UP CLOSE: State Comptroller Susana Mendoza tours Loretto Hospital on May 10 to see the hospital's challenges with slow Medicaid payments by managed care organizations. | Courtesy Loretto Hospital

Illinois State Comptroller Susana Mendoza was at Loretto Hospital, 645 S. Central Ave., on May 10 to talk about the challenges that safety-net hospitals are confronting because of slow Medicaid payments by managed care organizations. 

Leaders of safety-net hospitals across the state have met with lawmakers in Springfield and called for reforming the system. Last week, Mendoza said that Loretto’s leaders made her office “aware of the problems being caused by delays and unpredictability in the payment of state Medicaid funds by the managed care organizations (MCOs).” 

The comptroller said that she was visiting the West Side hospital, which is a hospital of last resort for many uninsured and under-insured patients in the area, in order to “see first-hand” the work that the staff is doing “and to hear from the hospital leaders about those funding challenges.” 

According to a statement the hospital released on May 8, the MCO program is designed to provide health care services and Medicaid health benefits through an arrangement between state Medicaid agencies and managed care organizations. 

“When the program was initiated, it swore to deliver more efficient, quality health care, and improve health outcomes to beneficiaries in the program, while also reducing Medicaid program costs,” the statement reads. “However, the MCOs have yet to deliver on their promise.” 

George N. Miller, Loretto’s president and CEO, said that it takes MCOs an average of 154 days to pay the hospital. 

“When they decide to pay us, they deny 26 percent of our claims,” he said. “This is poor business, unfair, and unacceptable.” 

Loretto officials said that the 26 percent denial rate is standard among safety net hospitals in Illinois. They said that state Sen. Kimberly Lighford (4th), who is also the Senate Majority Leader, and state Rep. Camille Lilly (78th), who is also Loretto’s chief external affairs officer, have introduced two bills to mitigate the problem. 

Lightford’s Senate Bill 1807 and Lilly’s House Bill 2814 would require MCOs to “expedite payments to hospitals, and discharge patients much faster once they have been released from the physician’s care, or they must pay for any additional time the patient remains in the hospital,” Loretto officials explained. 

“MCOs would also be required to update the provider directory/physician rosters each week and reimburse physicians contracted with the MCOs for medically necessary service regardless if the physician is included in the updated directory,” they added. “In addition, managed care organizations must give hospitals enough time to correct errors health care claims.”

“We have been suffering for a long time, and have made many visits down to Springfield to tell our story,” Miller said. “We are truly honored that the Illinois State Comptroller is stepping in to help safety nets across Illinois.” 

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