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State’s bills continue to pile up; health providers may ask state workers to pay more

The stack of bills owed by the state to Springfield hospitals, doctors and dentists for the care of state workers and retirees totals at least $160 million and sets new records with each passing month.

“This is unprecedented, without an end in sight,” said Mark Kuhn, chief administrative officer of Springfield Clinic, which is owed $60 million.

The payment backlogs to health-care providers in Springfield and other parts of the state have grown significantly since the Democratic-controlled legislature and Republican governor failed to agree on a state budget for the fiscal year that ended June 30.

Springfield Clinic officials now are discussing the possibility of taking the unprecedented step of asking patients covered by the State Employees Group Insurance Program to pay more of the cost of their care upfront or bill those patients for costs the state normally would pay, Kuhn said Friday.

There are “no definitive plans” to take such steps, he said, adding that any patients asked to pay more would be reimbursed if and when Springfield Clinic received its own reimbursements from the state.

Asking members of state government’s various health insurance plans to pay more would lead to political pressure that so far hasn’t eased the financial suffering of health-care providers in Springfield and statewide, Kuhn said.

“This is a dormant issue, which is unbelievable,” he said. “At some point, the member is going to be an active part of the solution.”

Longer delays

The stopgap budget approved by the General Assembly and Gov. Bruce Rauner paved the way for the state to start getting caught up on health-care bills after the lack of a fiscal 2016 budget caused those payments to be halted last fall.

But when it comes to the unpaid bills for fiscal 2016 and earlier, as well as health-care costs in the current fiscal year for state workers, retirees and dependents, three-quarters of the combined total will remain unpaid unless there’s legislative action to spend more money.

Because of the Democratic-controlled General Assembly’s “inability to pass structural reforms and a comprehensive, balanced budget,” $3.5 billion in previous and anticipated bills won’t be paid, said Meredith Krantz, spokeswoman for the Illinois Department of Central Management Services.

She didn’t dispute the conclusion of the legislature’s bipartisan Commission on Government Forecasting and Accountability, which reported in July that payment delays to insurance companies and providers for state employee health care now stretch up to 1 1/2 years and will get worse.

The amount owed by the state for that care is growing by about $200 million per month and won’t stop until there’s legislation appropriating general revenue funds to pay the bills, COGFA executive director Dan Long said.

Political observers have said a resolution to the disagreements between Rauner and Democrats won’t come until after the November general election. Rauner has said he is open to an increase in state taxes, but only if parts of his pro-business, anti-union “turnaround agenda” are adopted.

‘Getting nothing’

When the budget impasse began in July 2015, CMS didn’t believe it could release premiums paid by covered members for use in paying bills without an appropriation.

That view changed after the Rauner administration worked with Comptroller Leslie Munger’s office. Administration officials confirmed that the member premiums, which total $436 million per year, legally could be released, Krantz said.

Premium dollars were freed up for payments beginning in March and used to pay some vendors, she said.

The stopgap budget did include $957.8 million in annual contributions from other state and federal funds, as well as member premiums, Krantz said.

The portion of those funds that have accumulated so far will be released to pay health-care vendor claims soon, she said.

Krantz didn’t have a timetable for when more bills might be paid.

Meanwhile, Springfield Clinic has delayed hiring, delayed constructing a physician practice building in Chatham and tapped its reserves to deal with the lack of payment from the state, Kuhn said.

“We are getting nothing — zero,” he said.

Patients whose care is covered by the state, including Medicaid, make up about one-third of the clinic’s business, he said.

Springfield skewed

Because of court orders, Medicaid payments to providers haven’t been delayed significantly to Illinois health-care providers.

But providers in Springfield have been disproportionately affected by the state’s delays in paying bills in the state employee health insurance program because of the concentration of state workers and retirees living in the area.

One out of every four or five residents of Sangamon County — 44,000 of the 198,800 residents — is covered by the state insurance program. That’s the highest concentration in the state.

More than 66,000 people are covered by the program in the multi-county State Journal-Register circulation area.

At SIU HealthCare, the physician group involving faculty members from Southern Illinois University School of Medicine, the average delay in state payments stands at about 300 days, spokeswoman Karen Carlson said.

“This represents a doubling of historic payment delays for these same insurance plans,” she said.

SIU HealthCare has “no current plans to increase upfront payments required from our patients,” she said. “The state’s resolution of these payment delays is of critical importance to SIU and health-care providers across the state.”

Payment delays for the care of patients insured through the state’s self-funded plans are the longest, according to COGFA. Those plans include Cigna, HealthLink and Coventry open-access plans, as well as dental plans.

The insurance plans operated by Health Alliance and Blue Cross and Blue Shield of Illinois — known as “fully insured” plans in which companies are paid a monthly premium to cover costs incurred by members — continue to pay doctors and hospitals within a month or two, Krantz said.

But those companies are among the vendors enduring long delays.

Collection agencies

Urbana-based Health Alliance, part of the Carle health system, is owed about $900 million by the state for premiums up to 20 months’ late, Carle chief financial officer Dennis Hesch said.

Health Alliance is making use of the state’s “vendor support initiative” program — which involves forfeiting the overdue fees it is owed by the state — so Health Alliance can receive money in place of the money it is owed and maintain cash flow, Hesch said.

Health Alliance and Carle Foundation Hospital, which is owed $7.4 million for the care of state workers, hasn’t had to cut staff or delay projects because of the delays, he said.

The state is 525 to 550 days behind in paying Memorial Health System, the not-for-profit group that operates Memorial Medical Center in Springfield, spokesman Michael Leathers said.

Because of the delays, Memorial Medical Center, which is owed at least $60 million, has put off constructing an $80 million medical office building that would be rented to SIU doctors in Springfield.

HSHS St. John’s Hospital is owed at least $40.7 million, spokeswoman Catie Sheehan said without elaborating.

State workers who are members of the American Federation of State, County and Municipal Employees “continue to struggle with the repercussions” of the delays, AFSCME Council 31 spokesman Anders Lindall said.

In some cases, medical bills have been sent to collection agencies, upfront payments have been required for services, and some providers have refused to accept new patients if they are covered by the state, he said.

As an in-network dentist in the state plan, Dr. Joshua Renken is prohibited from asking patients to pay more than their share.

He said he hasn’t been paid by the state since fall for services to the 30 percent to 40 percent of his patients insured by the state.

Renken said he has had to take out a line of credit and closely examine all expenses to make ends meet for himself, the two other dentists and approximately 20 other employees in his Springfield practice.

“Everyone has faith that this will eventually be worked out,” he said. “We weren’t set up to be lending institutions. Our expertise is in caring for people, and that’s what we want to focus on.”

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