CHAMPAIGN — Andrew Buffenbarger was expecting a check in the mail from the state of Illinois, but what arrived instead was quite a disappointment.
"Instead of getting a check, we received a letter saying we are not going to get paid for Medicaid services for 120 days," he said.
The administrator of the Champaign County Nursing Home, Buffenbarger said the state owed his facility nearly $3.3 million last month — quite a lot more than the roughly $47,000 showing up in vouchers approved for payment at the state comptroller's office.
But that's typical for nursing homes and medical providers doing business with the state these days.
That's because most Medicaid claims go to the underfunded Illinois Department of Healthcare and Family Services, and that agency is holding back a growing mountain of claims it can't afford to pay, rather than sending them to the comptroller's office, according to the agency's spokesman Mike Claffey. Healthcare and Family Services is underfunded by about $1.7 billion for the current fiscal year and already warned providers to expect lengthening payment delays.
"We have a hole," Claffey said. "We're working with the comptroller to manage the cash flow."
Brad Hahn, spokesman for Illinois Comptroller Judy Baar Topinka, said Medicaid claims approved for payment at the comptroller's office currently total $168.9 million.
Claims being held at Healthcare and Family Services total $1.9 billion more, Claffey said.
Providers are well aware of the gap.
Mokena-based Provena Health says its six Illinois hospitals were owed about $44 million on Sept. 8 — when vouchers approved for payment at the comptroller's office for those hospitals totaled just $7.7 million.
During already tough times, the payment delays pose serious challenges for the hospitals, Provena spokeswoman Michelle Schaper said.
"State Medicaid payments represent a significant portion of our overall cash flow — a full 20 percent in 2010," she said.
Vouchers for Carle Foundation Hospital and hundreds of Carle physicians who also accept Medicaid patients totaled just under $2.8 million at the comptroller's office on Sept. 8. Carle says it was actually owed $11.2 million on that date, and the state's medical-related debts to Carle have grown to $12.5 million in the past month.
That amount pales in comparison to another debt that isn't among the vouchers at the comptroller's office — the more than $200 million in back premium payments the state owes Carle's insurance business, Health Alliance Medical Plans, which covers about 90,000 state employees, their dependents and retirees.
Health Alliance spokeswoman Jane Hayes said the state is running seven months behind on premium payments at $37 million a month, but the company is managing to keep up with payments to providers.
"It might be a little slower than it used to be, but we are managing very well for the nonstate customers," she said. "For our state customers, we are a little more delayed."
Claffey said recently that the state owes a total $1.2 billion to its insurance vendors for premium payments and to the medical providers that care for state employees and retirees enrolled in the state's self-funded group health plans.
Those expenses are also underfunded, so the vouchers are being held at Health Care and Family Services with payments typically running six or seven months behind, he said.
The state's budget woes took a turn for the worse June 30 when an enhanced federal match for Medicaid ended.
The cost of Medicaid, a safety net medical program for the needy, is shared by states and the federal government, and the enhanced federal match — part of the 2009 stimulus bill — had been bringing in an extra $1.5 billion a year for Illinois.
To maximize the higher federal match before it ended, Topinka prioritized Medicaid bills, and the state paid $1.5 billion in those claims in June alone, Hahn said.
Something else that went away with the extra money: To get the enhanced match, states were required to pay nursing homes, hospitals and doctors in 30 days of receiving a claim for Medicaid services. Now those providers are waiting in line with the rest of Illinois' creditors.
Claffey said "expedited" hospitals and nursing homes — those that serve a higher volume of Medicaid patients or that are experiencing a cash flow emergency — are now getting paid first, along with some physicians. But only 32 of the state's 204 hospitals are being paid on an expedited basis.
Others can expect long delays. By the end of the calendar year, nursing homes could be waiting four months to get paid, and hospitals could be waiting more than five months, he said.
The Illinois Hospital Association is pinning its hope on lawmakers returning for the fall veto session and giving hospitals back the $276 million in Medicaid funding they lost in a state budget cut, according to association spokesman Danny Chun.
For now, hospitals with cash reserves are managing well enough, but it's only been a few months since prompt pay ended.
"The challenges will grow as we progress in the fiscal year." Chun said.
(This story appeared in print on Oct. 16, 2011.)