A federal judge on Friday ordered the state of Illinois to increase the amount of money it pays toward Medicaid bills every month and an additional $1 billion during the next year.
The order by U.S. District Judge Joan Lefkow came after lawyers representing Medicaid patients and attorneys for the state were unable to agree on a plan to pay down a $3 billion backlog owed to health care providers. Illinois is entering a third year without a budget.
Lefkow ordered the state to pay $586 million a month for Medicaid vouchers that come in after June 30, and pay down past due bills the state has received from managed care organizations.
Earlier in June, Lefkow ruled Illinois wasn't complying with court orders to pay health care bills for low-income and other vulnerable groups.
Comptroller Susana Mendoza says the ruling would cause her to likely cut payments to pension funds, state payroll or local governments. She said payments to bond holders won't be interrupted.
"As if the governor and legislators needed any more reason to compromise and settle on a comprehensive budget plan immediately, Friday's ruling by the U.S. District Court takes the state's finances from horrific to catastrophic," Mendoza said in a statement. "A comprehensive budget plan must be passed immediately."
In negotiations with lawyers representing Medicaid patients, Mendoza's office offered to pay an additional $150 million per month, but the plaintiffs rejected it, saying it wasn't enough.
Illinois' fiscal morass is the longest of any state since at least the Great Depression, with Illinois ringing up a $6.2 billion annual deficit and a $14.7 billion stack of past-due bills.
Lefkow decided after recent hearings it was reasonable for Medicaid providers to expect their bills to be paid. She if the bills weren't paid in full, then enough should be paid to maintain patients' access to care.