As part of an omnibus Medicaid reform bill that passed the Illinois General Assembly last summer, legislators signed off on a two-year, $76.8 million contract to privatize Medicaid redeterminations. The state sought to hire a company experienced in working with welfare systems nationwide that could quickly review the rolls and remove recipients who are ineligible for Medicaid, saving the state money while doing it.
But the contract between Maximus Health Services and the State of Illinois came under fire from the start. Maximus, a Virginia company, has had a spotty record of working on welfare programs across the country for more than a decade that includes wrongly billing the State of Wisconsin and a decline in services that led Indiana to cut short its contract.
Critics have questioned whether the company would have a profit motive to remove people from the rolls, so that it could win continuing contracts by showing high numbers of removals from the rolls. In July 2012, the state workers union filed a grievance arguing that Illinois was paying Maximus millions of dollars to do the job of state workers.
Earlier this month, an arbitrator found in favor of the union’s complaint. In a June 20 decision, the arbitrator, Edwin H. Benn, said the state had violated its contract with the American Federation of State, County and Municipal Employees. Benn was also the fact finder in the Chicago Public Schools’ dispute with the Chicago Teachers Union leading up to the 2012 teacher’s strike.
Benn’s report on Maximus noted that, if the Illinois Department of Human Services or the Illinois Department of Healthcare and Family Services, the state agencies working on Medicaid, planned to contract out work regularly done by state workers, they first needed to offer the union a chance to come up with an alternative staffing solution.
The arbitrator’s findings are binding, unless the state chooses to appeal. Benn gave the state until Dec. 31 to cancel the Maximus contract. Kelly Jakubek, communication manager at the Illinois Department of Healthcare and Family Services, said the state is still considering whether it will appeal.
For the union, the contract can’t end quickly enough. If the Maximus contract is a violation of their contract, the union argues, why not end it now?
Maximus has already been paid $10.6 million under the contract, Jakubek said. Of 177,294 individual cases Maximus considered for redeterminations between Jan. 1, 2013, and July 15, 2013, it recommended that 51.9 percent be removed from Medicaid, according to the Department of Human Services’ year-to-date report on the Maximus recommendations and results. Caseworkers then signed off on removing 29.7 percent of the 177,294 cases—representing more than 50,000 people--from Medicaid. Some of the cases suggested for removal by Maximus are still undergoing review by caseworkers, while other cases have been cleared to continue.
Maximus’ role is to research whether each individual receiving Medicaid has the correct income allowance or still lives in the state. Maximus then makes a recommendation to keep, change or remove the client’s Medicaid status, which is passed on electronically to a caseworker and supervisor, who decide whether to confirm each recommendation.
But the reality on the ground can be trickier, said Elijah Edwards, an American Federation of State, County and Municipal Employees member and intake caseworker at the Department of Human Services office on Chicago’s Near West Side.
For example, 13 percent of recipients were removed from Medicaid so far this year because Maximus wasn’t able to locate them, according to a June 18 editorial by The Chicago Tribune.
But Medicaid patients can be hard to reach for a variety of reasons, Edwards said. A caseworker who is familiar with a client may know that if an individual can’t be reached by phone, it may because he or she has hearing problems. Or if someone doesn’t reply to a letter, that person might be hospitalized, Edwards noted.
And in many cases, Maximus is duplicating the research already done by caseworkers, Edwards said. Caseworkers, who carry an average caseload of 1,600 clients, rarely have time to adequately review recommendations made by Maximus, he added.
Edwards said he knew of several Medicaid clients who were removed from the rolls by Maximus and were then reinstated within 60 days, creating even more work for the caseworkers.
The Chicago Tribune bemoaned that the union is getting in the way of a “big savings program.”
“This vital scrub of Medicaid is in jeopardy, thanks to a grievance filed by AFSCME, the state employees union. … This screening experience should remind lawmakers of how much waste is baked into the Medicaid program,” the Tribune wrote.
But in a cost analysis submitted to the arbitrator, the union estimated that the waste was on the part of the Maximus contract. The state could have saved more than $18.1 million by keeping Medicaid redeterminations in-house, the union found. The American Federation of State, County and Municipal Employees is asking that the state begin phasing out the contract immediately and hire additional state workers to do the redeterminations.
Officials from Department of Healthcare and Family Services, Department of Human Services and the governor’s office did not answer repeated requests to comment directly on AFSCME’s concerns. Under contract stipulations, Illinois officials answered questions about the contract on behalf of Maximus.
Edwards is among those who hope to see the contract end sooner rather than later. “The people employed by Maximus work for Maximus, not for the people of Illinois,” he said.