Illinois Medicaid paid physicians too slowly, state audit says

But doctors are applauding the state's efforts to speed up payment.

By Doug Trapp, AMNews staff. June 16, 2008.

Washington -- An audit of Illinois' Medicaid program concluded that a $1.5 billion financial shortfall led to delayed physician, hospital and nursing home reimbursements in recent years. But physicians report that the state is processing claims more quickly today, and hospitals soon may see more timely payments as well.

For years, Illinois physicians have been accustomed to the Medicaid pay cycle lagging near the end of the state's fiscal year on June 30, then picking up speed with the influx of new state funding in the summer. It was not unheard of for physicians to wait more than 200 days to get paid, said Vincent Keenan, executive vice president of the Illinois Academy of Family Physicians.

The audit, which covers fiscal years 1999 to 2007, was released May 13 by Illinois Auditor General William G. Holland. It found that although the state processed Medicaid claims quickly, it was slow to send them to the Illinois State Comptroller for payment. For example, in fiscal 2006, the state took an average of six days to process claims but 57 days to submit them to the comptroller.

The state potentially owes $81 million in interest payments to doctors, hospitals and others caring for Medicaid enrollees, the audit found. That's because state law requires interest to be paid when Medicaid claims take longer than 60 days to process. Of that total, so far the state has paid $21.8 million in interest for claims submitted between 1999 and 2007.