Illinois Medicaid reimbursements delayed despite prompt claims processing

Illinois audit reveals delay in CMS reimbursements. Source: Natural News

An audit of the Illinois Medicaid program, which revealed a $1.5 billion financial shortfall, has led to delayed physician, hospital and nursing home reimbursements in recent years. Despite this, physicians report that the state is processing claims more quickly, and hospitals soon may see more timely payments, according to American Medical News.

Illinois Auditor General William G. Holland released the audit, which covered fiscal years 1999 to 2007, May 13, which uncovered evidence that despite fast processing, the state was slow to send them to the Illinois State Comptroller for payment. In fiscal 2006, for example, the state took an average of six days to process claims but 57 days to submit them to the comptroller.

The state potentially owes $81 million in interest payments to doctors, hospitals and others caring for Medicaid enrollees, due to state law which requires interest to be paid when Medicaid claims take longer than 60 days to process. Of that total, so far the state has paid $21.8 million in interest for claims submitted between 1999 and 2007, according to the audit.

But despite the ongoing program deficit, the state is paying physicians' Medicaid claims for ambulatory care within 30 days for child patients and within 60 days for adult patients, said Barry Maram, director of the Illinois Department of Healthcare and Family Services (DHFS). Doctors who treat a significant number of Medicaid patients are paid more quickly, he said.

The audit documents the program's previous problems, but the "reimbursement lag time has improved for many physicians in the current fiscal year," stated Shastri Swaminathan, MD, president of the Illinois State Medical Society.

While speeding payment, the state also saved $34 million as of late April by better managing care for public health program enrollees. By November 2007, the state had implemented both Illinois Health Connect, its Medicaid primary care case management program, and a companion disease management program called Your Healthcare Plus, according to Illinois Gov. Rod Blagojevich, reported AM News.

About 1.7 million people in state healthcare programs—including Medicaid—have signed up for a medical home as part of Illinois Health Connect, according to the DHFS. The program pays physicians care management fees of $2 to $4 per enrollee per month. Also, 220,000 of those are enrolled in Your Healthcare Plus, which provides more intensive care coordination for frequent emergency department users, patients with asthma and disabled adult Medicaid enrollees.

On May 31, state lawmakers approved a fiscal 2009 budget that would reduce hospitals' average Medicaid payment cycle from 98 days to about 90 days by boosting Medicaid funding by $483 million. However, on June 2 Blagojevich said the overall budget was $2.1 billion out of balance and called on legislative leaders to produce a compromise version, according to AM News.

Lawmakers in late May also unanimously approved a bill reauthorizing a hospital tax. The state will use the resulting money to generate $640 million a year in federal Medicaid matching funds for five years. This amount would be enough to reimburse hospitals for more than 90 percent of their Medicaid costs, compared with 64 percent before the tax, which initially took effect in 2004, said Danny Chun, spokesman for the Illinois Hospital Association.

AM News reported that Blagojevich is expected to sign the measure, which also needs approval from the Centers for Medicare & Medicaid Services.