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Union grievance has put Medicaid reform in jeopardy

Dumping private contract would be huge mistake

Published: Saturday, June 29, 2013 1:15 a.m. CDT

Illinois has removed from its Medicaid rolls this year more than 60,000 people who didn’t qualify for the government benefit. That’s an astonishing number, and it appears there are still many people getting benefits who don’t qualify.

A contractor hired by the state is churning through hundreds of thousands of questionable Medicaid accounts, part of a state effort to save the enormously expensive health care program for low-income people.

We’ve strongly backed this effort, which had bipartisan support in the Illinois Legislature. Every dollar spent on people who are ineligible for benefits – some of them don’t even live in Illinois – is a dollar not available for essential state services.

Now this vital scrub of Medicaid is in jeopardy, thanks to a grievance filed by AFSCME, the state employees union. An arbitrator recently ruled that the state couldn’t hire the contractor, Virginia-based Maximus Health Services Inc., to do the job.

The work should be done by the state’s union workforce, ruled the arbitrator, Edwin Benn.

Benn says the state has to fire Maximus by Dec. 31 and use state workers. He argues that the state Legislature allowed, but did not require, state officials to hire an outside contractor to do the work, and that the deal violates AFSCME’s contract with the state.

State officials argue that the fastest and most effective way to do this work is through Maximus, which has a 2-year contract worth an estimated $76.8 million. The state doesn’t have the technology or the workforce to do the job.

Maximus uses computers to verify that Medicaid recipients still live in the state and that they don’t have unreported sources of income that exceed the eligibility rules.

In his opinion, Benn recognized “the importance of the redetermination work that has to be done.”

He got that right.

So far, 13 percent of the illegal recipients were knocked off of Medicaid because they couldn’t be found in Illinois. Five percent said they no longer needed or wanted Medicaid. A tiny number, less than 1 percent, admitted that their income exceeded the thresholds to be eligible.

In 75 percent of the cases, the recipients just did not respond. Phone calls. Letters. Notices from the state warning that Medicaid benefits are about to be cut off. No response.

This screening experience should remind lawmakers of how much waste is baked into the Medicaid program. State officials knew that – they anticipated saving $350 million in the first year.

That savings will come up short this year because the state was slow to get the program running. But the early results – 60,000 people who didn’t belong on the rolls – shows the great potential for savings.

Gov. Pat Quinn can appeal the arbitrator’s ruling. The Legislature can fix this by a change in law. Either way, this effort has to keep moving. Illinois doesn’t have money to waste.

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