Chicago's Saint Anthony Hospital on fighting for timely, transparent Medicaid payments

As president and CEO of a safety net hospital, not many things surprise me. Every day at Saint Anthony Hospital, we embrace the challenges that arise from caring for Chicago's most vulnerable populations. 

But even after 20 years in the healthcare industry, I can still be taken by surprise now and then. I've been astounded at the way the State of Illinois has allowed its managed care organizations to delay and refuse payments for Medicaid services, and to hide how they compute the payments they do make. I've worked in other industries, and I understand that billing and payment transparency issues can arise from time to time, but the MCOs take it to a whole new level. 

As a result of Illinois' shift to managed care from direct Medicaid payment by the state, our cash reserves dropped by 98% over four years as we were forced to deplete them to keep up with expenses. We did a precarious cashflow dance, barely able to pay our staff, while relying on our suppliers' patience and goodwill. Meanwhile, the for-profit MCOs earned billions from under a system by which the state pays the MCOs a fixed annual capitation per patient. The result is an incentive to delay and underpay providers to enhance MCO profits. 

An independent investigation by the Better Government Association confirmed widespread late payments and underpayments. The investigators also identified a disturbing pattern of senior state regulators moving to and from employment with the companies they are supposed to oversee. 

Late payments and lack of remittance transparency forced our hospital in 2020 to sue the Illinois Department of Healthcare and Family Services, the agency responsible for assuring that we are paid on time and with full disclosure. We had to sue because the MCOs hired by the state routinely disregarded federal law that require timely and transparent payment to Medicaid providers. Saint Anthony is still owed in excess of $20 million. 

Our legal battle hasn't been easy. Even establishing our right to sue has been a challenge. Our lawsuit was dismissed in 2021, a decision that was reversed by the appeals court in 2022 and reaffirmed in April of this year. The federal appeals court recognized that our hospital, like many other providers, "depends on full, timely Medicaid payments that keep its doors open and provide care to the patients." The ruling was monumental for us, for the many community-based safety net hospitals in the same position and for Medicaid patients who rely on our care.  

If any other billion-dollar state-regulated business made delayed and unexplained partial payments, you can bet the state would take action. 

But when it comes to large insurance companies managing Medicaid, the regulators have shown no interest in regulating. The state and MCOs have even told us that if we want to know how individual payments are computed, we should hire staff to reverse engineer the payments. That is ridiculous. I've never had the process of collecting money for work performed made this difficult by anyone, let alone by third parties supposedly working for the state to pay for medical care for the poor. 

The impact of these delayed payments is enormous, a death by a thousand cuts. We have had to put off purchases and repairs, using our maintenance funds to pay staff instead of repairing things like the elevator that recently stopped working. Due to the millions owed by the MCOs, we have to skimp on expenditures like that. Our hospital, built in 1898, is in need of critical repairs, and more importantly, we are in need of an updated hospital structure for the communities we serve. 

Saint Anthony is a globally minded community hospital, never turning anyone away for inability to pay. We are community-centric, engaging families on many levels to improve and sustain their well-being. I wish our state's Democratic Party, which controls Illinois government, shared the same mindset as us in delivering care to the state's most underserved population, but surprisingly they are supporting the multibillion-dollar for-profit insurance corporations. 

Despite our challenges, we are still developing new models for public care that lead to success for the community. And we are thinking beyond our own hospital, taking on the state on behalf of all safety net hospitals forced to bear the burden of their inaction. 

I am hopeful our lawsuit against the state can be resolved soon, putting us and others like us on a steady footing to focus on what we do best — taking care of needy patients who deserve high-quality care. But to do that, state regulators must insist on better performance by the MCOs — either voluntarily or as a result of a court order. 

Guy A. Medaglia is president and CEO of Saint Anthony Hospital in Chicago.

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