Chicago's county Medicaid managed care plan has about $350 million in unpaid medical claims, according to the health system board.
As one of six private health insurers administering Medicaid benefits to beneficiaries in Illinois, CountyCare is required by the state to pay claims within 30 days, health plan CEO James Kiamos told board members. But as of Feb. 9, he said the health plan was more than 90 days behind schedule for claims that have been received but not paid.
The culprit: Late payments from the state and the county.
"This is a byproduct of funding. It's not a byproduct of plan operations," Kiamos said, noting that CountyCare is profitable.
Under Illinois' Medicaid managed care program, the state pays insurers like CountyCare a set amount per patient rather than paying for each medical service provided. The goal is to improve people's health and control costs by ensuring all care is appropriate and high-quality. But providers—especially safety-net hospitals that treat large numbers of low-income patients—say claim denials and late payments from insurers threaten their operations.
Between August and January, CountyCare received more than 30 complaints from hospitals and other healthcare providers alleging the Medicaid managed care plan owes them money, according to data obtained through a Freedom of Information Act request. Several complaints said doctors hadn't been reimbursed for medical services in more than 90 days; others referenced hundreds of thousands of dollars in unpaid claims.
The Illinois Department of Healthcare & Family Services did not immediately reply to a request for comment.
"We have to improve our cash flow. That's the long and short of it," health board Chair Hill Hammock told board members in response to Kiamos' presentation.
Complicating matters is the fact that everything gets paid through county government, including hospital bills, said Bob Reiter, the board's finance chair.
Hospital operations, including providing free care to poor people, impact county government's cash flow, board members said. The system expects to spend roughly $590 million in fiscal 2020 on charity care and bad debt, or unpaid bills.
Here's how CountyCare claims get paid: The state pays Cook County, which puts the funds into a bank account from which it pays all its bills. CountyCare sends its bills to the county, which then go to Evolent, a third-party administrator that ultimately pays the claims, Cook County spokesman Ted Nelson said in an email.
Late payments from the state create a "complicated domino effect for cash flow management," since the county still needs to cover incurred costs and daily operational expenses like payroll, Nelson said. Even after the money is received, "the health system has to prioritize all its bills—including payroll—before paying out any CountyCare claims," which can cause additional cash flow constraints.
With about 318,471 members in Cook County, CountyCare has 15 % of the state's Medicaid managed care market, according to data from Healthcare & Family Services. Kiamos said the number of enrollees will increase, thanks to a partnership with Chicago Public Schools and a boost from the state.
Starting April 1, HFS will automatically send 50 %—up from 35 %—of Medicaid enrollees in Cook County to CountyCare. Medicaid beneficiaries have 30 days to choose a plan. Those who don't—historically, about half—are automatically assigned to an insurer by the state.
Kiamos said the boost is due to the plan's innovation and quality, noting that it's one of the top-rated Medicaid managed care plans in the state, according to the National Committee for Quality Assurance, a nonprofit organization that rates health plans based on consumer satisfaction and clinical quality.
With a $2.8 billion budget, Cook County Health is one of the largest public health systems in the nation. Leaders say CountyCare has contributed more than $1 billion to the health system over the past five years.
In a report released this week, the healthcare Council of Chicago, which seeks to address health-related issues and support growth around the city, said it expects that "CountyCare will seek some key strategic partnership or may end up transferring or selling its assets to another party as a means of securing needed financial resources that could be applied to the broader stability of the (health) system."
This story first appeared in our sister publication, Crain's Chicago Business.