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Reeder: Illinois’ belated effort to combat Medicaid fraud hits snag

Scott Reeder

Scott Reeder

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Updated: August 11, 2013 6:16AM



Imagine walking into a government office, asking for $5,000 and being handed a check — without anyone bothering to verify whether you qualify for the money.

That’s how the state has been managing its Medicaid program for years.

While nobody actually gets handed a check, they receive a benefit with a value of about $5,000 — and a real cost to taxpayers.

Most folks who apply for the federal/state health insurance program for the poor are granted the coverage, but not enough has been done to ensure that recipients answer questions truthfully to determine whether they really qualify for benefits.

For some applicants, basic questions are never verified, including those regarding their income, citizenship and residency in Illinois.

Ever since the Medicaid program began expanding under former Gov. Rod Blagojevich, Republican lawmakers, in particular, have been waving the red flag and questioning whether everyone on the Medicaid rolls is really eligible.

Blagojevich was dismissive of the concern. Gov. Pat Quinn has given the matter lip service, and it has taken him four long years to do anything.

And what he has done so far is inadequate. Just ask Illinois Auditor General Bill Holland, who uncovered major problems with the state’s Medicaid program.

“When the first batch of enrollees were reviewed, they found about 60 percent weren’t eligible for the program,” state Rep. Patti Bellock (R-Hinsdale) said. “That says to me there is a major problem with the administration of this program.

“The bipartisan committee I was on predicted that if the administration did a full scrubbing of the Medicaid rolls, they would find 300,000 people enrolled who weren’t eligible,” Bellock said. “Taking these people off of the Medicaid rolls would save $350 million.”

Jonathan Ingram, a senior fellow at the Illinois Policy Institute, said there are many things that make the Illinois Medicaid system attractive to out-of-staters.

“Eligibility here in Illinois is broader than in most of our neighboring states. So it makes it attractive for people to enroll here who actually live elsewhere,” he said.

Ingram also said little is done here to weed out citizens of other countries who are unlawfully residing in the U.S. from getting Medicaid coverage, for which they are not eligible.

But now the Quinn administration wants to do something about all of the people illegally gaming the system. It has signed a $76 million contract with a firm that will carefully examine each person’s eligibility to receive Medicaid.

“I honestly think the reason the Quinn administration is finally doing something is because the bond houses are putting a great deal of pressure on him to reform pensions and the Medicaid system,” Bellock said.

Regardless of why the administration is taking action, or at least trying to do so, it’s clear that its efforts have hit a snag that could cost Illinois taxpayers hundreds of millions of dollars.

And that obstacle has a name: the American Federation of State, County and Municipal Employees.

The government workers union doesn’t like the state hiring an outside firm to scrub the Medicaid rolls. AFSCME thinks that work should be done by state workers, who would just happen to be members of, you guessed it, AFSCME.

Never mind that the state does not have the workforce or the technology to get the job done. AFSCME smells more membership dues pouring into its treasury if the state is forced to hire more workers.

The administration has signed a two-year contract with Maximus Health Services, which specializes in investigating Medicaid fraud.

But the state’s contract with the Virginia-based firm is in danger because an arbitrator recently ruled that the state couldn’t hire it, deciding that the Quinn administration should use state workers instead.

“That doesn’t make any sense,” Bellock said. “These are the same (state employees) who enrolled these ineligible people in the first place.”

Hopefully, Quinn has the good sense to appeal the arbitrator’s ruling.

Or better yet, the General Assembly ought to pass a law making it clear that such contracts with outside firms are legal.

After all, our cash-strapped state doesn’t have a dime to waste.

Scott Reeder is a veteran statehouse reporter and the journalist-in-residence at the Illinois Policy Institute, a nonprofit research group that supports the free market and limited government.



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