Illinois has been a bit of a deadbeat. The state has piles of unpaid bills—including $2 billion just for Medicaid reimbursements. Now this massive backlog, which has dogged the state for years, could be virtually zeroed out by summer. That’s thanks to the federal stimulus package. But a little-noticed technicality could mean that some people who provide healthcare might not get the benefits.

The thing that might rescue health care in Illinois isn’t the money in the stimulus package. It’s the strings attached to the money.

First, a quick primer: the way Medicaid works is that a doctor or hospital or whoever does the work. The state pays them, and the federal government pays the state half of every dollar. The economic stimulus package ups that federal match for a few years – from 50 cents on the dollar to 60, with one big catch.

HYNES: They’re offering us billions of dollars in additional federal Medicaid monies, but only if we pay our providers in a 30-day timeframe.

That’s Comptroller Dan Hynes, who writes the state’s checks. Right now Illinois is nowhere near meeting that mark. But Hynes the state may be on the verge of getting its act together.

HYNES: I have been for 10 years trying to get the state to stop this game and this gimmick of making our providers wait. And ironically, the federal stimulus package may be, instead of the stick that I’ve been using, may be the carrot we need to try to actually get us to start paying our bills on time.

To grab that carrot, state legislators are moving toward borrowing a billion-and-a-half dollars. That would get them caught up on their bills, and bring in the new money. There’s bipartisan support, though the governor hasn’t weighed in yet. The state would still have to pay that money back, but it would be bondholders, instead of health care providers, waiting to get paid. So cash-strapped hospitals could start expecting regular checks.

ER RADIO: Holy Cross, Chicago number 1, 2 …

The emergency department at Holy Cross has been over capacity pretty much since it was built, says patient services head Sheila Mischke. It’s the only hospital for a big swath of the southwest side so they get a lot of traffic.

MISCHKE: We do get the most ambulance runs in the city. As you can see, there’s four of them here now.

About half the hospital’s patients are on Medicaid, and like everybody else, Holy Cross is way backed up in getting reimbursed. That’s meant putting off things like fixing the roof or replacing an old cat scan machine.

MISCHKE: It has significant implications. We have to order our supplies, we have to pay our staff without the guarantee of income. Its kind of like, you know it’s out there and you know it’s hopefully coming eventually, but you don’t ever know when it’s gonna actually get here.
SPITZER: Let’s say by June, that the state was 30 days turning around your Medicaid bills. What difference would that make?
MISCHKE: Oh, it would be huge! Not worrying about making your payroll, not worrying about paying your vendors on time. Everybody needs to get paid for what they do, in a timely fashion. And currently, we don’t.

It’s just possible that that could change. The stimulus law requires states to get current on their payouts to hospitals, nursing homes and practitioners. But there’s the rub.

ALTMAN: It’s still unclear what the exact definitions of practitioner are.

That’s Stephanie Altman of Chicago-based Health and Disability Advocates. This is the technicality that could shut a lot of providers out of the stimulus bonanza. The term practitioner certainly applies to doctors. But there are plenty of other outfits that bill Medicaid – from home nurses to day centers for Alzheimer’s patients. It’s not clear if “practitioner” applies to all of them. So if the state has to pay off certain providers first, Stephanie Altman says the others could get shoved to the back of a very long line.

ALTMAN: It’s always a food chain, and you don’t want to be at the bottom of that food chain.

Take neighborhood clinics. Are they practitioners? The group that represents those clinics says, probably not. Philippe Largent of the Illinois Primary Healthcare Association says clinics are running on fumes, even longer waits to get paid could devastate them. But Largent says the clinics have a good relationship with the state, so…

LARGENT: It is cause for concern, but we’re not ready to push the panic button yet.

The Illinois Department of Healthcare and Family Services isn’t giving out a lot of specifics yet. Their director declined multiple requests for an interview, and they say they’re still waiting for instructions from the feds. In any case, Illinois’s health care providers are starting to see some light at the end of a dark tunnel, it’s just not clear if all of them will make it out.