Cook County Health’s Medicaid managed care plan has about $350 million in unpaid medical claims, according to data presented during a health system board meeting today.

As one of six private health insurers administering Medicaid benefits to beneficiaries in Illinois, CountyCare is required by the state to pay claims within 30 days, health plan CEO James Kiamos told board members. But as of Feb. 9, he said the health plan was more than 90 days behind schedule for claims that have been received but not paid.

The culprit: Late payments from the state and the county.

“This is a byproduct of funding. It’s not a byproduct of plan operations,” Kiamos said, noting that CountyCare is profitable.

Under Illinois' Medicaid managed care program, the state pays insurers like CountyCare a set amount per patient rather than paying for each medical service provided. The goal is to improve people's health and control costs by ensuring all care is appropriate and high-quality. But health care providers—especially safety-net hospitals that treat large numbers of low-income patients—say claim denials and late payments from insurers threaten their operations.

Between August and January, CountyCare got more than 30 complaints from hospitals and other health care providers alleging the Medicaid managed care plan owes them money, according to data obtained through a Freedom of Information Act request Crain's sought. Several complaints said doctors hadn’t been reimbursed for medical services in more than 90 days; others referenced hundreds of thousands of dollars in unpaid claims.

The Department of Healthcare & Family Services, which oversees Medicaid in the state, did not immediately reply to a request for comment.

“We have to improve our cash flow. That’s the long and short of it,” health board Chair Hill Hammock told board members in response to Kiamos’ presentation.

Complicating matters is the fact that everything gets paid through county government, including hospital bills, said Bob Reiter, the board’s finance chair.

Hospital operations, including providing free care to poor people, impact county government’s cash flow, board members said. The system expects to spend roughly $590 million in fiscal 2020 on charity care and bad debt, or unpaid bills.

FOLLOW THE MONEY

Here’s how CountyCare claims get paid: The state pays Cook County, which puts the funds into a bank account from which it pays all its bills. CountyCare sends its bills to the county, which then go to Evolent, a third-party administrator that ultimately pays the claims, Cook County spokesman Ted Nelson said in an email.

Late payments from the state create a “complicated domino effect for cash flow management,” since the county still needs to cover incurred costs and daily operational expenses like payroll, Nelson said. Even after the money is received, “the health system has to prioritize all its bills—including payroll—before paying out any CountyCare claims,” which can cause additional cash flow constraints.

Nelson added that payments are more regular under the Pritzker administration than they had been during the budget impasse during Gov. Bruce Rauner's administration.

With about 318,471 members in Cook County, CountyCare has 15 percent of the state’s Medicaid managed care market, according to data from Healthcare & Family Services. Kiamos said the number of enrollees will increase, thanks to a partnership with Chicago Public Schools and a boost from the state.

Starting April 1, HFS will automatically send 50 percent—up from 35 percent—of Medicaid enrollees in Cook County to CountyCare. Medicaid beneficiaries have 30 days to choose a plan. Those who don't—historically, about half—are automatically assigned to an insurer by the state.

Kiamos said the boost is due to the plan’s innovation and quality, noting that it’s one of the top-rated Medicaid managed care plans in the state, according to the National Committee for Quality Assurance, a nonprofit organization that rates health plans based on consumer satisfaction and clinical quality.

With a $2.8 billion budget, Cook County Health, one of the largest public health systems in the nation, operates Stroger and Provident hospitals as well as clinics across the county. Leaders say CountyCare has contributed more than $1 billion to the health system over the past five years.

Health system finances are top of mind for county elected officials. This week, the Cook County Board voted to give itself more power over the selection of the county health system's next CEO, and to give Cook County Board President Toni Preckwinkle a direct appointment to the system board.

Preckwinkle has also hired Otis Story as her new deputy chief of staff with a “day-to-day focus on health care.” Story is a “longtime health care executive with a career focus on safety-net hospitals” and will assist her chief of staff “in the development of policies, programs and other executive functions related to CCH” with a $140,000 salary, according to spokesman Nick Shields.

Meanwhile, in a report released this week, the Health Care Council of Chicago, which seeks to address health-related issues and support growth around the city, said it expects that “CountyCare will seek some key strategic partnership or may end up transferring or selling its assets to another party as a means of securing needed financial resources that could be applied to the broader stability of the (health) system.”