After ‘backroom deal,’ Illinois to hire 500 new government workers to replace private Medicaid scrub contractor

Republican state Sens. Dale Righter and Patti Bellock accused the Quinn administration of cutting a “backroom deal” with the largest state employee union that will dismantle efforts to crack down on Medicaid fraud, according to the State Journal-Register. In 2012, the state hired a private vendor to help rein in out-of-control costs associated with Illinois’...

Republican state Sens. Dale Righter and Patti Bellock accused the Quinn administration of cutting a “backroom deal” with the largest state employee union that will dismantle efforts to crack down on Medicaid fraud, according to the State Journal-Register.

In 2012, the state hired a private vendor to help rein in out-of-control costs associated with Illinois’ nearly $20 billion Medicaid program.

Maximus, the private contractor hired to scrub Illinois’ Medicaid rolls of ineligible and incorrectly enrolled individuals, had its contract canceled after an uproar from the American Federation of State, Municipal and County Employees.

The reason? AFSCME said state workers should have been the ones conducting the audit – even though the state failed to get the job done in the first place. Some annual eligibility checks were delayed five or more years, and state workers weren’t checking paystubs or verifying Social Security numbers, among other verification issues.

AFSCME filed a grievance to this effect, and an arbitrator ruled in favor of the union. The ruling mandates that Maximus’ contract ends April 30; the state will hire more than 500 new workers to do the job instead.

Of the cases 497,000 Maximus reviewed so far this year, the vendor identified more than 243,000 cases that were ineligible for benefits. Another 58,000 cases were eligible for some benefits, but not the benefits they were receiving. For example, some individuals enrolled in Medicaid may only qualify for programs with greater cost-sharing. In other cases, the parents may no longer be eligible for benefits, but their children are. Overall, the review has yielded an eligibility error rate of more than 60 percent.

The state moved forward with cancellations for 127,000 cases so far, likely representing between 190,000 and 230,000 individuals. That’s more people wrongfully receiving benefits in Illinois than the total number of people receiving Medicaid benefits in 12 states.

The company’s review had the potential to save the state $350 million.

Quinn denies allegations of a “backroom deal.”

“That isn’t the case,” Quinn told reporters in Chicago. “The fact of the matter is that I respect everyone. But I don’t want to spend the rest of my life in court.”

Now, this important task presumably will fall to a new fleet of state workers. AFSCME couldn’t be more thrilled.

“It’s time to end this failed experiment with outsourcing a critical public watchdog role to a private, for-profit corporation,” said Henry Bayer, executive director of AFSCME Council 31. “This order will bring oversight back to state government where it is directly accountable, and save money in the process.”

After all, who is better suited to keep an eye on government than … government?