Deadbeat Illinois: Expedited payments possible, but it’s tricky

Monday

Feb 18, 2013 at 1:00 AM

PEORIA — It may be a while, if ever, before Illinois resolves its worst-in-the-nation budget quagmire. In the meantime, the state has tried to come up with solutions to resolve the dilemma the budget crisis presents for businesses, social service agencies and others who do business with the state.

By Pam AdamsGateHouse News Service

Editor's Note: This is the latest installment in the Deadbeat Illinois series, where reporters from GateHouse Illinois newsrooms examine the real-world effects of the state’s failure to pay its bills. Each Monday, we’ll share the stories of those affected. See more on the Deadbeat Illinois Facebook page.

PEORIA — When the state of Illinois stopped expediting payments to Peoria/Pekin Yellow Checker Cab Co., the taxi business stopped transporting Medicaid patients to dialysis and other medical appointments.

By the time PARC, a Peoria-based not-for-profit agency that provides services for people with developmental disabilities, became eligible to receive expedited payments from the state, it was almost $1 million in debt — money borrowed because of Illinois’ lengthy delays in reimbursing PARC for services in the first place.

Heartland Community Health Center hasn’t had to wait as long for Illinois to pay its bills as PARC and thousands of other businesses and agencies throughout the state, but that’s because it would be doomed if it had to wait six months or more to be reimbursed.

It may be a while, if ever, before Illinois resolves its worst-in-the-nation budget quagmire. In the meantime, the state has tried to come up with solutions to resolve the dilemma the budget crisis presents for businesses, social service agencies and others who do business with the state.

‘Vicious cycle’

Before an agency shuts the door and turns out the lights, the Illinois comptroller’s office encourages management to contact the state agency that provides its funding or to the comptroller’s office itself to find out if payments can be prioritized.

“But that’s always tricky,” said Brad Hahn, spokesman for the comptroller’s office. “When you move somebody to the front of the line, you’re pushing someone else to the back of the line.”

Payments that get prioritized are usually exceptions, he said.

And, as PARC learned, it had to use up its cash reserves and exhaust its borrowing power before it was eligible to even apply for expedited payments.

“We applied for expedited payments in December, and we received three payments in January,” said Kristen Berchtold, PARC’s vice president of development. “With that we were able to pay off a $950,000 line of credit.”

That was money PARC had borrowed to make ends meet because of the state’s payment delays. As of Jan. 31, the agency was still waiting on $2.1 million in back payments.

“It’s kind of a vicious cycle,” said Berchtold, who suspects the agency may have to start borrowing again to become eligible for speedier payments.

Certain vendors can also apply for the state’s vendor payment program, which allows a state-approved third party to buy vendors’ accounts receivables upfront, shifting the state’s unpaid bills to a private company in a better position to wait for payment.

6 months to a year

Since October, Illinois has amassed 171,009 unpaid bills totaling more than $6.5 billion, according to the comptroller’s office.

While it’s not uncommon for vendors to wait six months to a year for reimbursements from the state, Heartland typically receives reimbursements within two months. according to Heartland accountant Nancy Neel.

The Illinois Department of Healthcare and Family Services prioritizes Medicaid reimbursements to federally qualified community health centers such as Heartland because Medicaid is their primary source of revenue, said Jill Hayden, vice president of public policy for the Illinois Primary Healthcare Association. Federal Medicaid funding also requires timely reimbursement rates.

Yellow Checker had been eligible for expedited payments for transporting Medicaid patients until recently, when, according to DHFS, its revenues from Medicaid fell below 50 percent.

Without expedited payments, the taxicab company’s wait for reimbursements would have gone from about 90 days to six to nine months.

“It was costly for us to do business with the state,” said John Franks III of Yellow Checker, “then to not get paid on a regular basis was the straw that broke the camel’s back.”

Pam Adams can be reached at 686-3245 or padams@pjstar.com. Follow her on Twitter @padamspam.