not a large proportion. The primary use of the property is treatment of patients with insurance. By arguing that 0.7 percent is sufficient, Provena is trying to alter the constitutional standard. And it is for this court, not the legislature, to determine what constitutes a constitutional charitable use.”
Coffey countered that the state is the one trying to base a decision on a standard that has never been used by the court, referring to the use of a certain percentage needed to qualify for a tax exemption. He said a proposal to set a minimum percentage of charitable care should go through the legislative process, not the court system.
It is up to the court to decide which standard to use. Although Justices Kilbride and Garman recused themselves and are not required to disclose their reasons, a majority opinion still requires four justices, according to Joseph Tybor, Illinois Supreme Court spokesman.
Tuesday, May 05, 2009
Personnel issue dominates reform hearing
By Bethany Jaeger
Illinois Democrats and Republicans appeared split on whether to use legislation to fire two executive staff members of a hospital planning board plagued by corruption early in former Gov. Rod Blagojevich’s administration in 2003 and 2004. Controversy is nothing new to the Health Facilities Planning Board, and that’s not unique to Illinois. See the National Conference of State Legislators for background on the widespread debate.
Today’s debate, while tense and awkward at times, opens the door for more systemic questions about whether the legislature should fire individuals by name through legislation and whether the legislature can effectively remove politics from the hospital planning process altogether.
The process typically is designed to review hospital construction projects in an attempt to control costs and maintain access to critical health care services. Today’s bicameral legislative committee on government reform, however, didn’t focus on reforming the process (that was the focus of a previous legislative task force — its report is here). Members instead focused on whether the General Assembly should use legislation to terminate two high-level employees. Both are subject to harsh criticism from a hospital executive who blew the whistle on what turned out to be deep-rooted corruption in 2003.
House Republicans, led by Minority Leader Tom Cross, want to fire Jeffrey Mark, executive secretary of the Health Facilities Planning Board, and David Carvalho, a deputy director of the Illinois Department of Public Health that oversees the employees. “In our efforts to continue to fumigate state government, this is another board that needs to be sanitized and start fresh with new players from top to bottom,” Cross said.
Cross added, however: “While we are not alleging that either of the two that held these positions themselves did anything illegal, corrupt activity happened under their watch. They were there before, during and after corrupt activity occurred.”
Both were hired in 2003 and served for six months during a scheme that convicted former board member Stuart Levine and Blagojevich fundraiser Tony Rezko of federal corruption. According to federal prosecutors, Levine and Rezko schemed with a handful of others, including Blagojevich, to rig the state panel to reward themselves and political allies.
Both Mark and Carvalho testified to the committee that they had nothing to do with the schemes and notified appropriate authorities when they noticed irregularities in the way the board operated. For instance, they cited a situation when the board stopped in the middle of taking a vote during a public hearing to sway one more member to support granting a construction permit to a particular hospital project.
“It happened on my watch, yes it did,” Mark said to the committee. “Was I aware of it? Absolutely not. Should I have been aware of it? I’m not sure.” He said he was a subordinate who immediately reported questionable practices to the agency’s lawyer and inspector general. He later cooperated with the U.S. attorney’s office during the investigation.
Carvalho said he, too, conveyed his concerns lawyers and the inspector general. He also said Rezko’s trial revealed he and Levine, in fact, were trying to get rid of him because he was a “pain in the butt.” “What I have tried to do throughout the process is to stand in the way of people, both who were members of the board and people who were applicants, who were trying to get from this process what was not due them under the rules. And today I do feel like that person standing in front of a steamroller for simply doing my job.”
One who did report the suspicious activity directly to federal authorities was Pam Davis, president of Edward Hospital and Health Services in Naperville. She cooperated with the FBI for eight months by secretly recording phone calls and meetings related to her repeated application for a construction permit to build a new hospital in the rapidly growing village of Plainfield. She was pressured to hire a specific construction firm owned by Jacob Kiferbaum, who was scheming with Rezko. “If I did not use their services, I would never have this hospital approved,” she said. The Plainfield hospital project still has not been approved by the board.
Davis stopped short of alleging that Mark and Carvalho acted illegally, but she supports the House Republicans’ efforts to oust them from public office for allegedly protecting the status quo with outdated and unfair regulations and for failing to speak out during irregularities in the board’s proceedings. “While not pointing to any legalities by either of these two public officials, I can only imagine that the corrupt board members felt totally emboldened and powered by this lack of transparency.”
Carvalho said during his testimony: “Contrary to the suggestions of the CEO, the staff of the Health Facilities Planning Board, and I, in particular, are, in fact, grateful to her for her courageous efforts to expose the corruption of that prior board.”
Mark said: “I observed the same things she observed.” He said he felt “confused and surprised, and as I stated before the committee, I consulted the appropriate authorities.”
Mark was recommended for his position more than five years ago by Rezko. “It’s a matter of public record that my name was submitted by Tony Rezko,” Mark said after the hearing. “I met the man once prior to him taking my name. People can perceive whatever they want. I think my background and my record speak for itself. I’m very proud of what we’ve accomplished the last five years. I’m very not proud of what occurred during my first six months in this position.”
Sen. Susan Garrett, a Lake Forest Democrat who has been working on the health planning process for a year, said the current controversy could be rooted in bitterness over the panel’s decision to repeatedly deny Davis’ proposal for a Plainfield hospital. “It appears that the process for decades has been political, and that has been the downfall of this whole health facilities planning process. It was our hope and intent to remove the politics,” Garrett said.
“As somebody who is trying to be impartial and bipartisan, we thought we resolved that,” she added. “And I don’t think that has happened. And, quite frankly, I’m not sure today resolved any of the issues that were brought up three days ago or three years ago or three decades ago.”
The measure, SB 1905 (Senate-approved version here), is slated for consideration in a House committee Wednesday afternoon.
Quinn previously tried to name a new chairman of the board, Dr. Quentin Young, in April, but Young soon resigned because of a possible conflict of interest. (He realized that his former practice owns part of a property that rents space to a health care provider. State rules prevents the chair from having financial ties to any facility licensed by the state.)
Illinois Democrats and Republicans appeared split on whether to use legislation to fire two executive staff members of a hospital planning board plagued by corruption early in former Gov. Rod Blagojevich’s administration in 2003 and 2004. Controversy is nothing new to the Health Facilities Planning Board, and that’s not unique to Illinois. See the National Conference of State Legislators for background on the widespread debate.
Today’s debate, while tense and awkward at times, opens the door for more systemic questions about whether the legislature should fire individuals by name through legislation and whether the legislature can effectively remove politics from the hospital planning process altogether.
The process typically is designed to review hospital construction projects in an attempt to control costs and maintain access to critical health care services. Today’s bicameral legislative committee on government reform, however, didn’t focus on reforming the process (that was the focus of a previous legislative task force — its report is here). Members instead focused on whether the General Assembly should use legislation to terminate two high-level employees. Both are subject to harsh criticism from a hospital executive who blew the whistle on what turned out to be deep-rooted corruption in 2003.
House Republicans, led by Minority Leader Tom Cross, want to fire Jeffrey Mark, executive secretary of the Health Facilities Planning Board, and David Carvalho, a deputy director of the Illinois Department of Public Health that oversees the employees. “In our efforts to continue to fumigate state government, this is another board that needs to be sanitized and start fresh with new players from top to bottom,” Cross said.
Cross added, however: “While we are not alleging that either of the two that held these positions themselves did anything illegal, corrupt activity happened under their watch. They were there before, during and after corrupt activity occurred.”
Both were hired in 2003 and served for six months during a scheme that convicted former board member Stuart Levine and Blagojevich fundraiser Tony Rezko of federal corruption. According to federal prosecutors, Levine and Rezko schemed with a handful of others, including Blagojevich, to rig the state panel to reward themselves and political allies.
Both Mark and Carvalho testified to the committee that they had nothing to do with the schemes and notified appropriate authorities when they noticed irregularities in the way the board operated. For instance, they cited a situation when the board stopped in the middle of taking a vote during a public hearing to sway one more member to support granting a construction permit to a particular hospital project.
“It happened on my watch, yes it did,” Mark said to the committee. “Was I aware of it? Absolutely not. Should I have been aware of it? I’m not sure.” He said he was a subordinate who immediately reported questionable practices to the agency’s lawyer and inspector general. He later cooperated with the U.S. attorney’s office during the investigation.
Carvalho said he, too, conveyed his concerns lawyers and the inspector general. He also said Rezko’s trial revealed he and Levine, in fact, were trying to get rid of him because he was a “pain in the butt.” “What I have tried to do throughout the process is to stand in the way of people, both who were members of the board and people who were applicants, who were trying to get from this process what was not due them under the rules. And today I do feel like that person standing in front of a steamroller for simply doing my job.”
One who did report the suspicious activity directly to federal authorities was Pam Davis, president of Edward Hospital and Health Services in Naperville. She cooperated with the FBI for eight months by secretly recording phone calls and meetings related to her repeated application for a construction permit to build a new hospital in the rapidly growing village of Plainfield. She was pressured to hire a specific construction firm owned by Jacob Kiferbaum, who was scheming with Rezko. “If I did not use their services, I would never have this hospital approved,” she said. The Plainfield hospital project still has not been approved by the board.
Davis stopped short of alleging that Mark and Carvalho acted illegally, but she supports the House Republicans’ efforts to oust them from public office for allegedly protecting the status quo with outdated and unfair regulations and for failing to speak out during irregularities in the board’s proceedings. “While not pointing to any legalities by either of these two public officials, I can only imagine that the corrupt board members felt totally emboldened and powered by this lack of transparency.”
Carvalho said during his testimony: “Contrary to the suggestions of the CEO, the staff of the Health Facilities Planning Board, and I, in particular, are, in fact, grateful to her for her courageous efforts to expose the corruption of that prior board.”
Mark said: “I observed the same things she observed.” He said he felt “confused and surprised, and as I stated before the committee, I consulted the appropriate authorities.”
Mark was recommended for his position more than five years ago by Rezko. “It’s a matter of public record that my name was submitted by Tony Rezko,” Mark said after the hearing. “I met the man once prior to him taking my name. People can perceive whatever they want. I think my background and my record speak for itself. I’m very proud of what we’ve accomplished the last five years. I’m very not proud of what occurred during my first six months in this position.”
Sen. Susan Garrett, a Lake Forest Democrat who has been working on the health planning process for a year, said the current controversy could be rooted in bitterness over the panel’s decision to repeatedly deny Davis’ proposal for a Plainfield hospital. “It appears that the process for decades has been political, and that has been the downfall of this whole health facilities planning process. It was our hope and intent to remove the politics,” Garrett said.
“As somebody who is trying to be impartial and bipartisan, we thought we resolved that,” she added. “And I don’t think that has happened. And, quite frankly, I’m not sure today resolved any of the issues that were brought up three days ago or three years ago or three decades ago.”
The measure, SB 1905 (Senate-approved version here), is slated for consideration in a House committee Wednesday afternoon.
Quinn previously tried to name a new chairman of the board, Dr. Quentin Young, in April, but Young soon resigned because of a possible conflict of interest. (He realized that his former practice owns part of a property that rents space to a health care provider. State rules prevents the chair from having financial ties to any facility licensed by the state.)
Tuesday, April 21, 2009
Health care scare
By Hilary Russell
State employees who want to decide which doctor they see or what hospital they are admitted to may have to re-think their health care options.
According to the legislative Commission on Government Forecasting and Accountability, state employees collectively would be on the hook for $200 million more for their health insurance plans. The commission met with medical providers today to determine whether existing contracts should be renewed for next fiscal year, which starts July 1.
Gov. Pat Quinn’s administration is seeking a health insurance policy that would charge state employees more in monthly premiums if they chose more flexible plans, as opposed to a managed care policy. For example, employees enrolled in the most flexible plans currently pay about $90 a month. Under the administration’s proposal, that premium would increase to nearly $310.
Retirees also would pay more, under Quinn’s proposed operating budget. If approved by the General Assembly, retirees who are not enrolled in Medicare would see the biggest increase. They currently pay about $13 a month for state health benefits. That would increase to about $583 a month.
“That’s a big change,” said Rep. Frank Mautino, a Spring Valley Democrat. “It’s a change from $13 a month, which is unrealistic, to $7,000 a year. People have worked under that and retired under the premise that the state would pay the predominant share of their insurance. Now the governor’s budget assumes that they will pick up about one third of the cost, and that will come as a big surprise.”
The increase in premiums is, in part, an effort to encourage employees to sign up for less expensive managed care plans. The flexible plans allow patients to see any doctor they prefer, while managed care plans limit patients to see doctors on a pre-approved list.
Rep. Elaine Nekritz, a Northbrook Democrat, said that with the increase comes the question of how to pay for it. “What one doesn’t pick up, the other has to. It’s not going to be easy to tell employees that their premiums just increased 5,000 percent. On the other hand, can we come up with another $200 million? Where does it come from? I don’t know. Ultimately, those are the questions we have to work through in the next six weeks.”
Collectively, the projection for Illinois’ State Employees’ Group Health Insurance Liability tops out at $2.1 billion for the next fiscal year, compared with $1.9 billion last year, according to the Commission on Government Forecasting and Accountability.
Hospital board chair steps down
By Jamey Dunn
Dr. Quentin Young withdrew himself today from consideration as the new chair of the Illinois Health Facilities Planning Board because of a possible conflict of interest.
Last Friday, Gov. Pat Quinn named Young, a health care advocate who previously served as Quinn’s physician, to head the board.
According to a statement from Quinn, Young withdrew his name when he realized that his former practice owns part of a property that rents space to a health care provider. Young still has a stake in the practice, and Illinois law bars the head of the hospital planning board from having financial ties to any institution licensed under the state’s hospital licensing act.
State employees who want to decide which doctor they see or what hospital they are admitted to may have to re-think their health care options.
According to the legislative Commission on Government Forecasting and Accountability, state employees collectively would be on the hook for $200 million more for their health insurance plans. The commission met with medical providers today to determine whether existing contracts should be renewed for next fiscal year, which starts July 1.
Gov. Pat Quinn’s administration is seeking a health insurance policy that would charge state employees more in monthly premiums if they chose more flexible plans, as opposed to a managed care policy. For example, employees enrolled in the most flexible plans currently pay about $90 a month. Under the administration’s proposal, that premium would increase to nearly $310.
Retirees also would pay more, under Quinn’s proposed operating budget. If approved by the General Assembly, retirees who are not enrolled in Medicare would see the biggest increase. They currently pay about $13 a month for state health benefits. That would increase to about $583 a month.
“That’s a big change,” said Rep. Frank Mautino, a Spring Valley Democrat. “It’s a change from $13 a month, which is unrealistic, to $7,000 a year. People have worked under that and retired under the premise that the state would pay the predominant share of their insurance. Now the governor’s budget assumes that they will pick up about one third of the cost, and that will come as a big surprise.”
The increase in premiums is, in part, an effort to encourage employees to sign up for less expensive managed care plans. The flexible plans allow patients to see any doctor they prefer, while managed care plans limit patients to see doctors on a pre-approved list.
Rep. Elaine Nekritz, a Northbrook Democrat, said that with the increase comes the question of how to pay for it. “What one doesn’t pick up, the other has to. It’s not going to be easy to tell employees that their premiums just increased 5,000 percent. On the other hand, can we come up with another $200 million? Where does it come from? I don’t know. Ultimately, those are the questions we have to work through in the next six weeks.”
Collectively, the projection for Illinois’ State Employees’ Group Health Insurance Liability tops out at $2.1 billion for the next fiscal year, compared with $1.9 billion last year, according to the Commission on Government Forecasting and Accountability.
Hospital board chair steps down
By Jamey Dunn
Dr. Quentin Young withdrew himself today from consideration as the new chair of the Illinois Health Facilities Planning Board because of a possible conflict of interest.
Last Friday, Gov. Pat Quinn named Young, a health care advocate who previously served as Quinn’s physician, to head the board.
According to a statement from Quinn, Young withdrew his name when he realized that his former practice owns part of a property that rents space to a health care provider. Young still has a stake in the practice, and Illinois law bars the head of the hospital planning board from having financial ties to any institution licensed under the state’s hospital licensing act.
Thursday, June 19, 2008
More people on the move and Medicaid
Abby Ottenhoff, Gov. Rod Blagojevich’s communications director based in Chicago, is resigning. She’s the third high-level employee in the governor’s office to step down within a month.
Deputy Gov. Sheila Nix resigned this month and was replaced by Bob Greenlee, a former chief of staff and deputy director of the governor’s budget office. Springfield-based spokeswoman Rebecca Rausch stepped down to join a St. Louis-based public relations firm and is replaced by Brian Williamsen, a former TV reporter in Springfield and in South Carolina.
Ottenhoff said in an e-mail that she plans to take some time off to travel and visit family and friends before returning to the professional world. She’s spent five years as the governor’s spokeswoman and previously was an aide to House Speaker Michael Madigan.
She’s replaced by Lucio Guerrero, deputy assessor at the Cook County assessor’s office since 2006. He also was a reporter, writing for the Chicago Sun-Times and its affiliate, the Post-Tribune in Indiana. He also worked for newspapers in Delaware and Florida, according to the governor’s office.
Transparency troubles
By Patrick O’Brien and Bethany Jaeger
The state auditor general’s office had a hard time getting timely and accurate fiscal information about a $1.2 billion Medicaid program overseen by the Illinois Department of Healthcare and Family Services, according to an audit released this week.
Meanwhile, the state is pursuing federal approval to implement a similar but larger Medicaid program that reimburses hospitals caring for the most needy patients.
The audit notes “untimely and inaccurate submission” of records regarding the program, referred to as a hospital assessment because hospitals pay a tax and then get back $3.6 billion from the federal government over three years. Those reimbursements were delayed last year as part of political infighting, but state officials agreed to borrow money to secure federal matching funds and pay hospitals last fall (see more here by scrolling down).
The problem, according to the audit, was a discrepancy over the appropriate way to record the complex transactions of the hospital assessment program. The audit also notes that the department delayed the reporting process by hiring private consultants, which eventually agreed with the auditor’s findings.
Annie Thompson, spokeswoman for the department, said hiring external consultants on such a complicated, $1.2 billion program is routine. Director Barry Maram also wrote in a letter to the auditor general: “Our overall concern is that a misinterpretation could be made that the assessment liability is a strain on state resources, when in fact there was no strain but instead a net gain to the state.” The department agreed with many of the auditor’s other findings.
The department previously has been criticized for “deficient” accounting practices, as noted by previous audits (here and here) and by Comptroller Dan Hynes. Regarding the most recent audit, Hynes said in an e-mail Thursday: “Accuracy and timeliness of fiscal information from state agencies is a critical concern affecting the state’s ability to produce official financial statements that portray the state’s fiscal profile and creditworthiness. That process is potentially jeopardized by the conditions noted by the auditor general.”
As for the future hospital assessment program, which is pending federal approval, the plan’s structure is more important than some bookkeeping concerns, said Sen. Dale Righter, a Mattoon Republican. “We don’t want to give the federal government excuses to deny the assessment. It is troubling.”
Deputy Gov. Sheila Nix resigned this month and was replaced by Bob Greenlee, a former chief of staff and deputy director of the governor’s budget office. Springfield-based spokeswoman Rebecca Rausch stepped down to join a St. Louis-based public relations firm and is replaced by Brian Williamsen, a former TV reporter in Springfield and in South Carolina.
Ottenhoff said in an e-mail that she plans to take some time off to travel and visit family and friends before returning to the professional world. She’s spent five years as the governor’s spokeswoman and previously was an aide to House Speaker Michael Madigan.
She’s replaced by Lucio Guerrero, deputy assessor at the Cook County assessor’s office since 2006. He also was a reporter, writing for the Chicago Sun-Times and its affiliate, the Post-Tribune in Indiana. He also worked for newspapers in Delaware and Florida, according to the governor’s office.
Transparency troubles
By Patrick O’Brien and Bethany Jaeger
The state auditor general’s office had a hard time getting timely and accurate fiscal information about a $1.2 billion Medicaid program overseen by the Illinois Department of Healthcare and Family Services, according to an audit released this week.
Meanwhile, the state is pursuing federal approval to implement a similar but larger Medicaid program that reimburses hospitals caring for the most needy patients.
The audit notes “untimely and inaccurate submission” of records regarding the program, referred to as a hospital assessment because hospitals pay a tax and then get back $3.6 billion from the federal government over three years. Those reimbursements were delayed last year as part of political infighting, but state officials agreed to borrow money to secure federal matching funds and pay hospitals last fall (see more here by scrolling down).
The problem, according to the audit, was a discrepancy over the appropriate way to record the complex transactions of the hospital assessment program. The audit also notes that the department delayed the reporting process by hiring private consultants, which eventually agreed with the auditor’s findings.
Annie Thompson, spokeswoman for the department, said hiring external consultants on such a complicated, $1.2 billion program is routine. Director Barry Maram also wrote in a letter to the auditor general: “Our overall concern is that a misinterpretation could be made that the assessment liability is a strain on state resources, when in fact there was no strain but instead a net gain to the state.” The department agreed with many of the auditor’s other findings.
The department previously has been criticized for “deficient” accounting practices, as noted by previous audits (here and here) and by Comptroller Dan Hynes. Regarding the most recent audit, Hynes said in an e-mail Thursday: “Accuracy and timeliness of fiscal information from state agencies is a critical concern affecting the state’s ability to produce official financial statements that portray the state’s fiscal profile and creditworthiness. That process is potentially jeopardized by the conditions noted by the auditor general.”
As for the future hospital assessment program, which is pending federal approval, the plan’s structure is more important than some bookkeeping concerns, said Sen. Dale Righter, a Mattoon Republican. “We don’t want to give the federal government excuses to deny the assessment. It is troubling.”
Friday, May 30, 2008
The imperfect storm
By Bethany JaegerA tornado warning interrupted the House and Senate this evening before they could debate larger portions of the state operating budget, further delaying the ability to approve a spending plan before the constitutional deadline of midnight Saturday.
We all had to head to the basement of the Statehouse, where tunnels connect buildings on the Capitol complex. Amanda Vinicky, reporter for WUIS public radio station out of the University of Illinois at Springfield, caught up with House Speaker Michael Madigan in one of the tunnels. We listened to her audio file. She asked the speaker about the status of the budget, the leadership style of the governor and the lack of trust plaguing the democratic process.
Madigan’s advice for others was to consider the past five or six years — and to “prepare for the worst.”
The General Assembly is expected to approve a state budget before the deadline, but the budget also is expected to contain a rather large hole. Madigan said the legislature’s job is to approve the spending authority. The actual spending is up to the governor. “If he feels that some of those numbers should be changed, he has a reduction veto.”
The state Constitution grants the governor the power to strike out portions of the budget or to reduce the amount of money dedicated to specific programs.
The lawmakers also are considering the capital plan drafted by former U.S. House Speaker Dennis Hastert and Southern Illinois University President Glenn Poshard, who were recruited by Gov. Rod Blagojevich to bring everyone together on a multi-year plan for construction projects. Madigan has not attended any of the meetings with the negotiators and the other legislative leaders. Of the governor’s previous meetings, Madigan said, “I have found meeting with Gov. Blagojevich to be totally non-productive, and so we decided to take a different approach.” That included sending his majority leader, Rep. Barbara Flynn Currie, in his place.
The $31 billion capital plan has grown to $33 billion under the Senate proposal (see below). It now has a specific list of projects that would be funded, something legislators demanded before they could consider approving a deal. But rank-and-file legislators, particularly Democrats, continue to question whether they could trust Blagojevich to release the money for projects in their districts. Madigan reiterated the reason behind lawmakers’ hesitation: “It’s all about trust. It’s all about trust and whether people are prepared to trust Gov. Blagojevich and trust his record of broken promises.”
The legislative leaders are meeting with the governor in his Statehouse office as I post this. The Senate is expected to meet in committees yet this evening to discuss the capital plan and the proposed funding sources, including leasing the Illinois Lottery; expanding gaming to include a new and two additional riverboats, as well as expanding positions at existing facilities; and transferring money from the state’s Road Fund and the general fund. The House is done for the evening but will start with committees at 8:30 a.m. Saturday. Expect a long day and night.
Here are a few other items of interest that unfolded earlier Friday:
Potential CeaseFire agreement
Rep. Susana Mendoza, a Chicago Democrat, said she’s able to vote for a state budget now that an agreement has been made with Senate Democrats to reinsert $6.25 million into the state budget for a CeaseFire, gun violence prevention program.
The CeaseFire campaign employs ex-convicts to work as mediators to diffuse tension in communities with “hot spots” of gun and gang violence. They also connect clients to community services for jobs, education and other social services. The program is administered by the Chicago Project for Violence Prevention located at the University of Illinois at Chicago’s School of Public Health.
Gov. Rod Blagojevich last summer vetoed $6 million for CeaseFire from state budget as part of a series of budget cuts totaling about $460 million.
In early May, a Northwestern University study announced the program as successful in deterring gun violence. Professor Wesley Skogan at the Evanston school found that the number of shootings dropped between 16 percent and 34 percent in four Chicago neighborhoods with CeaseFire programs. Six CeaseFire communities saw a 42 percent average reduction in shootings during the first year of the program.
The study also shows that the program has lasting effects on such other challenges as getting jobs, returning to school or disengaging from gangs. Clients interviewed for the survey also reported that they built relationships with their mediators so that if, for instance, they felt tempted to use drugs again, they could call their mediator in the middle of the night.
The study concluded that the program saves the state and the taxpayers money by decreasing the number of emergency room visits and the number of criminals in the justice system.
Potential Medicaid reimbursements for hospitals
The state could garner up to $4.5 billion in federal funds over five years that Illinois would redistribute to hospitals, primarily facilities that care for the most needy patients. The legislature is advancing a plan that would need the governor’s signature and the feds’ approval.
About 200 hospitals in the state already have participated in a so-called hospital assessment program, collecting a total of $$2.3 billion over three years. That program is set to expire June 30. The plan approved by the House Friday afternoon (and expected to win Senate approval Saturday) would create a new program for the next five years.
The new plan would be larger than the existing program. It would distribute more than $640 million a year to the hospitals that voluntarily pay an assessment (a.k.a. tax) that leverages federal matching funds. This plan also differs in that more hospitals, particularly in the Chicago suburbs, would be considered “losers,” meaning they would pay out more than they collected in federal reimbursements. The feds view that favorably because the system would better redistribute the money to the most critical and needy hospitals in rural and low-income areas, says House Majority Leader Barbara Flynn Currie, a Chicago Democrat.
She added the state also needs the plan because without federal approval, “we will be looking for substantial dollars to fill a very deep hole in the state’s Medicaid budget.”
Sen. Jeff Schoenberg, an Evanston Democrat sponsoring the measure in his chamber, said hospitals agreed to the plan. “Everybody recognized that we all have a stake in it together, and without this infusion of new federal Medicaid funding, many hospitals in the state will have to either curtail their services or close their doors entirely. And we simply cannot allow that to happen.”
That’s partially because without the program, hospitals on average would be paid only 64 percent of what it actually costs to deliver the care, said Howard Peters with the Illinois Hospital Association.
The state also leverages about $130 million that’s left over from the Medicaid reimbursement program to obtain additional federal matching funds. They must be spent on health care, including services for mental health, developmental disabilities and long
-term care. Schoenberg said that he would like to use some of the excess money for substance abuse and treatment programs, many of which have long waiting lists. That would require legislative approval.Just for fun
To the right: Rep. Mike Fortner, a West Chicago Republican, explains the physics of a tornadic cell to fellow legislators and lobbyists after a tornado was sighted in Springfield.
Wednesday, September 12, 2007
The art of compromise
Gov. Rod Blagojevich attempted to execute another power play to make House Speaker Michael Madigan seem like the problem in state government. The governor charges the speaker and his staff with violating the state constitution for delaying action on the governor’s budget cuts. The good news is that one separate compromise allowed the state to distribute overdue payments to hospitals. The bad news is who knows whether the political maneuvering will ever stop long enough for the four legislative leaders and the governor to compromise on a capital budget and mass transit subsidies.
The governor sues again
Blagojevich sued Madigan two weeks ago in hopes that the courts would rule that the speaker has to call special sessions at the date and time specified by the governor. Blagojevich is now suing Madigan’s House clerk, Mark Mahoney. The lawsuit, filed in Sangamon County court September 11, charges that the clerk should have entered the governor’s budget vetoes into public record as soon as the House met for session September 4.
Part of the reason the vetoes weren’t recorded then is because Madigan scheduled 19 budget hearings across the state to discuss “Blagojevich’s budget savagery.” The hearings also are designed to build support for overriding those vetoes. Steve Brown, the speaker’s spokesman, said the same about this lawsuit as he said about the suit against Madigan. “This is just a waste of resources and really no merit to the case at all. And the hearings will continue.”
The administration tried to defend the governor’s budget cuts before they were ripped to shreds by angry constituents. Agency directors held press conferences yesterday in Decatur, Marion and Kankakee, the first three sites of Madigan’s budget hearings. “They were in the same areas the House hearings are in because we feel it’s important to make sure these areas have the facts,” said Rebecca Rausch, the governor’s spokeswoman, in an e-mail.
The location of the hearings relate to the budget cuts that canned projects sought by House Democrats who have at some point bucked the administration’s priorities. For instance, Kankakee is represented by Democratic Rep. Lisa Dugan of Bradley. She requested grants for local fire and police departments to buy and update equipment, for sexual assault centers in Iroquois and Kankakee counties and for a domestic violence shelter. “He cut all of mine and considered it nonessential,” she said this morning. Why? “The Democratic House members lost everything that they requested, and I’m assuming that it’s for the reason that most of us believe, that is because unfortunately, the governor doesn’t like our stand on wanting to compromise on his health care plan.”
Dugan laughed out loud when asked about the governor suing the House clerk. “This is a sad state of affairs in the state of Illinois, and the governor seems to just want to continue to make it worse.”
So the governor is punishing people who don’t want to compromise on his health care plan, but lawmakers rejected his health care plan because the governor wouldn’t compromise on the funding source. We're running in circles following these disagreements. Brown, Madigan’s spokesman, blames the governor for not compromising. “He fails to persuade anybody to accept his point of view and refuses to accept a more reality-based proposal. Not a whole lot you can do about that.”
I know the feeling. There’s not a lot we can do about the sideshows going on around the state with little action in Springfield. And when action does return to the Capitol October 2 for the fall veto session, we’ll witness a series of shows about the budget overrides, a capital budget and transportation subsidies. The House is expected to have enough votes to override at least some of the governor's budget cuts, but who knows whether they'll have a chance in the Senate. And who knows whether the four caucuses will be able to compromise on a funding source — four new casinos, one new casino, no new casinos — to finance road and school construction projects. And who knows whether lawmakers are willing to stick their necks out by voting for a mass transit plan that raises taxes while knowing the governor will veto it. That would require the four caucuses, again, to compromise and agree to override his veto.
Hynes: Compromise minimizes damage for hospitals
Hospitals around the state have been waiting for reimbursements for the cost of caring for poor and uninsured patients. The reimbursements come through a hospital assessment program, where hospitals pay a tax and then get back $3.6 billion from the federal government over three years. A series of missteps and political infighting delayed the payments due to hospitals in March. In a rare act of teamwork, Illinois’ constitutional offices recently agreed to get an immediate infusion of cash through short-term borrowing. That cash will allow the state to disburse half of the $1.2 billion due to hospitals.
“Through cooperation of the governor’s office, the attorney general’s office, the treasurer and the comptroller, we’re going to be able to minimize the damage,” said Comptroller Dan Hynes. “But it still was unfortunate that it happened the way it did.”
The federal reimbursement and assessment will allow the loan to be repaid within the month, said Sen. Jeff Schoenberg, an Evanston Democrat and architect of the assessment plan. The delay, however, means the state can’t disburse the next $600 million installment until the General Assembly comes back to Springfield to approve the new spending authority. Schoenberg adds that it’s also unfortunate that the delay could taint the state’s opportunity to get federal approval for another assessment program when the current one expires after 2008. “It’s not far fetched for the federal regulators at the Centers for Medicare and Medicaid Services to question whether Illinois actually needs the money so badly if the state is taking so long to disburse the money once it receives federal approval,” he said.
The governor sues again
Blagojevich sued Madigan two weeks ago in hopes that the courts would rule that the speaker has to call special sessions at the date and time specified by the governor. Blagojevich is now suing Madigan’s House clerk, Mark Mahoney. The lawsuit, filed in Sangamon County court September 11, charges that the clerk should have entered the governor’s budget vetoes into public record as soon as the House met for session September 4.
Part of the reason the vetoes weren’t recorded then is because Madigan scheduled 19 budget hearings across the state to discuss “Blagojevich’s budget savagery.” The hearings also are designed to build support for overriding those vetoes. Steve Brown, the speaker’s spokesman, said the same about this lawsuit as he said about the suit against Madigan. “This is just a waste of resources and really no merit to the case at all. And the hearings will continue.”
The administration tried to defend the governor’s budget cuts before they were ripped to shreds by angry constituents. Agency directors held press conferences yesterday in Decatur, Marion and Kankakee, the first three sites of Madigan’s budget hearings. “They were in the same areas the House hearings are in because we feel it’s important to make sure these areas have the facts,” said Rebecca Rausch, the governor’s spokeswoman, in an e-mail.
The location of the hearings relate to the budget cuts that canned projects sought by House Democrats who have at some point bucked the administration’s priorities. For instance, Kankakee is represented by Democratic Rep. Lisa Dugan of Bradley. She requested grants for local fire and police departments to buy and update equipment, for sexual assault centers in Iroquois and Kankakee counties and for a domestic violence shelter. “He cut all of mine and considered it nonessential,” she said this morning. Why? “The Democratic House members lost everything that they requested, and I’m assuming that it’s for the reason that most of us believe, that is because unfortunately, the governor doesn’t like our stand on wanting to compromise on his health care plan.”
Dugan laughed out loud when asked about the governor suing the House clerk. “This is a sad state of affairs in the state of Illinois, and the governor seems to just want to continue to make it worse.”
So the governor is punishing people who don’t want to compromise on his health care plan, but lawmakers rejected his health care plan because the governor wouldn’t compromise on the funding source. We're running in circles following these disagreements. Brown, Madigan’s spokesman, blames the governor for not compromising. “He fails to persuade anybody to accept his point of view and refuses to accept a more reality-based proposal. Not a whole lot you can do about that.”
I know the feeling. There’s not a lot we can do about the sideshows going on around the state with little action in Springfield. And when action does return to the Capitol October 2 for the fall veto session, we’ll witness a series of shows about the budget overrides, a capital budget and transportation subsidies. The House is expected to have enough votes to override at least some of the governor's budget cuts, but who knows whether they'll have a chance in the Senate. And who knows whether the four caucuses will be able to compromise on a funding source — four new casinos, one new casino, no new casinos — to finance road and school construction projects. And who knows whether lawmakers are willing to stick their necks out by voting for a mass transit plan that raises taxes while knowing the governor will veto it. That would require the four caucuses, again, to compromise and agree to override his veto.
Hynes: Compromise minimizes damage for hospitals
Hospitals around the state have been waiting for reimbursements for the cost of caring for poor and uninsured patients. The reimbursements come through a hospital assessment program, where hospitals pay a tax and then get back $3.6 billion from the federal government over three years. A series of missteps and political infighting delayed the payments due to hospitals in March. In a rare act of teamwork, Illinois’ constitutional offices recently agreed to get an immediate infusion of cash through short-term borrowing. That cash will allow the state to disburse half of the $1.2 billion due to hospitals.
“Through cooperation of the governor’s office, the attorney general’s office, the treasurer and the comptroller, we’re going to be able to minimize the damage,” said Comptroller Dan Hynes. “But it still was unfortunate that it happened the way it did.”
The federal reimbursement and assessment will allow the loan to be repaid within the month, said Sen. Jeff Schoenberg, an Evanston Democrat and architect of the assessment plan. The delay, however, means the state can’t disburse the next $600 million installment until the General Assembly comes back to Springfield to approve the new spending authority. Schoenberg adds that it’s also unfortunate that the delay could taint the state’s opportunity to get federal approval for another assessment program when the current one expires after 2008. “It’s not far fetched for the federal regulators at the Centers for Medicare and Medicaid Services to question whether Illinois actually needs the money so badly if the state is taking so long to disburse the money once it receives federal approval,” he said.
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