Audit of Illinois’ Medicaid program reveals gross mismanagement

According to a federal audit released Aug. 18, Illinois’ Medicaid program routinely over-estimated the amount of funds it needed from federal coffers to the tune of nearly $1 billion from 2010 through 2012. Over that three-year period, the state would spend the Medicaid money elsewhere and was slow in repaying the federal government, costing federal...

According to a federal audit released Aug. 18, Illinois’ Medicaid program routinely over-estimated the amount of funds it needed from federal coffers to the tune of nearly $1 billion from 2010 through 2012.

Over that three-year period, the state would spend the Medicaid money elsewhere and was slow in repaying the federal government, costing federal taxpayers $792,000 in lost interest.

The state took $919 million more from the federal funds for the Medicaid program than it should have from 2010 through 2012, according to the Inspector General’s report:

“The State agency recognized that it had overdrawn funds in its quarterly reconciliations. However, the State agency could not repay the overdrawn amounts immediately because the overdrawn funds were no longer in the GRF [general revenue fund]. According to a State agency official, the Illinois Comptroller spends all funds in the GRF without regard to matching revenues to expenditures. Therefore, the Illinois Comptroller used the overdrawn Medicaid funds to pay non-Medicaid expenditures because funds in the GRF were commingled.”

So not only was money taken wrongfully, but it also was used for non-Medicaid expenditures so quickly that it couldn’t be repaid in a timely manner. According to the report:

“The State agency could not immediately repay the overdrawn amounts because the funds were used for purposes other than Medicaid. Rather, the State agency repaid the overdrawn amounts 2 to 6 months later. As a result, the Federal Government could have lost as much as $792,000 in interest.”

Illinois’ Department of Healthcare and Family Services manages the state’s Medicaid program, and expects 430,000 new Medicaid enrollees by the end of the year as a result of the federal health-insurance overhaul. One has to wonder how an agency that has had such a difficult time managing the program’s affairs up to this point will be able to manage this increased responsibility.

This episode is just the state’s latest black eye in the national media for failing to keep its fiscal house in order. Sadly, few should be surprised when (not if) Illinois finds itself in the national spotlight again for the wrong reasons.