Cook County leaders this week are trying to sort out a big surprise: why the county health system’s Medicaid health insurance plan owes $701 million to doctors, hospitals and other vendors.
County Inspector General Patrick Blanchard made that revelation on June 21 in his latest report on the health system’s finances. Now, he’s raising questions about how health system officials manage money and how transparent they are to county leaders.
The health system makes up nearly half of the county’s roughly $6 billion budget, and the health plan, called CountyCare, is a key money-maker.
Cook County commissioners reacted swiftly to Blanchard’s findings.
“This report is serious,” said veteran Democratic Commissioner John Daley, who leads the finance committee. “There has to be a plan of action to correct this.”
His idea? Auditors should take another look at the health system’s books.
Republican Commissioner Peter Silvestri said he wasn’t surprised CountyCare owes medical providers and other vendors. But he said he was caught off guard by the amount.
Silvestri says he sees a couple possible ways to pay off the debt and they’re both pretty painful.
“There’s only two solutions. You either increase revenue, which in this case means increasing [taxpayer support to the health system], which is not a popular option obviously,” Silvestri said. “Or you cut services to people who need health care, which is not a popular option either. It’s not a really good situation either way.”
Dr. Jay Shannon, who runs the health system, and other leaders there have not commented beyond a statement they issued when Blanchard released his report. They questioned his understanding of Medicaid and defended the integrity of CountyCare.
“In an initial review [of the report], it appears that the [Office of the Independent Inspector General] lacks a basic understanding of how the health system is structured, which makes it difficult to believe the office has a deep understanding of something as complex as Medicaid,” the statement said.
Health system officials are setting up private meetings with commissioners to discuss the report. The findings will likely also come up during public county board meetings on Wednesday and Thursday.
The Cook County health system is the medical safety net for the region, treating largely uninsured and low-income patients. It includes the flagship John H. Stroger Jr. Hospital on the Near West Side, Provident Hospital on the South Side and a network of clinics throughout the suburbs.
The health system launched CountyCare in 2013 after the Affordable Care Act expanded who qualified for Medicaid, the government health insurance program for people who are poor and disabled.
CountyCare created a new way for the health system, and therefore the county, to make money, while also boosting access for previously uninsured patients. CountyCare is one of six health plans that have state Medicaid contracts as part of the so-called managed care program. CountyCare is the largest such plan in Cook County. In 2018, the health plan generated $1.8 billion from the state, according to Blanchard’s report.
But there are signs that CountyCare is struggling. Enrollment is declining. The health plan had about 384,000 people in January 2018. But it has since lost nearly 70,000 people. Membership totaled around 317,000 people as of May, the most recent state records show.
Having enrollees is key to bringing in money to pay bills because the state pays based on membership.
“When they got knocked off of Medicaid they still came to us for health care,” said Democratic Commissioner Larry Suffredin, highlighting another problem. “And now they’re health care patients without any reimbursement or without insurance. So it has had a double whammy in terms of cost effectiveness to our overall health system.”
CountyCare isn’t alone in losing members. This is also happening to the other insurers with Illinois Medicaid contracts as they grapple with the state’s slow enrollment process.
Besides losing CountyCare members, the county health system faces other key challenges.
- It provides more medical care it does not get paid for by far than other hospitals in the county, and that’s expected to continue to climb.
- Only 15% of CountyCare members receive medical care within the county health system, Blanchard’s report found. That means money CountyCare gets from the state goes out the door to other doctors and hospitals.
- The $701 million owed to medical providers and other vendors. In an interview, Blanchard said that tab, which has climbed nearly 15-fold since 2013 as CountyCare got bigger with more enrollees, is alarming.
“The importance of CountyCare is undeniable to the people of Cook County who receive health care, and ensuring that it remains healthy and viable going forward,” Blanchard said.
There’s also a host of questions the report raises. It’s not clear who the vendors are that CountyCare owes, how many of the claims are being appealed or how many might never be paid out. That’s important to understand in order to know how much CountyCare actually owes vendors.
Suffredin said he doesn’t think CountyCare is at risk of collapsing. But he repeated what he said he’s called for for years: He thinks CountyCare should be run by an independent party, not the health system.
“We should not be in a situation where one entity is causing some dramatic effect on the other,” Suffredin said. “Each business should be standing on its own.”
Kristen Schorsch covers Cook County politics for WBEZ. Follow her @kschorsch.