Quinn strikes deal to transfer Medicaid verification from outside contractor to public employees

By Jamey Dunn

Under a deal struck between Gov. Pat Quinn’s administration and union officials today, public employees will begin taking over the work of an independent contractor that has been weeding out ineligible applicants for Medicaid benefits.

As part of sweeping Medicaid changes passed last year, the state hired Virginia-based Maximus Health Services to evaluate the eligibility of Medicaid patients. The company checked to see if Medicaid recipients met the income threshold and lived in the state. Maximus then passed on the results of its inquiries to the Illinois Department of Human Services, and the agency reviewed the information before terminating benefits. So far, an estimated 216,000 people have been removed from the program as a result of Maximus’ verification work.

Earlier this year, the American Federation of State, County and Municipal Employees Council 31 filed a grievance over the state’s contract with Maximus, claiming that it violated its own contract with the state. An arbitrator ruled in favor of AFSCME and ordered Illinois to end its deal with Maximus by December 31. Quinn’s administration appealed the ruling but also entered into negotiations with the AFSCME.

Today they reached a deal that calls for transitioning the work to state employees over the next several months. The plan calls for many of the services currently provided to by Maximus to be transferred to state employees by April 30. It calls for the hiring of 520 DHS employees and an unnamed number of employees at the Department of Health and Family Services. It allows the state to continue to use some Maximus services, such as its data-matching software, call center and mailroom, until 2015. “We want to really focus on making sure that those who are eligible for Medicaid get what they are entitled to by law, [and] those who are not eligible don’t receive what they’re not entitled to. That process will continue aggressively, but we’re going to do it in a way that complies with the arbitrator’s ruling,” Quinn told reporters in Chicago today. Quinn said he moved ahead with a deal instead of continuing to pursue the appeal because he wanted to “move forward as quickly as possible. We don’t want to be in court all next year.”

Republican lawmakers were critical of Quinn’s deal with AFSCME, saying that the governor is failing to defend the very reforms that he touted just a year a ago. “This isn’t a walk back; this is a turn around and sprinting away from the cornerstone of the reforms that were in the [law],” said Mattoon Sen. Dale Righter, who is a key Republican negotiator on Medicaid issues. Righter called Maximus’ work so far “a stunning success for the taxpayers.”

But members of Quinn’s administration said the same kind of work will continue. “This ruling provides the best and most efficient way forward for taxpayers at this time and continues our momentum in rooting out waste, fraud and abuse,” Julie Hamos, director of the Department of Healthcare and Family Services, said in a written statement. “It’s important to ensure full compliance with the [law], which this ruling does. We are committed to preserving the Illinois Medicaid program at a lower cost to the state while providing health care for our neediest low-income children and families.” A news release from the department said the number of ineligible enrollees will likely decrease in the future. “The cancellation rate is expected to come down because the reviews started with cases that had been flagged for having a discrepancy. The vast majority were canceled because the client did not respond to a request for verifying information about their income or residency.”

Hinsdale Republican Rep. Patti Bellock, who also worked on Medicaid legislation, said that if Quinn wants to tweak the law, he should have to get approval from lawmakers. “If it needs to be changed, then it should be brought back before the General Assembly.” Republicans are accusing Quinn of making a “backroom deal” with AFSCME that could reduce the overall savings that were projected when the law was passed. But AFSCME argued in its case to the arbitrator that the state could actually save money by using public employees for the work. “The state can save $18 million a year by ending this inefficient private contract and hiring adequate staff to ensure families who need health care through Medicaid receive it and those who don’t qualify do not,” AFSCME Executive Director Henry Bayer said in a prepared statement.

Quinn said today in response to his Republican detractors, “I respect everyone, but I don’t want to spend the rest of my life in court.”