State payment delays expected to climb further

Friday, April 13, 2012

The amount of time it takes the state to pay doctors and other medical organizations that provide health care to state employees is expected to grow to nearly nine months, according to a report from the Commission on Government Forecasting and Accountability.

The report estimates that the payment cycle for preferred providers will rise from 218 days to 278 days, and non-preferred providers will be paid every 280 days. It estimates the payment cycle to health-maintenance organizations will go from five months to six months.

COGFA executive director Dan Long pointed to a $264 million proposed cut in general revenue fund spending on group health insurance as the reason for the longer payment cycles. Spending from GRF on group insurance is expected to drop from $1.44 billion to $1.17 billion under the governor’s proposed budget, according to the COGFA report.

“If you’re going to reduce the amount coming out of GRF, it’s going to extend the payment cycle,” Long said.

Up from 30 days

The state once paid its employees’ health care bills within 30 days, Long said.

Kelly Kraft, a spokeswoman for the governor’s budget office said the proposed cuts are aimed at reducing the payment cycle from 218 days.

“COGFA’s report provides a clear picture of what will likely happen if the changes called for by Governor Quinn do not take place,” Kraft said. “Governor Quinn cannot act alone, he needs continued support from the General Assembly in order to right the wrongs of years past so that we can enact the most responsible budget for the people of Illinois and return our state to sound financial footing.”

Mark Kuhn, chief administrative officer of Springfield Clinic, said if the problem gets much worse, his organization might have to look at curtailing the number of Medicaid patients or state employees seen by its doctors, nurses and other personnel.

The state owes Springfield Clinic $40 million, of which $35 million is overdue, Kuhn said. Clinic officials have pressed the area’s legislative delegation to deal with the problem.

“Two years ago, the state owed us $20 million. Now it’s become $40 million. Our message is, we will not allow it to be $60 million,” Kuhn said, noting that the problem is worse for smaller providers.

‘No great solutions’

Kuhn said the state should catch up on its old bills before creating new programs.

“Does that have an effect on our cash flow? Does it have an effect on our capital budgeting? Does that have an effect on our line of credit? Absolutely. Are they (the state) the single largest source of late payments? Absolutely. Do we have any great solutions? No,” he said.

A spokesman for St. John’s Hospitalshrugged off the additional delays.

“The payments are significantly delayed right now,” said hospital spokesman Tim Butler. “It’s not going to make much difference from what we’re getting paid right now.”

The state owes St. John’s $35 million in either late Medicaid payments or overdue bills for state employee’s’health care.

“It’s obvious as time goes on, this is an increasing problem and an increased burden on health care when we have a lot of forces on the health care dollar. It’s something we need to get resolved,” Butler said.