As the deadline to pass a budget before another credit downgrade approached, a federal judge ordered the State of Illinois to make more than $500 million each month in Medicaid payments.
U.S. District Judge Joan Lefkow ordered the state to pay $586 million a month for Medicaid vouchers that come in after June 30. On top of that, Lefkow ordered the state to pay another $2 billion toward the more than $3 billion Illinois owes to managed care organizations, which process payments to Medicaid providers, according to court records.
Her order came after a hearings this week in Chicago in the decades-old lawsuit over $2 billion in unpaid Medicaid bills.
At a hearing Wednesday, an attorney for the state said Illinois can’t come close to finding a spare $500 million — it could pay $150 million at best, with half of that coming from the federal government.
Earlier this month, Lefkow ruled that Illinois was not in compliance with court orders to pay health care bills for low-income and other vulnerable groups.
She previously wrote that state officials “have not lived up to their agreements” in the civil case that dates back to the 1990s, when Illinois first entered into a court-enforced consent decree requiring that it keep up Medicaid payments even through the kinds of financial crises the state is currently in.
“The State has failed to fund the State Medicaid programs in a manner sufficient to meet the federal mandates embodied in this court’s consent decree and previous orders,” Lefkow wrote Friday.
Friday evening, the state was approaching its third year without a budget, though lawmakers remained in Springfield for the 10th day of a special session to work toward a resolution.
More than 60 percent of the three million Medicaid recipients in Illinois receive care through a managed care organization, Lefkow wrote.
“The backlog of unpaid claims which the State owes to the MCOs directly … is crippling these providers and thereby dramatically reducing the Medicaid recipients’ access to healthcare,” she added.
A spokeswoman for Gov. Bruce Rauner declined to comment on the ruling.
In an emailed statement, Illinois Comptroller Susana Mendoza said, “Friday’s ruling by the U.S. District Court takes the state’s finances from horrific to catastrophic.”
Mendoza further warned of cuts necessary to make the Medicaid payments.
“Payments to the state’s pension funds; state payroll including legislator pay; General State Aid to schools and payments to local governments – in some combination – will likely have to be cut,” she said.
Payments to the state’s bond-holders, Mendoza added, will continue uninterrupted.
Democratic gubernatorial candidate J.B. Pritzker used Lefkow’s ruling as a chance to assail Rauner’s leadership.
“This is unprecedented, the people Bruce Rauner is supposed to represent are suffering, and the damage this will do to our state will take years to remedy,” Pritzker said.
Lefkow said the state has historically shirked its court-ordered Medicaid obligations.
“Defendants have not submitted a payment proposal that would accomplish what is necessary for substantial compliance with the consent decrees,” she wrote. “Defendants have favored what they have determined to be core priority over their obligations under this court’s orders and decrees.”
Contributing: Associated Press