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Unanswered Questions Remain After Scathing Report On Cook County Health

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County health officials faced backlash this week following a scathing inspector general report that raised questions about CountyCare, the health system’s insurance plan.

Bill Healy

The head of Cook County’s health system on Friday once again defended the government-run Medicaid insurance plan he oversees, following a scathing report into its finances.

“The reputation of this plan is critical to the success of the health system,” Dr. Jay Shannon said at a meeting of Cook County Health’s independent board.

No one challenged his remarks.

But that wasn’t the case earlier this week, when Shannon and other health officials faced a political backlash following the county inspector general’s report that raised serious questions about the health system’s insurance plan known as CountyCare.

Inspector General Patrick Blanchard set off a political frenzy between health leaders and the County Board that oversees them after he raised significant questions about CountyCare’s finances and transparency in a June 21 report.

Among Blanchard’s most significant findings: CountyCare finished the 2018 budget year owing hospitals and other vendors nearly $701 million. The backlog was so bad that some vendors cut off supplies, resulting in a shortage of pacemakers and anesthesia for surgeries, Blanchard alleges.

The investigation also raised concerns about whether the county health system is shuffling money around in order to make its finances appear rosier than they really are.

On Wednesday, Cook County commissioners grilled health system leaders about the report. They questioned whether the health system should even run an insurance plan, and just how much CountyCare owes vendors. They plan to audit the health system’s books again, even though one audit just wrapped up.

Adding to the confusion was that health system CFO Ekerete Akpan told commissioners the bill backlog totaled only around $500 million — not $701 million as Blanchard found. Akpan also said the health system had $372 million in cash to pay down bills. But commissioners were frustrated and wondered aloud how the rest of the bills would be paid.

Then, on Thursday, Shannon added to the confusion when he told reporters the watchdog’s report was just wrong.

“The health system is not sitting on $700 million in unpaid bills from FY 2018,” he said.

Health system officials suggested Blanchard’s report is misleading. They have paid all the bills they received, Shannon said.

And more continue to come in. That’s because doctors, for example, have six months to file an initial claim, so that big IOU included bills CountyCare hadn’t yet received. So it’s unclear exactly how much CountyCare still owes providers.

There are lots of other unanswered questions.

Shannon will not yet comment on many other allegations in Blanchard’s report. Those include the findings about the health system’s accounting practices and how the bill backlog has impacted medical care.

But Shannon has defended the health system’s transparency.

In an interview with WBEZ, the inspector general said he stands by his findings.

Blanchard used the health system’s financial statements to find the $701 million backlog of bills owed to vendors. The $500 million backlog Akpan referenced did not include about $200 million owed to John H. Stroger Jr. Hospital, one of two hospitals within the county health system, Blanchard said. The medical network includes clinics throughout the suburbs.

Blanchard also interviewed three external auditors and several leaders who work at either the health system or Cook County government.

Blanchard said he’s most concerned about the trend that CountyCare’s unpaid bill backlog is growing.

The tab has swelled nearly 15-fold since the health system launched CountyCare in 2013. His report underscored the threat to CountyCare, and it said the climbing debt could become too big to pay “without an extraordinary contribution from another funding source in the future.”

Blanchard’s report has caused lots of tension because it not only attacks the credibility of health system leaders. It also underscores how critical CountyCare is to the finances of the health system — and therefore the county — and for the roughly 317,000 people it insures.

The revenue CountyCare brings in for the health system — $1.8 billion last year — has helped reduce the amount of extra money the health system needs from taxpayers. The subsidy is about $102 million compared to more than $480 million in 2009, Shannon said.

He emphasized CountyCare’s importance at the health system board meeting on Friday.

“If we intend to stay true to the mission of Cook County Health, then we need the health plan,” he said.

The health system provides roughly half of all the free care in the county to people who are uninsured or can’t afford to pay their medical bills. No other hospital comes close.

“Without the revenue from the health plan there is no way that we could cover those expenses unless there was a significant influx of revenue from local taxpayers,” Shannon said.

He plans to provide a more thorough explanation about the inspector general’s report at a special county board meeting in July.

Kristen Schorsch covers Cook County politics for WBEZ. Follow her @kschorsch.

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