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Judge: Illinois Must Pay At Least $586 Million Per Month Toward Medicaid

In a ruling that could have big implications for the state’s budget impasse, a federal judge late Friday ordered the state of Illinois to begin paying hundreds of millions of dollars a month toward Medicaid, even as the state braces to enter its third year with no budget.

The ruling from U.S. District Court Judge Joan Lefkow calls for Illinois to to pay $586 million a month toward Medicaid for vouchers submitted starting in July. Additionally, Lefkow is forcing the state to pay down a $2 billion backlog of unpaid Medicaid bills over the next year, though she did not prescribe how much it would have to pay each month.

The order came down just hours after the state House of Representatives adjourned for the day without approving a spending plan ahead of Friday’s midnight deadline.

Court orders and mandates have kept the vast majority of Illinois government funded, despite the ongoing budget impasse. But Friday’s ruling could mean more residents will begin noticing the day-to-day effects of the two-year political war between legislative Democrats and Republican Gov. Bruce Rauner.

Up until now, Illinois has been paying just $160 million a month toward Medicaid because of the budget impasse. The state comptroller’s office has said forcing higher Medicaid payments will mean less money for things like schools, state worker paychecks, pension payments and local government funding.

“As if the Governor and legislators needed any more reason to compromise and settle on a comprehensive budget plan immediately, Friday’s ruling by the U.S. District Court takes the state’s finances from horrific to catastrophic,” Illinois Comptroller Susana Mendoza said in an emailed statement.

Mendoza’s office reiterated, however, that it would not default on debt payments, lest the state’s bond ratings fall even further than they already have during the impasse. As it is, Illinois risks becoming the first state to have its bond rating fall to junk status.

Attorneys for low-income Medicaid patients praised the ruling late Friday, saying the higher monthly payments mean the more poor Illinoisans will continuing getting health care, with or without a state budget.

“It’s a lot more than we had at the start of the day, so I think that’s a good thing,” said Tom Yates, an attorney for the Medicaid patients.

As first reported by WBEZ in May, more than two dozen doctors, health care providers and insurance companies warned Lefkow that they may stop serving hundreds of thousands of poor patients if the state didn’t find a way to speed up Medicaid reimbursements to doctors and hospitals. 

Lefkow had earlier ordered the state to negotiate with the patient's attorneys to find a way to speed up Medicaid payments, but the sides couldn’t reach a deal.

This story has been updated to included a quote attributed to Illinois Comptroller Susana Mendoza.

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