Medicaid reform skips the norm for awarding contracts

By ANDREW THOMASON/Illinois Statehouse News

SPRINGFIELD — A $120 million cost-cutting measure in the recently passed Medicaid savings package skirts the normal state bidding process, which was meant to find the best deal for taxpayers.

Gov. Pat Quinn on Thursday signed a $1.6 billion Medicaid savings plan that would, among other things, kick ineligible Medicaid recipients out of the health-care program by ensuring everyone in the system meets eligibility, residency and other requirements.

But to do so, the legislation allows the state to hire an outside vendor for the eligibility checks, and to expedite that hiring by avoiding timelines and procedures outlined in Illinois purchasing laws.

The legislation, SB2840, is at

Bypassing the standard procedure for accepting bids allows the state to award a contract without considering costs.

Normally, sealed bids on contracts are submitted to the state and the contract is awarded to the lowest bidder that meets all requirements of the contract, a process that can take more than a year.

State Rep. Sara Feigenholtz, D-Chicago, helped negotiate the legislation. She said it came down to money, which taxpayers are losing every month the state goes without hiring a company to check eligibility.

Government moves slowly, Feigenholtz said.

The final say on who gets the contract is up to the state's Chief Procurement Officer and the Illinois Department of Healthcare and Family Services, which have 90 days from Wednesday to find a suitable contractor.

Mike Claffey, a spokesman for the Department of Healthcare and Family Services, said the savings from the accelerated timeframe for taxpayers will be significant, but the department didn't yet have a number.

"It's very labor-intensive (purging the Medicaid rolls), and we think bringing the contractor on board would be cost-effective, and going through the normal procurement process would be very time-consuming," Claffey said.

"There's no such thing as a perfect Medicaid reform bill. ... There's a lot of moving parts," Feigenholtz said.

Normal prohibitions on who can bid — businesses or people who owe money to the state, and people who have conflicts of interest are barred from winning a contract, for example — still apply, according to the Medicaid reform legislation.

Feigenholtz said she would like to see some savings from the Medicaid purging as soon as this fall.

The impetus for the legislation was the ballooning cost of the state-federal health insurance program, which serves about 2.7 million people.

If no action was taken this year, Quinn said, Medicaid was in jeopardy of collapsing. The savings package is in conjunction with a cigarette tax increase of a $1 a pack, raising the tax on a pack from $.98 to $1.98. Without those measures, the state was facing $21 billion in unpaid Medicaid bills by 2017.

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Sid Saltfork wrote on June 16, 2012 at 9:06 am

Another "special vendor"?  Pardon me for being sceptical; but with Illinois' history of special deals, it causes speculation.

sameeker wrote on June 16, 2012 at 11:06 am

"State Rep. Sara Feigenholtz, D-Chicago, helped negotiate the legislation". That is all I need to know. They already know who the contract is going to. Why don't they use the employees that the state already has to do the work?

Sid Saltfork wrote on June 16, 2012 at 2:06 pm

The employees are required to take, and pass an annual Ethics Test.  The legislators do not. Some lower level employee might be a "whistle blower"; so it is left up to an administrator to handle it.  Your right about Feigenholtz.  Ryan, and Blago were not able to pull off their schemes without the help of some of the legislators.  Corruption runs deep in Illinois.

thelowedown wrote on June 16, 2012 at 4:06 pm

"The final say on who gets the contract is up to the state's Chief Procurement Officer and the Illinois Department of Healthcare and Family Services"

If you actually read the story you might look...intelligent.

Sid Saltfork wrote on June 16, 2012 at 7:06 pm

You should read more on the Dept. of Healthcare and Family Services.  Look at the conflict of interest leveled at one of it's procurement officers regarding the health insurance bids last year.  You should look at the state's procurement officers past actions.  You need to do your homework; or continue to blindly believe the state's honesty.