Illinois hospitals, doctors getting big payday from state, but ‘unpaid bills’ problem remains

SPRINGFIELD (Illinois News Network) — Hospitals, doctors offices, nursing homes, and pharmacies across Illinois are in line for a huge payday this week. The state of Illinois is finally paying off about $9 billion in old Medicaid and other medical bills.

Danny Chun, spokesman for the Illinois Health and Hospital Association, says hospitals across the state are grateful for the money even though this payday doesn’t bring them all the way back to even.

“There are still bills out there that hospitals won’t be paid for,” Chun said. “The backlog is still there.”

Illinois is borrowing to pay the bills, and the comptroller isn’t paying all of what Illinois owes.

The state will pay about 3.5 percent interest on the borrowed money, a far better deal Chun said than the 9 to 12 percent that Illinois was paying in late interest on some of the bills.

But even with a 32 percent income tax increase enacted in July, Illinois does not have enough money to pay the rest of its past due bills, much less the medical and Medicaid costs that are being generated each and everyday.

“About $4 billion in state employee health care bills will be paid in the coming days,” Chun said. “But that leaves at least $1 billion unpaid. And there is no mechanism to pay that $1 billion for employee group health bills.”

Illinois’ total backlog of unpaid bills will be about $7 billion after the massive payday.

“What this does is hopefully stabilizes things, hopefully returns the state to some level of normalcy and stability,” Chun  said. “But that doesn’t mean everything is fine now.”

There is fear that hospitals and doctors may end up, once again, being owed by the state in the not too distant future.

About 40 percent of hospitals were facing a tough financial future even before Illinois went two years without a budget, Chun said. Those problems exploded when the state waited to pay its bills.

“Some hospitals, unfortunately, have had to institute layoffs, hiring freezes, service freezes,” Chun said. “Some hospitals have had to postpone major upgrades, building renovations, facilities improvements. They’ve had to put everything on hold.”

Chun said even with $9 billion coming from the state to the hospitals, those freezes and building delays won’t be lifted.

Written by Benjamin Yount. An industry veteran with two decades of experience in media, Yount reports on Illinois statewide issues for INN. Yount also hosts Watchdog Radio, a daily radio show on Cities 92.9 in Bloomington/Normal.