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Medicaid deal is regrettable

Program to cut ineligible recipients now in jeopardy

Published: Wednesday, Jan. 8, 2014 1:15 a.m. CST

A sensible plan to hire an outside firm to remove ineligible recipients from Medicaid rolls has been abandoned under union pressure.

Many people who hear that the once-great state of Illinois is in a death spiral may wonder what that means.

In two words: effective bankruptcy. The longer explanation is that without dramatic changes in how it does business, Illinois will no longer have the money to carry out the state’s core functions – such as funding education and law enforcement, and fixing roads and highways.

The fact is that pension and Medicare obligations are eating up state dollars, and Gov. Pat Quinn and legislators have been trying to figure out how to reduce the growing costs of those two programs so that basic state functions can be maintained.

But it’s a hard slog.

Earlier in December, legislators passed and Quinn signed a bill that, if it survives a court challenge, will change the way future pension benefits are calculated. Time will tell whether things work out.

Regarding Medicaid, legislators made changes there, too. But the story of Medicaid in Illinois demonstrates that in this state, it’s too often one step forward and two steps back.

Consider one of the key reforms that legislators implemented. They decided to ensure that people who do not qualify for Medicaid under the state’s rules would be removed from the Medicaid rolls.

Those who were targeted for removal include residents of other states who are receiving Medicaid benefits from Illinois.

That’s all you need to know to understand the depths of this problem. Since when is it reform to deny residents of other states benefits from Illinois programs?

State officials hired a private company, Maximus, to conduct a review of the Medicaid rolls, and their initial efforts identified 127,000 cases of 316,000 cases that were reviewed where ineligible recipients were collecting costly state benefits.

Obviously, Maximus is operating in a target-rich environment. Based on those findings, costly fraud apparently is rampant in Medicaid.

Not everyone, however, was pleased by the Maximus results, specifically the union employees who work in the Department of Healthcare and Family Services.

They filed a complaint alleging that the state improperly hired an outside contractor when it should have relied on state employees to conduct the review of the Medicaid rolls. An arbitrator ruled in favor of the union, setting the stage for the dismissal of Maximus.

Quinn could have appealed the decision, and, in our view, should have appealed it. Instead, he negotiated a settlement with the union whereby the Maximus contract will be terminated on April 30.

From a taxpayer standpoint, this is a most disturbing result.

For starters, the same department overseers who were so incompetent or indifferent that they allowed many thousands of ineligible people to receive Medicaid benefits now will be assigned to lead a cleanup of the rolls.

Then, assuming the arbitrator’s ruling had merit, there is the matter of state officials bargaining away their management authority in a way that makes it difficult to bring in an outside group to identify and solve a major problem created by the existing state bureaucracy. Those who suspect public employee unions have too much power and use that power to act in their own self-interest, rather than the public interest, have evidence for that proposition in this case.

Since this is Illinois, politics also is in play. Quinn’s pension legislation enraged union members in the face of an upcoming election year. So it would be no great surprise if he sought to smooth their ruffled feathers by pulling the plug on Maximus.

Quinn denied any political motive, saying he settled because he didn’t “want to spend the rest of my life in court.”

The fact, however, is that appealing the arbitrator’s ruling wouldn’t have required him to spend the rest of his life in court or anything approximating that. Indeed, Quinn’s statement is just hyperbole that evades the issue.

Nonetheless, the matter is settled. A program that was working in the public’s interest has been set aside for reasons that make no sense.

Remember the Medicaid fiasco the next time you hear someone say the state is in a death spiral. It’s Exhibit A for what ails the Land of Lincoln.

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