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Judge Delays Decision On How Quickly State Should Pay Medicaid

William Johnson
Creative Commons


A federal judge appeared conflicted over whether the Illinois state government should prioritize Medicaid payments — possibly at the expense of schools, pensions and payroll payments — during the ongoing budget impasse.

Two years ago, Judge Joan Lefkow ordered the state must pay Medicaid providers even though it is operating without a budget. The state is now virtually out of money — its backlog of bills has grown beyond $14.2 billion — and Medicaid service providers said the state isn’t paying them fast enough. 


During a Wednesday court hearing, Lefkow suggested that Medicaid payments be paid faster — but she stopped short of issuing a ruling. “I don’t know what I’m going to do here,” said Lefkow, who called for another court hearing next week, where she is expected to make a decision.

“It doesn’t seem right that Medicaid payments are being de-prioritized, shall we say,” Lefkow said. “Ultimately this comes down to a political issue.”

In court documents filed last month, Medicaid providers said the state is out of compliance with Lefkow’s ruling because of the late payments. A group of Managed Care Organizations (MCOs), which reimburse doctors for Medicaid payments, said in a sworn statement earlier this month that the state owes them hundreds of millions of dollars. Aetna said the state owes it $582 million. Meridian said it’s owed $501 million. 

The MCOs said the state is months late in paying them due to the increasing backlog of bills, and if that continues the state’s Medicaid system would crumble as doctors start to refuse to see low-income patients because doctors are not getting paid.

At stake is the state’s payments to schools, state employees’ paychecks, pensions and paying down the state’s debt, attorneys for the state argued. They argued that if Medicaid moves up in priority, because of its substantial cost, one or more of those other core government services will be forced to wait longer for payment. 

Assistant Attorney General Brent Stratton argued that Medicaid payments, which are currently in the hundreds of millions of dollars, are so large that the comptroller would not be able to pay for one of those other critical state services.

“So Medicaid loses and it has lost,” said attorney Tom Yates, who represents the MCOs and doctors who serve Medicaid patients.

Earlier this year, a Cook County judge ordered that state lawmakers’ paychecks should also be prioritized, as opposed to being paid months late, though that cost pales in comparison to other services mentioned in court.

As the hearing concluded, Lefkow addressed the attorneys who have been representing the state government during the budget impasse. 

“I don’t envy you,” Lefkow said.