Updated at 4:30 p.m.
A federal judge in Chicago is ordering the Illinois state government to reimburse Cook County Medicaid providers, even though Gov. Bruce Rauner and lawmakers remain far apart on agreeing to a spending plan.
Medicaid payments are one of the state’s largest expenses in any given year. With no agreement in sight on how much money the state should spend - or what rates to tax residents - the Sargent Shriver National Center on Poverty Law sued the Illinois’ Dept. of Healthcare and Family Services to reimburse Cook County Medicaid providers. The Shriver Center used a decade-old court order as the grounds on which to order the state to find the money necessary to refund hospitals.
“The money is there. The money is available,” Judge Joan Lefkow said from the bench, in giving her order.
Democratic Senate President John Cullerton recently estimated the Illinois’ Medicaid system will cost the state almost $8 billion for the next 11 months. Lawyers for the attorney general’s office, who represent the Dept. of Healthcare and Family Services, argued in court that there’s been no evidence of any patients being denied access to medical care since the state government lost its authority to spend money on July 1, when lawmakers and the governor didn’t agree on a spending plan. But Lefko said, regardless of Cook County hospitals’ financial issues, they’d be further exasperated by a lack of state money.
Thursday’s court order from Judge Joan Lefkow chalks another not-so-small government service that’s been deemed essential for state government to fund. Several existing court orders or federal laws have mandated the state continue to fund services like foster care operations and issue payroll checks to government employees. Rauner also approved a spending plan to keep Illinois’ K-12 schools open once classes start.
Judge Lefkow’s decision also guarantees a flow of money will continue for hospitals that rely heavily on Medicaid reimbursements. Timothy Egan, CEO of the New Roseland Community Hospital on Chicago’s South Side, said it would have to begin diverting ambulances from its Emergency Department and stop admitting new inpatients and outpatients, starting Monday, without court action. By the end of next week, Egan said, all inpatients would be transferred out of the hospital and he would begin laying off employees. Egan added that 71 percent of Roseland Community Hospital’s revenue comes from the state government’s Medicaid program.
“You have to keep the whole system going as if there’s no budget impasse in order to ensure the children have access to care,” said John Bouman, an attorney with the Sargent Shriver National Center on Poverty Law, who brought the lawsuit against the state. Bouman said the judge’s decision applies only to Medicaid providers in Cook County, but Gov. Rauner could decide to expand the decision to suburban and downstate providers.
A.J. Wilhelmi, the Chief Government Relations Officer for the Illinois Hospital Association, encouraged Rauner to expand the decision statewide—if, however, Rauner does not, Wihelmi believes there may be other courses for legal action, including returning to court and seeking action under another consent decree that could apply statewide.
John Hoffman, a spokesman for the Department of Healthcare and Family Services said the agency is reviewing the court order, but would not say if it has plans to expand the judge’s decision to all other Medicaid providers outside of Cook County.
Democrats, meantime, are using the latest court order to attack Rauner’s veto of the unbalanced budget approved earlier this year. At the time, Rauner said he would not support an unbalanced budget, and lawmakers need to approve changes to workers compensation and freeze property taxes before passing a spending plan.
“We know that some of this stalling around the non-budget issues is leading to budget and spending decisions out of his control,” said Steve Brown, a spokesman for Democratic House Speaker Michael Madigan.
Senate President John Cullerton said earlier this week that if court mandates keep piling up and no spending plan is approved, Illinois state government faces a $4 billion deficit. The governor’s office did not dispute that figure.
Tony Arnold is WBEZ’s state politics reporter. Follow him @tonyjarnold.
Shannon Heffernan is a WBEZ reporter. Follow her @shannon_h.