URBANA – It was about four years ago that Urbana-based Carle Clinic started feeling the effects of the Medicaid pinch.

That is, more Medicaid patients and shrinking payments for their care.

Carle Clinic, along with neighboring Christie Clinic, responded by restricting access to new Medicaid patients starting near the end of 2003.

But their problems with Medicaid, the government's health care program for low-income people, are far from over.

As of this month:

– The two clinics together still provide medical care for about 32,000 people on Medicaid, a number that exceeds the total number of Medicaid enrollees (23,293) in Champaign County.

– Carle Clinic says each of its Medicaid patients averages three to four doctor visits a year, adding up to nearly 85,000 total doctor visits last year.

– Illinois is taking at least three months to pay both clinics' Medicaid claims.

– And when the Medicaid payments arrive, they cover less than half the actual cost of providing the care.

Overall, Illinois owes doctors and other medical service providers $1.45 billion in Medicaid payments, and the backlog of unpaid claims will grow to nearly $2 billion by June 30, state Treasurer Judy Baar Topinka's office projects.

Some providers are waiting even longer than three months for their money, Deputy Treasurer Martin Noven said.

"We've got people complaining they're backlogged to October," he said.

The state owes Carle and Christie clinics a combined $3 million in back Medicaid claims – $1.6 million for Carle and $1.4 million for Christie, officials at the clinics say.

Carle Clinic Chief Executive Dr. Bruce Wellman said Illinois covers about 45 cents of every dollar spent on a Medicaid patient's care, leaving providers to absorb the losses.

That's an annual $10 million in Medicaid losses for Carle Clinic, he said – "a heck of a lot."

The political factor

Here's the route Medicaid claims follow: Providers send their claims to the Illinois Department of Healthcare and Family Services, formerly the Department of Public Aid, for review, and that agency forwards the claims to the state comptroller's office for the checks to be issued.

If all were running smoothly, the turnaround would take about six weeks, tops. But Noven said the agency is holding onto the claims much longer than necessary to mask the state's mounting debts.

Of the $1.45 billion Medicaid backlog, $92 million to $93 million of those bills have actually arrived at the comptroller's office for payment, and the rest are still at the agency, he said.

Legislation backed last year by health care providers around the state would have forced the release of Medicaid claims to the comptroller's office in a timely manner, Noven said, but it was vetoed by Gov. Rod Blagojevich.

Kathleen Strand, spokeswoman for the Illinois Department of Healthcare and Family Services, says the state used to average 108 days to turn around Medicaid claims under previous governors.

Illinois is meeting the 75-day average Medicaid payment cycle that was approved by the General Assembly last year – meaning it's an average 75 days between the arrival of the claim and the date the check is on its way to providers, she said. But the more Medicaid patients a provider has, the faster it gets paid.

Some providers with as many as 50 percent or 60 percent of their patients on Medicaid get their checks as quickly as 10 days, Strand said.

In the state's current fiscal year, set to end June 30, Carle Clinic has received $1.87 million in Medicaid payments, including $350,000 in payments made this month, Strand said.

"They are receiving payments regularly," she said. "We are a reliable payer."

Strand said Topinka is playing a role in the payment delay by holding up hundreds of millions of dollars in fund transfers that would shorten the Medicaid payment cycle by 40 days and get more money into the hands of providers.

But that's also subject to debate: Strand said the transfers were approved legally by the General Assembly. Topinka, a Republican who is running for governor, contends that's not the case.

The All Kids impact

Wellman said the financial squeeze on doctors can only worsen with the state's new All Kids insurance program, set to begin July 1.

The program is intended to provide health insurance and medical care for some 250,000 uninsured children in Illinois. And the state plans to reclassify as many of those children as possible under the Medicaid umbrella, to bring in more federal money to help cover the cost.

Both local clinics continue to shy away from the state's invitation to provide doctors for All Kids enrollees in this area. Wellman says there are still too many questions about the program that the state can't answer, leaving too many uncertainties for providers.

And, he adds, "Based on the economics, I don't know how I can grow my Medicaid business."

Doctors will be paid for their care of All Kids enrollees under the state's Medicaid rates, though Illinois is promising to pay All Kids providers on an expedited claim cycle of 30 days.

Doctors statewide are skeptical about how well that will work, according to Dr. Craig Backs, immediate past president of the Illinois State Medical Society.

"We have very significant concerns that the funding will not encourage physicians to participate, that it may actually exacerbate long payment cycles for Medicaid providers," he said.

Backs said the state medical society has proposed reforms in the system, among them improvements in the Medicaid rates that would bring them up to the higher 2006 Medicare fee schedule.

Meanwhile, with considerable work remaining to get the program up and running, Backs doubts the early months of the All Kids rollout will bring meaningful improvement in health care access for children around the state.

"The overall concern is that the government will promise access to health care but expect the providers to deliver on that promise regardless of what level and how quickly they get paid," Backs said. "And physician providers are being squeezed from Medicare and increasingly from private payer sources, and have no place left to shift the cost of providing the cost of care when they're not reimbursed on a timely process."

Christie Clinic Chief Executive Alan Gleghorn says All Kids is a "wonderful idea," but Christie Clinic already has 8,931 Medicaid patients – one-third of them children.

"We're already sharing a large share of the burden," he said.

Under fire

Both clinics were criticized in the local community for their restrictions on Medicaid patients, and Wellman thinks that's unfair.

Carle Clinic serves nearly 22,000 Medicaid patients at facilities in Champaign, McLean and Vermilion counties – with about 14,000 of them seen at its clinics in Champaign County, he said.

Looking at the numbers – about 23,000 Medicaid enrollees in Champaign County and nearly the same number of Medicaid patients being seen at Carle and Christie clinic sites within the county – it would appear there's not much of a gap in care for local Medicaid patients.

But those numbers are a bit deceiving: At least some of those Medicaid patients being seen at the two clinics in Champaign County are coming from outside the county, and at least some of those patients are being double-counted because they see doctors at both clinics.

Frances Nelson Health Center, a small clinic serving mostly Medicaid and uninsured patients in Champaign, sees evidence of a gap in care as it struggles to keep up with all the low-income patients calling for appointments.

"Clearly, if everybody was taken care of, then we wouldn't have people coming to us," said Barbara Dunn, executive director of Frances Nelson's parent organization in Decatur, the Community Health Improvement Center.

Frances Nelson, a federally qualified health center, is on an expedited payment cycle with the state because of its mission to care for the medically-underserved in the community. But it doesn't get paid much faster than Carle and Christie.

Getting a check about 10 weeks after the claim was submitted is "about the best we can hope for," Dunn said.

The wait is longer if there's any problem with a particular claim, she said.

"Make a mistake in a claim, and you get back in line," she said.

Wellman said Carle Clinic began looking at its Medicaid activity back in 2002, when clinic officials saw that for an 18-month period, its percentage of Medicaid patient activity grew from 8 percent to 12 percent.

A decision to keep the current Medicaid patients but cut off access to new ones didn't come easily, Wellman said, and it's still a controversial decision – even within the clinic.

"Subsets of our doctors want us to do more," he said.

Wellman says he thinks part of the criticism in the community comes from people misunderstanding the difference between a for-profit clinic and a not-for-profit hospital.

Carle Clinic is a for-profit entity, and Wellman questions how many other local for-profits can match the clinic's level of assistance to the poor.

"At the end of the day, we have to pay our bills, and at the end of the day we're providing a lot of service below costs," he said.