August 14th, 2008
As the Register Star reported this morning …
Rep. Chuck Jefferson, D-Rockford, reversed course [Wednesday] and embraced Gov. Rod Blagojevich’s changes in his bill to help college students keep health insurance when they must leave school because of illness or injury.
Jefferson said he initially viewed Blagojevich’s veto as an attempt to sabotage his initiative, but later decided to accept the governor’s changes — which dramatically expanded its scope — because he believes in increasing health care.
“Plans do change sometimes,” Jefferson said.
So what does this mean? There are practical and political implications.
First, the practical: If the bill — as amended by the governor’s changes — becomes law, then employers across Illinois likely will be on the hook for the cost of additional insurance sought by employees with children between 18 and 30.
The core of Jefferson’s bill would require health insurers to continue covering for a year dependent, full-time college students who leave school or reduce classload because of a catastrophic illness or injury. Under Blagojevich’s additional language, parents would have the option of simply keeping children on their private health plan until they turn 26 — or, in the case of veterans, the age of 30.
Blagojevich refused to acknowledge last night that employers might face additional cost, but Blagojevich also has a history of ignoring or even denying reality. “I don’t know that it’s going to cost them anything,” Blagojevich said.
So what happens now? It’s up to the Senate to decide whether to follow accept the governor’s changes to Jefferson’s bill, as the House did last night. It’s not clear when the Senate might vote, as the chamber is not scheduled to meet again until after the November general election. (On Wednesday, the House and Senate were meeting in a special session Blagojevich had called.) Blagojevich said Wednesday night that he would soon reach out to Senate President Emil Jones Jr., D-Chicago, concerning the schedule for a vote.
And this takes us to the political implications. These days in Springfield, most all significant action must be viewed through the lens of the ongoing feud between Blagojevich/Jones and House Speaker Michael Madigan, D-Chicago. This move by Jefferson, a member of Madigan’s exclusive leadership team, is no exception.
By reversing position and accepting the governor’s changes to his bill, I believe Jefferson — backed by Madigan — accomplished the following:
1) He called the governor’s bluff. Blagojevich’s amendatory veto of Jefferson’s bill was widely viewed, by Jefferson and others, as a clear attempt to sabotage Jefferson’s bill in the course of Blagojevich’s feud with Madigan. By calling Blagojevich’s bluff, Jefferson (again, backed by Madigan) stunned other lawmakers, the business community and, apparently also, the governor. Rather than making a predictable move by fighting the governor’s changes, Jefferson & Madigan surprised him — and may keep him guessing in the future.
2) He neutralized a future attack by Blagojevich. Had Jefferson led the House in rejecting the governor’s changes to his bill, Blagojevich no doubt would have blasted the House — loudly and repeatedly — for voting to deny children health care. That’s just how Blagojevich works.
3) He kicked a political hot potato into the lap of Jones — Blagojevich’s ally and Madigan’s adversary. Jones must now reconcile the governor’s health-care initiative (riding on Jefferson’s bill) and fierce opposition from the business community. Jefferson and Madigan didn’t have to reconcile any fierce opposition from the business community because, quite frankly, the House voted on the governor’s amendment to Jefferson’s bill about an hour after it became clear that Jefferson would move to accept the amendment. It happened in a flash. There was no committee hearing. There was little informed debate on the House floor because other lawmakers had to spontaneously get up to speed on the governor’s changes to the bill. But now that this bill as amended is just one or two Senate votes from becoming law, the business community is paying attention. And it will be up to Jones to deal with them. (The business community, by the way, perhaps should not have assumed — and many others did — that Jefferson’s bill was all but dead after the governor amended it. Last night, the Illinois Chamber was completely taken off guard.)
Update 1
I should add that there’s also a constitutional angle.
There is much debate in Springfield about whether Blagojevich has the constitutional authority to amend a bill in this way. Yes, the governor of Illinois does have the power of amendatory veto. And that means he may veto a bill by suggesting changes to it, sending it back to lawmakers for their consideration of his changes. But the governor may not use an amendatory veto to wholesale re-write a bill, courts have held.
During Wednesday night’s floor debate over the governor’s changes to Jefferson’s bill, House Majority Leader Barbara Flynn Currie, D-Chicago, all but declared that the House Democrats’ motivation behind accepting the governor’s changes to Jefferson’s bill was to create a new test case for the courts.
“I think that the lack of clarity from the court decisions may mean that it’s time for a second crack for the judicial branch. Maybe we ought to invite the question before the courts whether this particularly amendatory veto, for example, does go beyond the scope of that authority provided in the Constitution. For that reason, I would suggest that an eye vote may help us answer this question that has been so contentious between the two branches ever since 1971.”
May 7th, 2008
Gov. Rod Blagojevich’s determination to unilaterally expand state-subsidized health care, despite the fact that lawmakers repeatedly rejected his plan and refused to provide funding for it, has prompted quite the debacle.
His administration claims it can’t easily differentiate between costs associated with his unilateral expansion of FamilyCare — a move recently blocked by Cook County Judge James Epstein — and those costs associated with the state’s previously existing, core health care programs including Medicaid.
And because the administration cannot distinguish between legitimate and illegitimate payments, state Comptroller Dan Hynes is withholding payments for legitimate health care expenses as well as payments associated with the governor’s blocked expansion, according to Larry Blust, an attorney for the administration.
Hynes did “not receive from (the administration) any information from which (he) could independently determine which invoice vouchers relate to services provided under the old eligibility guidelines and which vouchers relate to services provided under the new guidelines at issue in this case,” Hynes’ attorneys said recently in a court brief.
Hynes therefore “would be unable to determine on a day-to-day basis whether (his office) was or was not complying with any (temporary restraining order) or preliminary injunction that might be entered by this court,” they said.
If Hynes withheld health care payments across the board for fear of violating the judge’s order by inadvertently making payments associated with the governor’s now-blocked health care expansion, then doctors and health care providers who provided services under the state’s legitimate health care program are not getting paid.
According to Blust, Hynes withheld at least $72 million in payments. Hynes spokeswoman Carol Knowles declined to answer questions concerning the comptroller’s policy on these payments, instead referring me to the Illinois Department of Healthcare and Family Services, which administers the state’s health care programs.
The Department’s Response
I approached the agency with a series of questions by phone and e-mail on Friday. Agency spokeswoman Annie Thompson finally responded by e-mail Tuesday night, and here is her entire statement:
We have halted enrollment for the Family Care expansion while issues are worked out in court. The approximately 30,000 existing enrollees are still covered under the permanent rule. While those who intervened in the lawsuit - Mr. Gidwitz, Mr. Baise, and the Attorney General - are aiming to take coverage away from working parents in the expansion group, we have not removed anyone from the program.
My questions on Friday were aimed at gaining a response for a news story and related column I authored for Saturday’s Register Star. The news story concerned the agency’s decision to cease enrollment in the governor’s expansion. The column concerned a group of 25,000 people who belonged to FamilyCare before the governor’s expansion, and whose health care now appears to be at risk.
In her Tuesday night response to my Friday questions, it’s worth noting that Thompson did not provide a more detailed response to our Saturday coverage.
It’s also worth noting that Thompson did make a point of attacking individuals who joined Richard Caro’s lawsuit against the governor’s health care expansion.
Also, when she referred to “30,000 existing enrollees,” I presume she was referring to the class of individuals previously enrolled in FamilyCare; my sources told me there were 25,000 people in this class. But when she said they are “still covered under the permanent rule,” I have no idea what she was referring to. The Joint Committee on Administrative Rules, a special panel of lawmakers that reviews the administration’s rules, rejected both an emergency and permanent rule that her agency filed to implement the governor’s expansion. The judge’s order blocking the governor’s program backed JCAR’s decisions.
As I reported in the Saturday column, the agency used those same rules to advance a rule change necessary to continue providing coverage to this class of 25,000/30,000 people. Again, the rules were rejected both by JCAR and Judge Epstein. The state now appears to have no authority, under it rules, to cover the cost of health care for these people and to call on the federal government to reimburse at least half of that cost. So, like I said, I have no idea what Thompson is talking about.
The Comptroller’s Role
The comptroller is responsible for paying the state’s bills. He acts in response to vouchers — requests for payment — presented to him by the administration. His attorneys argue it’s not up to his staff to sort through thousands of vouchers to determine which ones ought to be paid versus those that should not be paid.
“Even if the Comptroller’s Office received data from which it might conceivably be able to distinguish between vouchers for services provided under the expanded guidelines as opposed to the services provided under the old guidelines, the sheer volume of vouchers processed by the Office would make it a practical impossibility for the Office to exercise any role in preventing payment of services that would qualify under the new eligibility guidelines,” Hynes’ attorneys said.
“Each year the Office processes approximately 16 million voucher transactions, or more than 300,000 every week. Any injunction requiring the agency heads to provide additional information to the Comptroller’s office so that the Office could make an independent determination as to whether payments were being made according to the old guidelines or the new guidelines would require a complete overhaul of the SAMS computer system and would likely require that the Office hire significantly more auditors.”
For more background on the comptroller’s view of the conundrum the administration placed him in, see this brief that his attorneys filed in support of his motion to get out from under the judge’s injunction.
Deflecting Blame
Following are remarks made by attorneys for the administration and the comptroller in a hearing before Judge Epstein on April 23, according to a transcript of the hearing provided by Richard Caro, a west suburban attorney who filed the lawsuit against the governor’s expansion. At issue in the hearing is Epstein’s decision to stay his preliminary injunction as it pertains to Hynes but to leave the injunction intact as it pertains to the administration.
The administration sought during the hearing to also get out from under the injunction, though the judge refused.
(It’s not clear why Blust refers to Medicare in the transcript. Medicare is a federal program that is not at issue in the case. Medicaid, the state’s core program, is at issue in the case. Blust may have mistakenly referred to Medicare, or the court reporter may have mistakenly reported that he said Medicare when he said Medicaid.
A “stay” is a suspension of the judge’s order blocking the administration from carrying out, or making payments for, the governor’s expansion. The administration is appealing the judge’s order.)
We begin with Blust explaining the administration’s pickle in complying with the injunction. This gets to the heart of health care providers not getting paid:
MR. BLUST: We intend to comply with
the order unless the relief is granted on stay. We
did ask Your Honor in another motion we did file
today for a stay.
The main reason for that is because of
the stranded provider problem. Neither we nor the
controller — and I’ve tried to say this a couple
times, and I know Your Honor doesn’t like to hear it
– neither we nor the controller have the full
information apart from each other to do what’s
necessary in regard to providers if they’re not going
to be paid.
We have spent what I would call almost
an inordinate amount of time trying to figure out
what it would take to go in and find out who the
payors out there are who gave services during the
emergency rule and who haven’t been paid yet.
First of all, we don’t know who the
controller has and hasn’t paid.
Second, they don’t know — as Your
Honor may remember, the budget line here is by
service. Most of the people in FamilyCare also have
family members in other programs. So they have one
provider number, one authorization number.
So someone has to go in manually and
determine who has to be dealt with there and who
doesn’t, what the services are that were rendered
that can’t be paid if Your Honor is correct, which we
obviously don’t think you are or we wouldn’t have
appealed it, but who, in fact, has to do this.
What we’re proposing to stay, I think,
would — well, it would allow — that payment would
ameliorate the situation for people who acted in good
faith and rendered services based on provider
numbers.
Now, as I understand it, there’s like
$72 million worth of Medicare payments being withheld
at the controller’s office, not because there’s 72-
under this program. There’s probably a million at
most under this program, if that. But because, in
fact, they don’t know whether paying those would
violate Your Honor’s orders, we can’t authorize
vouchers from people either under Your Honor’s court
order.
Our agency approves the services. The
people who do that do not know whether that service
was rendered under Family Care, All Kids, some other
Medicaid/Medicare program.
So the first thing that has to happen,
I believe, after spending a lot of last week
investigating this, and we really need to do some
more, is we would have to write a program to separate
all of that out.
This is like — Medicaid is kind of
like a unitary batch processing program. A little
like the controller described; the same is happening
on our side.
We have two computer programs –
Epstein at this point interrupted Blust, noting the administration created this problem for itself:
THE COURT: The difference is, it was
created by your side, this issue –
MR. BLUST: And I’m not –
THE COURT: — and not by the
controller.
MR. BLUST: I’m not asking him for
sympathy for our creation. I’m just simply saying,
we have an issue here where we need — I don’t
believe it’s possible to say the controller has no
part –
THE COURT: Let me just stop you for a
second, Mr. Blust.
I take it the controller’s office has
no problem cooperating with the executive branch
other defendants in giving any information that is
within the power of the controller to give that would
allow them to comply with my order.
Peter Koch, an assistant attorney general representing Comptroller Hynes, at this point joined the conversation. Koch indicated it’s not clear to Hynes what the administration wanted from Hynes in order to fix its mess:
MR. KOCH: Of course, Your Honor. We
don’t have — they have not identified anything from
us, but there’s no reason why we wouldn’t cooperate.
THE COURT: That’s fine. I’m not
going to stay my order. It’s going to stay in full
force and effect.
And take the steps that are necessary
to promptly comply with the order.
MR. BLUST: Again, Your Honor, as we
said, unless we get a stay from the appeals court or
you, that’s what we’re doing.
THE COURT: Well, it’s down to the
appeals court at this point.
Blust at this point tried to persuade Epstein to stay the injunction as it pertained to the administration, just as the judge stayed the order as it pertains to Hynes, but Epstein wouldn’t do it.
It’s not entirely clear to me why the administration wanted the judge to stay his order as it pertains to the administration, but I suppose the administration would rather not deal with the trouble of separating the legitimate health care bills from the illegitimate ones. If the judge stayed his order as it pertains to the administration, then perhaps the administration believes that it won’t have to bother with this troublesome task.
Judge Epstein alluded to the administration’s demand for information from Hynes:
MR. BLUST: Well, we have to ask you
for a stay, too. I believe you do have the authority
to grant a stay.
THE COURT: And I’m respectfully
denying that.
And I would ask the controller’s
office to please comply with the best — within the
best of your ability to give them the information
which they claim they need to be able to undo that
which they have done.
MR. KOCH: Your Honor, we have no
objection to that. I did file separately today a
motion to modify the –
THE COURT: Which I think I’m barred
from doing –
Koch asked the judge to continue the stay relative to Hynes:
MR. KOCH: Yes, Your Honor.
Previously, last time we were here,
you did grant a stay of the injunction as to the
controller for seven days, and it was the
understanding, I think of all the parties here, that
we try to work something out.
I’d ask that the Court continue that
stay, at least as to the controller.
Epstein agreed to do just that:
THE COURT: I will as to the
controller, with the understanding that I am asking
the controller to please cooperate within the best of
his ability with the other executive branch
defendants to give them the information which they
claim they need to be able to comply with my order.
MR. KOCH: Any letter from Mr. Blust
I’ll forward on to the controller.
THE COURT: But it should be done with
all speed, because I think the longer this goes on,
if I am correct, the more money that would be spent
in violation of the order.
MR. KOCH: We will await questions
from Mr. Blust.
MR. BLUST: We’ve tried to do this
directly with the agencies. I suppose we can do
this through — it’s really hard to encourage the
people in the controller’s office and the department
to work together on this and not have to –
THE COURT: I don’t know that this has
to go through you. You can talk to your respective
clients on that. I don’t suppose I have to encourage
these people or, for that matter, any litigators to
paper what you’re doing so that it can be
demonstrated who, if anyone, is dragging their feet,
because should this be affirmed and should there be a
failure to comply with the order, there will be
sanctions, and that’s all I need to really say on
that.
Let’s recap: The governor’s administration claimed it couldn’t distinguish between legitimate and illegitimate health care bills, and it’s unclear how or when it might sort this out. Meanwhile, the comptroller is withholding payment on both fronts, and is looking to the Illinois Department of Healthcare and Family Services to sort it all out. The judge, for his part, is concerned about the state making payments in violation of his order.
A Big, Big Mess
Late Tuesday, Caro added this in an e-mail:
Blust meant all Medicaid payments have been held up
until HFS can determine which ones have been enjoined
from being paid. Under State law it is a serious crime
for HFS to certify to the Comptroller a bill as
lawfully payable. Apparently on April 15 after
issuance of the preliminary injunction HFS sent over a
computer tape asking the Comptroller to pay $72
million in Medicaid charges, which included charges
that were enjoined from being paid. The injunction
effectively voided any prior certification. So now HFS
has to figure out what bills can’t be paid and that is
a tough, tough job, and requires a manual review of
each and every charge. There may be hundreds of
thousands of submissions to review. May 15th is coming
soon and the same problem exists for those payments.
How long will it take HFS to sort what can and can not
be paid, no one knows. The Judge’s position was that
HFS created the problem and it’s up to them to do
whatever it takes to comply asap.
What a mess.
The lawyers are back in court this week Monday.
May 5th, 2008
Try as he might to unilaterally expand the availability of state-subsidized health care, Gov. Rod Blagojevich is pushing his program forward with one step forward, two steps back.
Blagojevich kicked off spring session last year by calling on lawmakers to approve his version of universal health care backed by the largest tax hike in Illinois history — a tax on the gross receipts of Illinois businesses. But the House shot down his gross receipts tax, and the governor failed to shepherd his health care plan through either chamber of the Legislature — even the Senate, where his ally Emil Jones Jr. is president.
Onward to August, when Blagojevich used his veto power to slash more than $460 million in grants and other spending — pork, he called it — from the budget that lawmakers belatedly approved. He focused his cuts on grants secured by political adversaries, sparing those earmarked by political allies.
The governor insisted at the time that he would use the money to support his health care plan. Never mind that lawmakers, whom under the state Constitution have the exclusive power to “make appropriations for all expenditures of public funds by the State,” had not appropriated the spending for his health care plan; the governor insisted he could unilaterally redirect the spending for his health care plan anyway.
“In short, I’m cutting pork and special interest spending, and in its place, I’m using the legal authority that I have to expand health care,” the governor said.
In November, the governor’s administration filed an “emergency” rule to vastly expand the state’s FamilyCare program, pushing Illinois toward his goal of universal health care. It said the “lack of access to insurance has reached a crisis level requiring immediate action.”
Fast forward to this spring, when the governor’s aides applauded him for saving the budget from an even larger budget hole. When the governor’s office announced that the budget has a $750 million deficit for the fiscal year ending June 30, they said the hole would be far larger if the governor hadn’t taken fiscally prudent action last August and vetoed more than $460 million in spending.
The governor’s budget proposal, delivered in February, said this about his August veto:
Anticipating a potential budget deficit resulting from
the General Assembly’s budget passed in HB3866,
the governor exercised his amendatory veto authority
to reduce appropriations by $463 million. This
reduction was implicitly anticipated by the General
Assembly, which passed a budget that required the
state to not spend over $830 million in appropriated
spending in order to meet the their own overly
optimistic revenue projections.
In other words, the governor said in August that he was shifting the spending to his own priority (despite the absence of an appropriation allowing him to do so), and then he said in February that he saved the state a bunch of money by cutting the spending (though, by his reckoning, the state remained $750 million in the hole). Hindsight is 20/20, I suppose, particularly when it serves the governor’s interest.
Well, it turned out the governor’s “emergency” rule, and a subsequent permanent rule, did not successfully facilitate the expansion of health care. A special panel of lawmakers charged with reviewing the governor’s rules rejected both of those rules. And in mid-April, a Cook County judge followed the panel’s lead and also beat back the governor’s program.
As I reported in my Saturday column, even as the governor insisted on the expanded program embodied in his emergency and permanent rules, his strategy threw into question coverage for roughly 25,000 people who previously enjoyed it.
When the Blagojevich administration moved last November to expand health care to folks earning far more money than these 25,000 people, it used them as bargaining chips. When the administration ultimately failed to implement the governor’s larger program, it left health care for the 25,000 lesser-earning individuals in limbo.
“They wanted to piggy back the governor’s expansion onto the people that really faced some hardship here and they put everybody in an all-or-nothing proposition,” said Rep. John Fritchey, D-Chicago.
Meanwhile, the administration has instructed health care workers to stop enrolling people in the program set forth in the emergency and permanent rules. Its stop-new-enrollment memo also covered the group of 25,000 people who had health care before the governor launched his controversial rules in November. (The memo speaks in terms of a participant’s income as it relates to the federal poverty level. To decipher that code, go here and scroll down to the chart.)
As the Register Star reported on Saturday:
In a memo dated April 22, the administration ordered health-care workers to not enroll any more adults, age 19 or older, earning more than $13,832 annually. Pregnant women may earn up to $20,800 and still qualify, the memo said.
The shift is consistent with a Cook County judge’s April 15 order blocking the governor’s push to make health care available to adults earning up to $41,600.
Still, it marks a retreat for Blagojevich. Since last fall, he has pushed his expanded program forward even though lawmakers refused to authorize the spending and a special legislative panel twice rejected rules that his administration advanced to enact it anyway.
For background on the court case, see the Web site of Richard Caro, a west suburban attorney who initiated the lawsuit against the governor’s expansion.
On Friday, I placed a series of questions by e-mail and phone with Annie Thompson, spokeswoman for the Illinois Department of Healthcare and Family Services. I still don’t have answers.
February 14th, 2008
Cap Fax Blog today highlighted some of the more interesting but largely unnoticed points of state Comptroller Dan Hynes’ recent report on state finances.
Cap Fax noted the comptroller’s observation that the rate of uninsured people in Illinois has not dropped, despite Blagojevich’s repeated new health care spending initiatives:
While spending more on health care, the number of uninsured in Illinois has not changed significantly. According to the U.S. Census Bureau, approximately 1.76 million Illinoisans (13.9% of the population) were uninsured in 2003. In 2006, the estimate of uninsured was 1.78 million, or 14.0% of the state’s population.
Cap Fax added:
The governor’s office claims that the number of insured has increased since that Census report was issued, but the impact - while undoubtedly important to those who now have health insurance - hasn’t been huge overall, despite all the huffing and puffing from the guv.
I’d like to add one more point. Let’s not forget that Blagojevich actually cut Medicaid spending by $90 million when he vetoed more than $400 million from the state budget in August. In doing so, he constricted his own health care agency’s spending on his own top — priority.
In one section of the budget, lawmakers appropriated $2.706 billion in Medicaid spending on hospitals and Blagojevich reduced it to $2.666 billion — a difference of $40 million. In that same section, lawmakers appropriated $744 million in Medicaid spending on nursing homes, and Blagojevich reduced it to $694 million — a difference of $50 million.
If you’d like to see for yourself, the budget approved by lawmakers is here. The relevant hospital and nursing home funding is on page 436. Hospital spending is line 13 and nursing home spending is line 18.
Blagojevich’s veto message is here. The vetoes corresponding with the hospital and nursing home funding are on page 67 of the message. See the third and fourth lines of the page.
