Tuesday, July 31, 2012

Quinn adviser sees "serious problems" with how DHS handled abuse and neglect allegations

By Jamey Dunn

A House panel took members of Gov. Pat Quinn’s administration to task today over recent reports that the Illinois Department of Human Services did not follow up on allegations of abuse and neglect after the deaths of several developmentally disabled adults.

The Belleville News-Democrat reported in June that the DHS inspector general, who is tasked with looking into reports of neglect, was not pursuing complaints after the alleged victims had died. The agency reportedly deemed those who had died “ineligible for service.” The paper found 53 deaths since 2003 that the department did not investigate or list in its annual report. In most cases, the individuals were brought into the hospital near death, and health care professionals raised the possibility of potential abuse or neglect, but the patient died before an investigation began.

 “We’re here today for a particularly sad reason because our state failed to detect abuse and neglect of adults with disabilities. We failed to adequately investigate complaints and failed to protect those who were abused and failed to help bring their abusers to justice,” said Rep. Greg Harris, chair of the House Human Services Committee. “Fifty-three deaths occurred, and there were none, no, absolutely zero felony convictions for that abuse and neglect. ... These men and women passed away and suffered in very horrible ways.” Harris described some of the conditions the disabled adults had faced as “living in filth” and “covered in bedsores.” He said that some had “become emaciated skeletons.” Some “might have been saved if the system had performed batter or even had responded at all to their appalling circumstances instead of parsing legal language,” Harris said.

Michael Gelder, Quinn’s senior adviser on health policy, agreed that there were “serious problems” and “deficiencies” with the way the inspector general’s office handled the cases. “We can’t undo what’s been done, but we can do better,” he told the committee at the Chicago hearing. “The gaps and mistakes in our system are deplorable, and the governor responded as quickly as he could.” He added, “I think that there’s no question that certain job responsibilities were not fulfilled.”

Since the report, Quinn has restructured the inspector general’s office and issued an executive order meant to address the problems. Former inspector general William Davis' resignation becomes effective on Aug. 1. Quinn named Daniel Dyslin as acting inspector general for DHS. Dyslin previously served as senior deputy general council at the department. Quinn also appointed Michael McCotter, who has a background in law enforcement, as a special investigator for the office. McCotter is tasked with looking into the cases that the department failed to investigate previously.

DHS Secretary Michelle Saddler said that the inspector general’s office refers such cases to local law enforcement authority. However, she said the office lacked the proper documentation to prove that all of the cases in questions had been referred. “When a person passes away before we can complete or even initiate an investigation, we appropriately refer these results to local law enforcement agencies,” she told the committee. “But as the days progressed, we found that we had inadequately documented our referrals to law enforcement authorities, and in fact, there was no evidence in many cases of our having made those referrals.” She added that the department made a “very poor choice of words” when it declared the deceased “ineligible for services” in its paperwork. She said the decision “raised concerns about our commitment to adults with disabilities.”

The executive order requires the department to refer suspect cases of neglect or abuse when the alleged victim dies to local law enforcement, to document the referral and to follow up with law enforcement to see what action was taken. “The executive order [and] the investigative team will allow us not only to look back and find out exactly what went wrong but also begin that conversation of how we can make this a better system with the resources we have.”

Rep. Mary Flowers said DHS bears the responsibility for abuse cases slipping through the cracks. “The law is the law, and your agency failed to protect the people,” she said. “It is not about the police. It is about your agency failing to do what it’s supposed to do." Flowers, a Democrat from Chicago, argued that low staffing numbers set the office up for a fall. “This program was doomed for failure from the very beginning,” she said.

Saddler said that the DHS inspector general’s office only has five investigators and one supervisor who handle reports of potential abuse or neglect. However, she said the department is working to find solutions without adding staff. “The reality that all of us are dealing with at each of our levels is that there are only a certain number of resources to go around. There were a tremendous number of unspeakably difficult decisions that were made at every single level of the budget process.”

Rep. Sandy Cole, a Republican from Grayslake, said that budget cuts are no excuse for the department’s shortfalls. “I’m kind of amazed at how we are equating incompetence with the fact that the state has a budget crisis. I found that [to be] such a scapegoat.”

Both Saddler and Gelder agreed that streamlining the process for reporting abuse — regardless if the victim is developmentally disabled, a child or elderly — might help make the system function more smoothly. They noted that many of the calls that come into the DHS hot line for reporting neglect or abuse of the developmentally disabled are not for cases covered by the department. They are instead cases that involve children or the elderly, or they are reports of suspected fraud in programs, such as Medicaid. “If we seriously consider combining these hot lines, we would be doing the public a great service so there wouldn’t be a wrong number,” Gelder said. According to Saddler, the DHS hot line received 1,438 calls in Fiscal Year 2011.

Ann Spillane, chief of staff for Attorney General Lisa Madigan, suggested setting up training programs specific to investigating abuse and neglect allegations for local law enforcement units. “We want to make sure that local law enforcement feel like they’re supported in this effort.” She said local police should also be connected to experts in their area for assistance.

Lawmakers argued that the intent of the law was clear, and they felt that the inspector general disregarded that intent, but they also said that it may be time to rewrite the statute in a way that leaves no room for confusion and considers the needs of the developmentally disabled and those who would utilize the system to report neglect and abuse cases. While some proposed sweeping changes, such as the merger of functions across agencies, others suggested smaller ideas, such as putting the abuse hot line number on the homepage of the DHS website. “We really need to look at the consumer as we design these systems,” Harris said.

Monday, July 30, 2012

Quinn calls special session with no deal reached on pensions

By Jamey Dunn

Gov. Pat Quinn has called the General Assembly back into session to address pension reform, but it seems that legislative leaders are no closer to reaching an agreement.

Quinn announced today that lawmakers would be required to return to Springfield on Aug. 17. The Illinois House is already scheduled to be in session that day to vote on a recommendation from a disciplinary committee to eject Rep. Derrick Smith from its ranks. Smith is accused of taking a $7,000 bribe in exchange for helping a business seeking a state grant.

Quinn called on lawmakers to pass pension reform legislation this year, but negotiations fell apart in the final days of the regular spring session. Democrats argued that downstate and suburban schools, state universities and community colleges should pick up more of the cost of their employees’ retirement benefits. Chicago schools already pay most of their employee retirement benefits. Democrats argue that because districts are setting the pay upon which benefits are based, they should not be able to pass the pension bill off to the state. But Republicans said that shifting the costs to local districts when state funding to schools is also being cut would lead to layoffs and local property tax increases.

The governor made the special session announcement today when he addressed the City Club of Chicago. “We’ve accommodated repeated requests for study and analysis, and it’s pretty clear that the school districts of Illinois can have a stake in their own pensions. This is not a good situation, where a school district can negotiate a contract with its employees, then shift the retirement costs over to taxpayers who did not have a seat at the table. It’s about accountability,” Quinn told the Chicago-Sun Times. “We must have a system that’s accountable, and that’s what we’re going to have, and we’re going to get it done on Aug. 17.”

Talks among the four legislative leaders reached a standstill earlier this summer when no agreement on the issue was found, and it would appear that nothing has changed since those negotiations stalled out. “I’m not aware that there’s been any more progress in terms of conversation between leaders,” said Northbrook Democratic Rep. Elaine Nekritz, who was the representative for the House Democrats on a pension reform working group. She said that at this point, trying to predict what, if anything, the special session might produce would be pure “speculation.” Nekritz told the Daily Herald earlier this summer that she thought it was likely that pension reform would not pass until after the general election in November. When asked whether leaders were any closer to reaching an agreement, Steve Brown, spokesperson for House Speaker Michael Madigan said, “I’m not aware of anything.”

Republican leaders took a positive tone when reacting to Quinn’s announcement. “We are encouraged by the governor’s call for a special session on pension reform on Aug. 17. As many people know, we have been and continue to be supportive of comprehensive pension reform that solves the major crisis facing us today. The time to act has been upon us,” said a prepared statement from House Minority Leader Tom Cross and Senate Minority Leader Christine Radogno. “We are continuing to encourage Gov. Quinn to take a leadership role to get a comprehensive pension bill passed in the General Assembly. We will continue to be available to discuss this very important matter in the coming weeks.”

There are a few pension proposals out there that lawmakers could take up. Senate Bill 1673 would have shifted costs to schools, universities and community colleges. After it became clear that Republicans would not support that plan, Madigan turned control of the bill over to Cross, who added amendments to remove the cost shift. Also, the Senate passed House Bill 1447, which would reduce benefits for state employees and legislators only. The measure avoids the controversial topic of who would pay for school benefits. However, both bills have immediate effective dates so, they would require the approval of a three-fifths majority or amendments to change the effective dates. If the effective dates are changed, the earliest the legislation could become law is next June 1.

It is unclear whether House Republicans could get behind a plan -- or whether Quinn would sign it -- that only covers state workers and legislators and does not address the pension systems for teachers and university employees. According to Quinn’s budget office, those systems would account for the bulk of pension costs for 2013. Multiple attempts to contact Quinn's office for comment were not returned. The announcement for the special session also mentions Quinn’s plan, which was never drafted into bill form.

Meanwhile, Senate President John Cullerton is urging Quinn to call off the special session. He has volunteered to call back his members on August 17th in order to cut costs associated with a special session. “I share the governor's interest in resolving the lingering pension issues, but it makes no sense to spend thousands of taxpayer dollars when there is an easy, no-cost alternative,” Cullerton said in a prepared statement. He estimates that the cost of one day of special session would be about $40,000. If the Senate returns voluntarily, some travel costs would not be covered by taxpayers.

Wednesday, July 25, 2012

More children living in poverty in Illinois and nationwide

By Jamey Dunn

While the number of children living in poverty in Illinois has increased in recent years, the state saw improvements in education and health care, according to a new study that seeks to measure the quality of life of children across the country.

The 2012 KIDS COUNT Data Book from the Annie E. Casey Foundation looked at four categories: health, education, economic well-being and family and community factors. Overall, Illinois ranked 21st out of 50 states, which is an improvement over the state's 27th ranking in 2011. According to the study, Illinois generally followed national trends, which showed improvement in some areas of education and health while economic security and positive factors at home and in the community slipped. According to the study, the number of children living in poverty in America has increased from 12.2 million in 2000 to more than 15.7 million in 2010. “Unlike the domains of education and health, where children are benefiting from long-term progress overall, the economic well-being of children and families has plummeted because of the recession,” the report said.

Of the more than 15.7 million kids living in poverty in 2010, 600,000 were in Illinois, and the state ranked 27th in the category for economic well-being. In 2010, 19 percent of Illinois children were living in poverty, this is an increase from 16 percent in 2005 but below the national average for 2010, which is 22 percent. Job security for families also appeared to be slipping in the state, with 32 percent of children living with parents who lacked job security. That has increased from 26 percent in 2005.

Illinois ranked fourth among the states in health insurance coverage for children in 2010. Only 4 percent of children in the state went without coverage, compared with 8 percent nationally. However, that still meant that 140,000 Illinois children were without health insurance in 2010. Illinois ranked 14th in overall child health and has improved since 2005 in all health related areas measured by the study.

But Illinois child advocates worry that recent cuts to the Medicaid program may cause a backslide in the state’s progress. Larry Joseph, director of the Fiscal Policy Center at Voices for Illinois Children, said that none of the Medicaid changes would directly effect children's eligibility on a "broad scale." However, he said there is concern that new focus on verifying eligibility for the program through information contained in databases could lead to children losing coverage when they are actually still eligible for it. “One of the concerns that we have is that in any database there’s a certain error rate. So how this is implemented is going to be very important. We don’t want kids—or anyone else for that matter—to be removed from Medicaid enrollment because there was a data error somewhere. So it’s important that there be safeguards,” he said. “Let’s say there’s a 2 percent error rate, well that could be thousands of kids who are wrongly removed from the rolls.” He also said that new limits on prescription drugs may make it difficult for some children to get needed medication. “The kids that have multiple medications are usually kids with special health care needs.” 

According to the report, Illinois also made some gains in education. Fewer children missed out on preschool. Between 2005 and 2007, half of Illinois children at preschool age were not in school. Between 2008 and 2010, 48 percent of Illinois kids at preschool age, or 153,000, did not attend preschool. Nationally, 53 percent of children did not go to preschool over the same time period. However, Joseph said that if the study had looked at more recent data, which reflects cuts to state funded preschool, Illinois would have received a lower ranking. "Illinois had become a leader in early childhood education,” said Gaylord Gieseke, president of Voices for Illinois Children. “It’s unfortunate that progress has been eroding, especially since we know that children who receive support early have a greater chance of success in school, at work, and throughout their lives. Investing in kids makes sense from both social and fiscal perspectives."

While some areas of education, such as reading and math proficiency, showed improvement in the report, the number of Illinois kids who do not graduate from high school on time is up by 10 percent from the 2005 to 2006 school year.

Illinois was ranked 28th on family and community factors. In 2010, 989,000 children were living in single-parent households, which is a 10 percent increase from 2005. The number of children living in areas that have high poverty rates was 304,000, an increase of 25 percent since 2000. “We know that children who grow up in concentrated poverty, regardless of their family's income, are more likely to experience harmful levels of stress, more likely to struggle in school, and less likely to achieve economic success as adults,” Gieseke said. 

Patrick McCarthy, president and chief operating officer of the Annie E. Casey Foundation, described in the report what he thinks kids need to succeed. “We know what it takes for children to thrive and to become successful adults. We have reams of research and data identifying the best predictors of success: getting a healthy start at birth and maintaining healthy development in the early years; being raised by two married parents; having adequate family income; doing well in school, graduating high school and completing post-secondary education or training; avoiding teen pregnancy and substance abuse; staying out of trouble; and becoming connected to work and opportunity.”

He also warned that many children are not getting those resources. “Millions of American children are growing up with risk factors that predict that they will not succeed in the world they will inherit. And if they don’t succeed, this country will become increasingly less able to compete and thrive in the global economy, thereby affecting the standard of living and the strength of our nation for all of us.”

Monday, July 23, 2012

Quinn signs ban on Cook County landfills

By Jamey Dunn

A battle over the expansion of a landfill on Chicago’s southeast side may be put to rest after Gov. Pat Quinn signed a bill banning new landfills in Cook County.

In 1984, the city of Chicago enacted a moratorium on creating new landfills or expanding existing ones. However, Land and Lakes Co. planned to annex a piece of the city into nearby Dolton, which does not have such a ban. The company planned to start dumping on the land to keep its site, called River Bend, from shutting down. River Bend is expected to reach capacity by 2014.

But opponents of the expansion pushed for a countywide ban, which with the governor’s signature, is now in effect. “This is a community victory. This is an environmental and health victory. This is showing that democracy can work for everyday people,” Quinn said at a Chicago bill signing.

Neighborhoods on the southeast side have dealt with high levels of pollution for decades. The area was home to several steel mills and industrial operations, and according to a 2001 city land use plan, about 835 acres of the southeast side are covered in landfills. Advocates point to the area as an example that minorities and those in low-income areas often bear a disproportionately high amount of the nation’s pollution. “This is victory. We can breathe. We can look at today and say that we can do environmental restoration in our community. No more landfills in Cook County. That’s a great thing,” said Cheryl Johnson, executive director of People for Community Recovery. “We have to begin to learn how to clean up what we messed up. And it’s going to take a process. But today we are establishing that baseline for equal environmental protection.” Johnson’s mother, Hazel Johnson, founded People for Community Recovery and is known as the mother of the environmental justice movement.

Chicago Democratic Sen. Donne Trotter noted the improvements that have been made in the area since local residents began organizing to clean up their community. “It is not going to go back to the way it was — not to when we were growing up 40 [or] 50 years ago, when seeing smoke and smelling garbage meant you were home. Those days are gone. We have fought for a new life ... a quality of life that [means] our children will be able to enjoy this land [and] be able to enjoy all the great things that this land has to offer.”

However, Land and Lakes argues that the expansion could occur without harming the environmental progress that has been made in the area. The company says that under the ban, other environmental upgrades that would come along with the expansion would be lost. “Land and Lakes operates a landfill in Dolton, which is adjacent to our other landfill, which reached capacity and closed in 1995. Our vision is to connect the two facilities, bring the dormant facility up to current, stricter environmental standards, create open lands with habitat restoration, all while generating low-cost renewable energy and properly managing the waste disposal needs of the area. This is about as green a project as they come,” Mary Margaret Cowhey, chief executive officer of Land and Lakes, told a Senate committee in May.

She added: “To place a blanket elimination on EPA permits in Cook County kills deserving projects. This bill is overkill based on fear.

Land and Lakes did not respond to requests for a statement on the signing of the bill, but a statement released when the legislation passed said: “The bill guarantees that a closed landfill in Chicago will remain a brownfield for generations to come. The bill means there is no opportunity for Land and Lakes to add environmental upgrades and develop green amenities consistent with what south-side residents want over the long term.” The company argues that the ban would also hurt local economic development by eliminating local jobs and potential tax revenues.

Oak Park Democratic Sen. Don Harmon, a sponsor of House Bill 3881, said that business growth should not be the only priority for lawmakers. “Down in the pressure cooker of Springfield, it was very easy to fall into the trap of talking about business. Is this bill going to help someone’s business? Is this bill going to hurt someone’s business? And business is important, but it’s not the only thing we need to be thinking about. It’s quality of life and our neighborhoods,” he said. “Cook County is simply too dense to sustain any new landfill development, and the residual consequences of all the landfills we have are going to cause us problems for a long time.”

 Quinn took the opportunity to tout the Millennium Reserve project, which has the goal of restoring 140,000 acres of land in the area and increasing recreation in the Lake Calumet region. The state has invested almost $18 million in the project so far. “This will basically be the largest conservation area in an urban environment in the whole United States, and we have work to do, obviously. This area for many, many years was dumped upon,” he said.

 Marc Miller, director of the Illinois Department of Natural Resources, said the project focuses on the area south of the Chicago River and extends beyond the Calumet River, with the Calumet area as its core. “For the first time in 100 years, we have a record of a bald eagle nest here in the Calumet [area],” Miller said. “And that shows you what is possible when you let nature heal itself once you get the pollutants and the bad things out of it.”

For more on the environmental history of the southeast side and the battle over land fill expansion, see the current Illinois Issues. 

Thursday, July 19, 2012

Committee recommends expelling Smith from House

By Jamey Dunn

A disciplinary committee recommend today that Chicago Democratic Rep. Derrick Smith be booted from his seat in the Illinois House.

Smith stands accused of accepting a bribe for providing helping a day care in seeking a state grant. Smith was the subject of a federal sting, and the day care was not actually applying for a grant. Smith faces a criminal trial, but first, he will likely face a vote to kick him out of the House.

The committee voted unanimously to find Smith “at fault.” However, Rep. Al Riley was the only vote in opposition of expelling Smith from the House. Riley could not be reached for comment. “I felt, especially with an election coming up, the people of the district would be better served to make a determination on whether Derrick Smith was the person who should represent them in Springfield. My view was that the penalty should be harsh but something less than expulsion,” Riley told reporters in Chicago.

Smith’s lawyer, Victor Henderson, had argued that it was unfair to remove a sitting legislator based on accusations that have not yet been confirmed. “We're not saying don’t make a decision. What we’re saying is, get the information, get all of it, and then decide.” Henderson complained that the process moved too quickly “What’s the rush? There shouldn’t be a rush? We haven’t heard any explanation about why this process has to go as fast as it is.”

But Skokie Democratic Rep. Lou Lang, who argued against Henderson before the committee, pointed out that the burden of proof in the process is not the same as in a criminal trial. Lang said lawmakers were not convicting Smith but simply deciding whether he is fit to serve. “We have a duty to the institution we were all elected to,” he said. Both Lang and Western Springs Republican Rep. Jim Durkin, who also argued the case against Smith, hit hard on the fact that Smith previously refused to answer questions under oath and did not appear at the hearing today. “He isn’t here today. I want you to look at that empty chair during the course of these proceedings and remember that,” Durkin said during his opening argument.

After hearing the arguments, the committee deliberated for more than two hours. “There was, I think, a very vibrant discussion based upon the arguments presented by both sides,” said Mahomet Rep. Chapin Rose, the top Republican on the committee. The committee’s recommendation will now go before the full House. A two-thirds majority is required to expel Smith.

“It’s with a heavy heart that we take this action today,” said Chicago Democratic Rep. Barbara Flynn Currie, the chair of the committee. I think I speak for each and every one of us when I say that it is a sad day for us and a very sad day for the Illinois House of Representatives. Not one of us takes any joy in sitting in judgment of our colleagues.”

Currie told reporters that the House would likely vote on Smith’s fate before the November elections, saying there was no reason to “drag this out.”

“I suspect it will be sooner rather than later,” Steve Brown, spokesman for House Speaker Michael Madigan, said of the vote by the full House. Brown said the committee still has to draft a report on its recommendation, but he said he thinks the House will take a vote before the veto session, which is scheduled for November. UPDATE: Madigan has announced one day of session on August 17.

House disciplinary panel to make recommendation on Rep. Smith

By Jamey Dunn

The committee charged with deciding whether to recommend expelling Rep. Derrick Smith from the Illinois House could have a decision as early as this afternoon.

 Smith, a Chicago Democrat, is accused of accepting a $7,000 bribe to assist a day care center with getting a state grant from the Illinois Capitol Development Board. However, Smith was the target of a federal sting, and the day care was not actually seeking the grant.

This morning, a House disciplinary committee heard arguments from Smith’s lawyer, Victor Henderson, and Skokie Democratic Rep. Lou Lang and Western Springs Republican Rep. Jim Durkin, who were tasked with making the case against Smith.

Henderson argued that the process was rushed and that the committee should not make its decision until it had access to more information, such as audio recordings and testimony from government agents and an unnamed government informant. “This is bigger than Derrick Smith. To me, this is really about democracy and democracy in action, and either we believe in democracy or we don’t,” Henderson said at the Chicago hearing. According to the criminal complaint against Smith, a government informant brokered the deal between the representative and the day care center and delivered the bribe money to Smith. Henderson argued that the informant has a criminal record and is not a reliable source of information. “I think there’s a difference between having a nun saying somebody did something wrong versus a con man.”

He accused the committee of acting on allegations against Smith without any evidence that the legislator did something wrong. “Do you want all of the important information about this matter or do you not?” Henderson asked the committee. “He wants the whole truth out. Not just bits and pieces of it. ... Rep. Smith is not afraid of the truth. He can handle the truth.”

Lang and Durkin argued that if Smith, who did not attend the hearing today, was interested in getting the truth out; he could have told his side of the story to the committee. “Mr. Smith, did you accept the $7,000 bribe?” Lang asked an empty chair, where presumably Smith would have sat if he were in attendance. “Do you hear the silence?”

Lang said that in all of the House proceedings, neither Smith nor Henderson have denied the allegations against Smith. But Henderson rebutted that Smith has pleaded not guilty in criminal court. “He has denied the core allegations of the criminal charge and pled not guilty.”

Henderson called on the committee to slow down the process and give him time to try to get more evidence out of federal prosecutors for use at the hearings. So far, prosecutors have denied requests to release evidence. “I’m just asking for you to do the right thing — on behalf of the representative — which is to hear all of the evidence and then decide. And I would submit as to this point in time, other than some allegations by an FBI agent, you have nothing.”

 However, several of the committee members indicated that testimony from Smith would be the most telling evidence in their eyes. “Isn’t the best evidence Mr. Smith being here saying: 'I didn’t do this. Ask me whatever question you want. I’m going to tell you the truth?'” Asked Rep. Sidney Mathias, a Buffalo Grove Republican.

The committee members have gone into deliberation. If they recommend that Smith be expelled from his seat, their recommendation will go to the full House for a vote. A two-thirds majority must vote in favor of expelling Smith for him to lose his seat. Rep. Chicago Democratic Rep. Barbara Flynn Currie, chairwoman of the committee, said the group could return with its decision as early as this afternoon or tomorrow.

Wednesday, July 18, 2012

Advocates say they were left out of talks on nursing home staffing levels

By Jamey Dunn

Changes to the state’s Medicaid program, which Gov. Pat Quinn recently signed into law, were heralded as historic reform and are expected to shave billions off the state’s liability under the program. But the sweeping plan also attempts to resolve some longstanding disputes over health care policy in Illinois. This is part two in a two-part series that looks at those components of the new law. (Part one is here.)

Advocates say they were cut out of the process to determine nursing home staffing level requirements after the issue was pulled into negotiations over the Medicaid legislation.

There was some debate over staffing requirements included in sweeping nursing home reform passed in 2010, and the Joint Committee on Administrative Rules (JCAR) took up the issue this spring.

The reforms were spurred by investigations by the Chicago Tribune and The Chicago Reporter, which revealed neglect in the state’s nursing homes. The Tribune focused on the violent results when younger mentally ill patients were housed with older residents and adequate supervision was not supplied. The Reporter focused on the disparity of care between nursing home that served predominantly black and Hispanic residents compared with those that housed mostly white residents.

When looking at both issues, lawmakers agreed that increasing staffing levels and more hands-on care would help to address some of the problems. So, requirements for how much direct care each patient must receive were increased under the 2010 legislation, but a disagreement broke out in the industry over who must provide such direct care — registered nurses or lesser-trained and generally less-expensive caregivers. It was left to JCAR to decide.

The law requires that patients receive 3.8 hours of direct care each day by 2014. Patient advocates were pushing for 20 percent of that care to be provided by RNs. But many in the industry argued that such requirements would be too costly for some nursing homes, and licensed practical nurses or certified nursing assistants would not provide any lower quality of care.

Negotiations stalled, and JCAR postponed voting on the issue. “We were going through what I thought we’re honest negations. Negotiating in good faith,” said Chicago Democratic Sen. Jacqueline Collins. She said the advocates were pushing for 20 percent of direct care to be provided by RNs, while the industry was pushing for 10 percent. She said if negotiations had continued, it was likely that the two groups might have met in the middle at 15 percent. However, they never got the chance to haggle it out because the decision was made at a different table, where the negotiations over Medicaid reforms were taking place. And the advocates were not invited to pull up a chair.

“When it came time to actually move on rule-making process, the rug was pulled from under those advocates who had believed that, in fact, we could have addressed the issue though rule making,” Collins said. Senate Bill 2840, which Gov. Pat Quinn signed into law, sets the requirement that 10 percent of the direct care be provided by a registered nurse. Under the new law, 25 percent of direct care must be provided by licensed nurse.

David Vinkler, associate state director for AARP Illinois, said that those involved in hashing out the nursing care requirements had decided to hold off and revisit the issue after the state budget was finished. But he said he and others were surprised when they found the Medicaid reform legislation contained a provision for staffing levels. "Then we found in the Medicaid bill a piece of language that decided this on its own,” he said. “In our mind, [it] really kind of violated the spirit of the negotiations that we had.”

He added, “We know there were no [nursing home] resident advocates in that decisions making process.”

Sen. Heather Steans, who sponsored both the nursing home reform legislation and SB2840, said that it is unlikely that JCAR would have approved the 20 percent requirement. Still, she said that advocates should not have been left out of the talks that produced the final product. “I think they should have been included.” s

Vinkler said that while the 10 percent staffing level is disappointing, it is the future that lies beyond it that troubles him most. After 2014, nursing homes will be reimbursed under a new system called RUGs, which takes into account the complexity of care needed by residents. Care for patients with greater needs would bring in more money in reimbursements. The new system was part of Medicaid reforms. Steans said the new system would “incentivize” nursing homes to care for more traditional elderly patients, instead of receiving the same funding to take on younger patients who might need less daily care. “Giving the same amount of money, regardless to the level of need of the patient. ... it’s just not sensible.”

However, after the new system goes into effect, staffing levels would also be tied to the level of care patients need, leaving no strict minimums across the board. Vinkler said this could result in a situation that is confusing for patients and their families. “Staffing is one of the biggest indicator of quality of care,” he said. “As a consumer, are you going to be able to figure out: ‘What [care] should I be getting?’ If you are not getting the minimum, how would you know?”

Kirk Riva — vice president of public policy for Life Services Network, which represents non-profit nursing homes throughout the state — said nobody knows exactly what staffing requirements will look like under the new system, but his organization supports the changes to reimbursement. “Clearly, there are homes in the state that are not staffed at the levels they should be,” he said “Certainly, you’ve got to have some standards. There’s no questions about it.” But he said there is still time to work out the details. “I think it’s safe to say there’s going to still be a lot of negotiations going on.”

Pat Comstock — executive director of the Health Care Council of Illinois, which represents for-profit nursing homes — said that staffing levels will be determined by the needs of residents, which is all a part of the new system that focuses on individual care. “Over the next 18 months, we will be working with the Department of Healthcare and Family Services on structuring the new [reimbursement] program, and as that process goes forward, a part of that process will be determining the care needs of the resident, and the staffing needs will follow.”

Vinkler said he doubts the state’s ability to keep track of requirements that are not uniform across every facility."We have serious questions about whether the Department of Public Health will be able to do that," he said. “Especially in Illinois, where we have had a history of really poor care, you have to have a minimum.”

Comstock said there is no reason for concern because the new system will still set staffing requirements that would be tailored to each resident’s needs. “I don’t understand their worry because the RUGs program will make it pretty clear, based upon the condition of the resident, what kind of staffing requirements they need.” She noted that 22 other states have a RUGs program, and while there are small differences between them, they are all based on nationally recognized standards. “One of the reasons why there was a push to go to RUGs was so that Illinois became a part of what the other states are doing and part of a national standard.”

 But Vinkler said he thinks legislators and Quinn’s administration traded off on the staffing levels to get for-profit nursing homes to agree to the new reimbursement plan. “That was the give to get the nursing homes to switch to that payment method.”

Steans said it was all part of trying to negotiate changes that are sweeping and generally positive for health care in the state. “Two big things that had to happen are reforming the way that nursing homes and hospitals get reimbursed. Those are things that had to happen to enable other changes to occur,” she said. She said it would have been difficult to get the nursing homes to agree a new reimbursement system without the give and take of negotiations over the Medicaid legislation. “The nursing homes are a powerful lobbying group.”

Comstock said her organization was asked to present ideas to lawmakers as part of negotiations over Medicaid reform because it represents nursing homes that care for the “vast majority” of Medicaid patients. She said that lawmakers working on the legislation heard comments from hundreds of groups. “So anybody that wanted to voice their opinion about what should be done certainly had the opportunity to do so on many levels.”

Steans said, “Big picture, what happens to nursing homes is still a huge step forward.”

Comstock agreed that the changes in the bill could potentially be positive. But she said the most important factor in whether the transition to RUGs is successful would be funding levels. “It depends on whether the state is prepared to fund the care requirements that are established under RUGs.” Illinois currently has some of the lowest Medicaid reimbursement rates in the nations. "We’re providing the same care that folks do in other states for far less money," Comstock said.

Collins said she worries that the changes ahead will not solve the racial inequity of care that affects many people she represents. “I worry about the problem that has not been resolved, which is the staffing disparity. ... The patients at majority-white homes often had care from RNs, while those in black-only homes got care from [licensed practical nurses],” she said. “My intention is to revisit the issue because the problem I’m facing in my district has not been resolved.”

Steans said that once the new system is in place, nursing homes should be required to publish and post their staffing requirements so patients know if they are receiving the required care. She said she is going to try to find a way to work out such a provision in the rule-making process concerning the Medicaid changes. If not, she said she might try to push a bill with such transparency measures. “Those staff requirements should get published, and they should be posted, and they should be put online.”

Transparency aside, Vinkler said that the staffing requirements, which could be confusing and difficult to enforce, are not in the best interests of nursing home residents. “It’s very telling when a policy comes out that is the product of solely the industry and policy makers, as opposed to consumers of that service. It is probably not the best policy for consumers.”

Tuesday, July 17, 2012

Study finds states struggling at recovery

By Jamey Dunn

A new study on struggling state budgets found that the recent recession exposed and exacerbated unsound practices occurring nationwide and left many states struggling to find stability.

The report released by the New York City-based State Budget Crisis Task Force focused on California, Illinois, New Jersey, New York, Texas and Virginia. According to the report, these states hold a third of the country’s population and account for almost 40 cents of every dollar spent by state and local governments. “The ability of the states to meet their obligations to public employees, to creditors and most critically to the education and well-being of their citizens is threatened,” Richard Ravitch, the former lieutenant governor of New York, and Paul Volcker, the former chairman of the Federal Reserve, wrote. Both are chairmen of the State Budget Crisis Task Force. “The conclusion of the task force is unambiguous. The existing trajectory of state spending, taxation and administrative practices cannot be sustained. The basic problem is not cyclical. It is structural. The time to act is now.”

States' spending has a significant effect on the economy as a whole. States spend a total $1.5 trillion annually. State and local governments cover 90 percent of education costs, and states spend an estimated $200 billion annually on health care for the poor each year. States are also important employers. They employ more than 19 million workers, which account for 15 percent of all workers in the nation. States employ six times as many people as the federal government.

But employee headcounts are shrinking as states face post-recession budget realities. According to the report, states are facing budget shortfalls that total an estimated $55 billion. States responded to the crisis by dipping into reserves, if available, raising taxes and cutting, especially staff. According to the report, Illinois lost 23,300 state and local government jobs from June 2009 to May 2012. New York saw comparable numbers. But most states in the study experienced more public jobs cuts than Illinois and New York. California saw state and local employment dip by 125,800 over the same period. Only New Jersey lost less than Illinois, at 21,600. The report said that states targeted personnel costs for larger cuts after the 2008 financial crisis more than they did in other recent economic downturns. “This is a fundamental shift in the way governments have responded to recessions and appears to signal a willingness to “unbuild” state government in a way that has not been done before,” the report said.

The report found that state budgets fared worse in the downturn than other areas of the economy and would likely take longer to bounce back. “The sharp deterioration in state finances as a result of the 2008 financial collapse and associated recession is well-known. State government tax revenues were hit much harder than the overall economy. Although real gross domestic product declined by 5.1 percent during the recession, the components of personal income typically taxed by state governments declined by 10 percent; and consumption of items typically subject to state sales taxes declined by 11 percent.”

As Congress seeks to reduce the federal deficit in wake of the recession, the authors of the study also try to predict the potential impact of cuts to federal funding, which they say would most likely hit grants that go to states. “Even if Congress and the president do not cut the federal budget drastically this year or next, significant cuts are almost certain over the longer term. We may assume that areas such as defense, Social Security, Medicare, and net interest will not be cut as deeply as other programs. If this is the case, federal grants to state and local governments will be a primary target of federal budget cuts.” The study says a 10 percent cut to such grants would mean a $60 billion reduction in funds going to states. The study says such a cut would be “equivalent to more than doubling the corporate income tax, cutting police and fire spending almost in half, or eliminating all spending on libraries, parks and recreation.” Under such a reduction, Illinois would lose $2.3 billion.

However, the study said that not all state budget problems can be blamed on the recession. Growing health care and retirement costs, coupled with budget gimmickry, had set many states, including Illinois, up for a fall. “The rapid growth in Medicaid spending has pushed aside other types of state spending. Medicaid recently surpassed K-12 education as the largest area of state spending when all funds, including federal funds, are considered; Medicaid appears likely to continue to claim a growing share of state resources,” the report said. All six states in the study have made efforts to slash Medicaid liabilities. Illinois is not the only state that has pushed off Medicaid bills from one fiscal year into the next. Texas intentionally underfunded its Medicaid program and now must make up a $4.8 billion shortfall by September 2013.

It will come as no surprise to Illinois residents that pension and retiree health care costs are also included in the reports analysis of budget challenges. According to the study, California, Illinois and New Jersey account for more than half of the total unfunded liability for pension costs nationwide.

All six states were guilty of using budget gimmicks or paying for ongoing costs with one-time-only revenues. California, New Jersey and New York joined Illinois in borrowing against tobacco settlement revenues, a budgeting trick called securitization. All six states have delayed payments to local governments, schools or vendors. All six have also used fund sweeps to balance their budgets. All the states but Texas have borrowed either to refinance other debt or cover annual costs, including pension payments.

The report makes a number of recommendations, including that states make budgets more transparent and create multi-year projections that are more than just window dressing. The study also suggests that states make their pension funds more transparent by reporting on investment risks. The authors say that states should create automatic funding mechanisms to ensure that pension payments are made, as well as automatically deferring some money each year into rainy day funds.

Monday, July 16, 2012

As fiscal year ended, state carried over billions in unpaid obligations

By Jamey Dunn 

When Fiscal Year 2012 ended on the last day of June, Illinois continued to face billions in unpaid bills. And according to Comptroller Judy Barr Topinka, the recently passed budget may not cover some costs through the end of the current fiscal year.

Topinka estimates that at the end of FY2012, the state had $7.5 billion to $8 billion in unpaid obligations, including bills, employee health care costs and unpaid corporate tax returns. That is an improvement over the same time last year, when the state had $8.5 billion in obligations it had not paid.

The stack of bills at the comptroller’s office at the end of June to be paid out of the General Revenue Fund was $3.656 billion, down from $3.798 billion last year. In addition to unpaid General Revenue bills, this year Illinois owed $830 million in bills to be paid out of education funds. Topinka estimates that about $3.5 billion worth of unpaid bills, predominantly Medicaid costs, have yet to be sent to her office. She said the state also has to pay back about $100 million to funds outside the General Revenue Fund from which Gov. Pat Quinn and the General Assembly have agreed to borrow in recent budget plans.

While the large backlog of unpaid liabilities shrank slightly, the state’s revenues increased last year. Topinka said that the FY 2012 revenues increased by $2.3 billion. She said much of the new revenue was spent on pension costs because the state used General Revenue Funds instead of borrowing to make its annual pension payment. According to the comptroller’s quarterly report, the recent income tax hike and increased consumer spending helped to increase revenues last fiscal year.

General Fund spending increased in FY2012 by $2 billion from FY2011. Under the FY 2013 budget, such spending would decrease by more than $500 million. However, most of the savings are expected to be used to help address the backlog of Medicaid bills. According Quinn, a total of $1.3 billion in old bills will be paid off under the FY2013 budget “Positive steps were taken this year toward getting our financial house in order, but we clearly still have a long way to go to fully clean up this colossal mess,” Topinka said in a prepared statement.

Topinka predicts continued budget woes for the state. “Serious fiscal challenges and payment delays are expected to continue in fiscal year 2013,” the report said. Money for state retiree benefits was cut in half under the FY 2013 budget, and the comptroller said it would likely run out during the first six months of the fiscal year. She said a new law, which would require retirees to pay premiums for their health care coverage, would help address the underfunding of the program but would not solve the problem. “While there may be state cost reductions through the implementation of P.A. 97-695, which allows the state to charge retirees additional amounts for their health insurance coverage, it seems unlikely that this would be enough to eliminate funding pressure for this area.”

She also predicts that a Department of Human Services program that provides child care for low-income families would likely run out of money in the spring, before the end of FY2013. Lawmakers scrambled last spring to find the money needed to fund the program through the end of FY2012. The report also said that the state might not have enough money to pay FY 2012 bills for the Department of Aging and still fully fund the department's programs for FY 2013. The report notes that General State Aid to schools was cut by $161 million in the FY 2013 budget and says that making “timely” payments to public universities and the State University Retirement System “will be challenging this year.”

Topinka’s report contained little good news for those waiting on overdue payment from the state. “While Illinois has made gains by making its pension payments and addressing spending growth, there remains a long way to go. As a result, longstanding delays for providers of state services will continue into fiscal year 2013,” it says.

Friday, July 13, 2012

Future of coal-to-gas plant rests with Quinn

By Jamey Dunn

A year ago today, Gov. Pat Quinn signed legislation meant to clear the way for construction of a plant on the southeast side of Chicago that would convert coal to natural gas. Now, the governor’s pen may yet again decide the future of the controversial project.

Under the original plan, four utility companies would have covered construction costs and purchased gas from the plant, which would be owned by Leucadia National Corp. But Peoples Gas and North Shore Gas backed out of the project, leaving only Ameren and Nicor. The Illinois Commerce Commission (ICC) ruled this week that the two remaining companies would not be required to pay for all the costs but only cover a percentage equal to the amount of gas they are each required to buy. “The commission determined that in accordance with the law, Nicor and Ameren Illinois would each be responsible for 42 percent of the capital costs and operational expenses, for a total of 84 percent of the total, since they are required to take 84 percent of the substitute natural gas plant’s output,” said a written statement from the ICC.

Construction is scheduled to start in 2015, and the plant would be built on the polluted site of the former LTV Steel plant. It is designed to trap most of its emissions underground instead of releasing them into the air.

But according to Chicago Clean Energy, a subsidiary of Leucadia, the project is now in jeopardy. The group says the plant cannot be financed unless there is guarantee that all the construction costs are covered. Supporters of the project are calling on Gov. Pat Quinn to sign Senate Bill 3766, which would override the ICC’s ruling and require the two utilities to pay all the construction cost.

“The Chicago Clean Energy project is the most significant economic investment that the southeast side has ever seen,” Ted Stalnos, president of the Calumet Area Industrial Commission, said during a recent rally in favor of the project. “Let’s clean up that site. Sign this bill. Let’s put people back to work.” Chicago Clean Energy plans to clean up the site before building the plant there. “The southeast side of Chicago is currently a jobs desert, an opportunity desert. We need this investment,” said Dan McMahon, business representative for Carpenters Union Local 272. The plant is expected to create an estimated 1,000 construction jobs and 200 permanent jobs after it is built.

But others representing industry throughout the state say the plant would be bad for business because it would increase rates far beyond the current cost of natural gas. “It’s not fair for rate payers in the Ameren and Nicor territories to subside 100 percent of the cost,” said Mark Denzler, vice president and chief operating officer of the Illinois Manufacturing Association. “Gov. Quinn, who is the founder of [the Citizens Utility Board (CUB)], now solely has the power of whether to sign one of the biggest rate increases in history or not. Jim Chilsen director of communications for CUB, a Chicago-based consumer advocacy group, agrees. “We’re not universally opposed to projects like these, but we are concerned that the way that the legislation is structured that it is extremely unfair to suburban, central and southern Illinois consumers who could be forced to pay up to triple costs.”

He says the fact that Quinn founded CUB does not necessarily give the group a leg up when it comes to persuading Quinn to veto the bill. “The governor, he has a long history of consumer advocacy. He listens to all sides of an issue. I don’t think that we necessarily have an advantage.” However, he said that the governor should take notice that business groups, environmental groups and consumer advocacy groups, which are not often unified on an issue, have teamed up to ask Quinn to reject the plan. “I think that’s a pretty powerful message. I think that the facts speak for themselves.”

A spokeswoman for Quinn said the governor is reviewing the bill. 

Proponents say there are no guarantees that natural gas prices will stay low. They argue that having a consistent source of natural gas in the state for the next 30 years would help protect customers from volatility. “Prices fluctuate -- gas station prices, and so do natural gas prices, as well,” said Chicago Democratic Sen. Donne Trotter, who sponsored the legislation enabling the project. Trotter argues that the plant would bring desperately needed jobs to the area.

 Environmental groups say that the southeast side, which has a history of dangerous pollution, should not have to take an environmental risk to have economic development. (For more on the environmental history of the area, see the current Illinois Issues.) “They are looking for jobs,” said Becki Clayborn, a representative of the Illinois chapter of the Sierra Club’s Illinois Beyond Coal Campaign. “But because the community has seen it time and time again, they are not buying it.” Local environmental groups hope that the area can bolster its economy through renewable energy projects and by becoming a recreation destination.

Thursday, July 12, 2012

Medicaid reform seeks to put to rest
the debate over hospital charity care

By Jamey Dunn

Changes to the state’s Medicaid program, which Gov. Pat Quinn recently signed into law, were heralded as historic reform and are expected to shave billions off of the state’s liability under the program. But the sweeping plan also attempts to resolve some longstanding disputes over health care policy in Illinois. This is part one in a two-part series that looks at those components of the new law.

The reform package, which contained five separate bills, will make a number of changes. It will reduce some services offered through Medicaid, increase taxes on cigarettes and other tobacco products and give coverage to thousands of uninsured residents of Cook County.

The plan also aims to resolve the longstanding issue of what hospitals must do to be considered charitable organizations eligible for local property tax exemptions. 

Under the new law, hospitals must provide charity care and other services that are equal to the tax liability that they would have incurred without the exemption. If they do not meet the threshold, they can make donations to other charitable health care providers. For-profit hospitals will also be able to earn tax credits for charitable care that they provide.

In the past, hospitals have argued that there were no clear standards for what they must do to receive the exemption. A 2010 Illinois Supreme Court ruling found that Provena Covenant Medical Center in Champaign County did not qualify for the tax exemption. The court said the hospital was not offering truly charitable care but instead, it was writing off bad debt, much like a for-profit hospital would. The ruling went on to spell out parameters for measuring what is or isn’t charity care, but it did not set a specific threshold that hospitals must meet.

Following the ruling, the Illinois Department of Revenue pulled exempt status from Northwestern Memorial Hospital's Prentice Women's Hospital in Chicago, Edward Hospital in Naperville and Decatur Memorial Hospital. The department said it used characteristics defined in the Provena decision to determine the later rulings.

However, Democratic Supreme Court Justices Anne Burke and Charles Freeman disagreed with part of the ruling, saying the court does not have the power to set the standards for defining charity. “This can only cause confusion, speculation and uncertainty for everyone: institutions, taxing bodies and the courts. Because the [Illinois Supreme Court] imposes such a standard, without the authority to do so, I cannot agree with it,” Burke wrote in her dissent.

After the Provena decision, lawmakers voiced concerns that such uncertainty would encourage cash-strapped municipalities to target nonprofit hospitals in search of revenue. “I have a concern now that we are going to see a rush of local governments trying to go after other health facilities. Thinking that this is a way to get some quick revenue from property taxes … the government may get a few extra dollars in property taxes, but then government is going to have to start providing all those services that those health care facilities used to provide,” Rockford Republican Sen. Dave Syverson, the minority spokesperson of the Senate Public Health Committee, said after the ruling.

“Some legislative response is probably going to have to be made to protect those health care facilities,” he added.

Quinn put a hold on any new rulings from the Department of Revenue and tried to work out a separate deal with hospitals. But the March 1, 2012, deadline he set for reaching an agreement came and went with no results.
Instead, the solution came in May at the end of the spring legislative session, slipping somewhat under the radar as just one component of a proposal to reduce the state’s Medicaid liability by $2.7 billion.

While the new law could mark the end of the debate, some say there are likely to be few changes in the way that hospitals operate as a result. “I’m not sure, to tell you the truth, that a whole lot will change,” said John Colombo, a tax law professor at the University of Illinois. “My sense is that this isn’t going to affect the behavior of hospitals in any major way.” Colombo, whose research primarily focuses on tax-exempt organizations, said the standard is set up in a way that hospitals will likely be able to meet it with what they are already doing. “Even those hospitals [that don’t reach the threshold] at the end of the day, all they have to do is total up what they were missing the mark by and then cut a check."

He added, “Think about it, right, this bill was favored and pushed by the Illinois Hospital Association.”

Previously Colombo said that hospitals argued that any community outreach was charitable. But he said that would change under the law. “You don’t get to count every single dollar that you put into health fairs.” He said that the new law does make an important distinction. It requires hospitals to show that whatever they classify as charitable care for the exemption has to be targeted at those who cannot afford health care. “At least the bill seems to concede that when it comes to assessing charitableness of hospitals, it’s all about services that help the poor. It’s all about services that help some underserved population.”

Colombo said his concern with setting a black and white threshold for qualifying for the exemption may discourage hospitals from going beyond what is required of them and could prompt some to scale back on charity care. “Five years from now, are we going to find that all hospitals have magically converged on this single number?” Colombo asked. “When there is a numerical target, pressures will combine to structure operations so that you hit the target, maybe exceed it just a little bit so you have some cushion. But there’s no real reason to do anything but that target. If you hit your target, why would you do anything more?”

He advocates instead weighing what charity-care hospitals provide that for-profit hospitals are less willing to offer, such as services that are unlikely to turn a profit. He lists trauma centers and emergency psychiatric care as examples. “Why is it that the Chicago Symphony orchestra is a tax-exempt charitable organization? Because it can’t exist in the private market. Same with the Field Museum. Same with the Shedd Aquarium,” Colombo said. “What is it that nonprofit hospitals do, if anything, that for-profit hospitals do not do? That ought to be our inquiry.”

Danny Chun, vice president of corporate communications and marketing for the Illinois Hospital Association, said the association did not lobby specifically for the standards that define charity care in Senate Bill 3261. “I don’t want people to be left with the impression that we proposed it, that we supported it and that we pushed for it.” He said his organization backed the plan as a whole. While he said there were some pieces that the group liked and some it did not, Medicaid reform would not have happened without every component that was passed. “In order for all those bills to move, they had to be part of a package.” Chun said the Medicaid reform package should really be viewed as an overhaul of health care in the state. “At the end of the day ... those five bills were all health-care related. ... Several of the measures had nothing to do with Medicaid in a direct way.”

However, Chun said the hospital association is “very pleased” that a specific threshold that is “clear and transparent to everyone” has been set for hospitals seeking the tax exemption. “It’s not a free pass because it does hold hospitals accountable. It sets very clear parameters of what hospitals need to do.”

Sen. Heather Steans, who worked on the Medicaid reform package, agreed that the tax exemption issue may not have been resolved without being rolled into a larger proposal. “That has been out there languishing for decades.”

She said it was easier to get agreements on the charity care issue and Medicaid reform if providers could consider them all at once and have an idea of what the lay of the land would be going forward. “So everything is known, and you know how you can and can’t survive. You sort of have to solve it all at once.”

Indeed, Fitch Rating agency praised the provision for creating a consistent standard. "Fitch believes the legislation provides long-overdue clarity as to what constitutes charity care and should not negatively affect the Illinois hospitals we rate,” said a written statement from the agency.

Steans said the give and take of negotiation allowed controversial topics to be put on the table. Hospitals have resisted attaching a dollar amount of charity that must be given to get the exemption. Attorney General Lisa Madigan pushed without success in 2006 to require that hospitals spend 8 percent of revenue on charity for the exemption. “It’s really hard sometimes to win stuff against these lobbying groups, unfortunately,” Steans, a Chicago Democrat, said. “It’s one or the other on this one. It’s not all good, not all bad.”

"The Medicaid legislation was the result of hard work and negotiations between our administration, members of the General Assembly and various stakeholders. Bills on the same topic are frequently packaged by the legislature," said a written statement from Quinn's office. "It was decided that introducing a package of bills would help ensure that these important reforms reached the Governor’s desk. Decisions such as including charity care were made after discussions and work with all parties, including the Illinois Hospital Association. It is not unusual to have healthcare bills considered alongside one another."

Madigan also supports the charity-care provisions in the new law. “Providing access to quality health care has been a consistent priority for Attorney General Madigan. We are pleased that Illinois will now have a standard by which hospitals must provide free health care for people who cannot afford it. Our office engaged in discussions throughout the spring session with our primary goal being to ensure that people and families in need can access health care when they need it the most,” said a prepared statement from her office.

Colombo agreed. “It’s messy; it’s sausage. This is just the way the process works. ... You go through legislative compromise, and you end up with a product that often doesn’t satisfy everybody.” Colombo said it is possible that the Illinois Supreme Court might take issue with some of the provisions in the bill, such as allowing hospitals to count as charity care the shortfalls between Medicaid reimbursements and the actual cost of services they provide —a direct contradiction to the Supreme Court ruing. “The opinion says Medicaid shortfalls don’t count. The bill says they do. .. .It’s going to be interesting if it ever ends up before the Illinois Supreme Court.” However, he said it is unlikely that the law would end up before the court. “Maybe it could get challenged by a local school district or somebody who has a stake in local tax revenue.”

Overall, Colombo acknowledged that the standards for charity care and the threshold for the exemption are likely a “win” for the hospitals. But he said that not even the standards set in the Provena decision were necessarily here to stay. “There would have been more litigation. We wouldn’t have had this settled for years. ... It’s not a slam dunk that the Provena version of this would have survived another round of litigation."

Chun said that as federal health care reform goes into effect, the number of so-called charity care patients, who cannot afford care and are not covered by insurance or a safety net program, would shrink significantly. Many will obtain federally subsidized insurance or be added to the Medicaid program. He said that hospitals would need flexibility in what can be dubbed as charitable. “There are all kinds of other things that hospitals do to serve the uninsured and the under-insured and low-income that are not strictly classified as charity care.” Chun points to community clinics, preventative care and screening and vaccination programs offered by hospitals. And yes, even participation in the Medicaid program. “Hospitals have stepped up by partnering with the state to help support the Medicaid program.” Which means “low rates, low pay and slow pay.” He said some hospitals are waiting up to six months for reimbursements. “That’s why you can’t just look at charity care anymore. ... The numbers are going to change. The needs are going to change. How we serve people and where we serve them is going to change,” he said. “Looking at health care through an old snapshot and old framework pre-[federal] health reform just doesn’t make sense these days.”

Colombo also said that there is a need to modernize thinking about hospitals and charity care. But he is looking a little further back in time.

 “The real issue is, are hospitals really charities at all?” he said. “Hospitals got labeled as charitable in the 1800s and early 1900s, when hospitals were places where poor people went to die. ... The thing that we call a hospital today did not exist.” He added: “Maybe we need to let go of the past, and we need to just recognize that an industry that is labeled as charitable because of what they did 100 years ago isn’t charitable anymore. They’re running a business.”

 Colombo argued that it does not make sense to try to tackle health care problems with tax policy. “When we have poor people who are starving, do we say to the local Kroger’s, ‘You could be tax exempt if you gave food to poor people?’ We don’t do that. We have food stamps,” he said. “Why don’t we just treat [hospitals] like grocery stores? ‘You sell your product, and we will deal with access to your product for the poor through other government programs.”

Wednesday, July 11, 2012

Quinn signs law ending legislative scholarships

By Jamey Dunn 

Gov. Pat Quinn signed a bill today eliminating legislative scholarships, as federal investigators appear to be pushing forward on a probe of the scandal-ridden program.

“It’s a very good day for Illinois. It’s a very good day for reform. It’s a good day for the taxpayers of our state. It’s a good day for education and for students who work hard and do their very best in order to try and get a scholarship that they deserve,” Quinn said at a bill signing event in Chicago today.

The program, which lets all members of the General Assembly hand out tuition waivers for state universities to students in their districts, has been under fire for years. Reports have surfaced of lawmakers giving the waivers to children of the politically connected or to students living outside of their districts. “I can understand if it happens once, might be a mistake. Twice? May be a mistake. But we are beginning to see a pattern, a trend, and that’s a problem,” said Rep. Fred Crespo, a sponsor of House Bill 3810. Because of allegations of corruption in the program, many lawmakers have opted not to give out the scholarships. Others call on independent panels to award them.

Lawmakers will no longer be able to hand out the waivers starting September 1. Students who have already been chosen to get the waivers for the upcoming school year will still receive them.

The newest development in the ongoing story of potential abuses of the program came yesterday when the Chicago Sun-Times reported that then-U.S. Attorney Patrick Fitzgerald’s office issued a subpoena in June to Sen. Annazette Collins for records related to her awarding of scholarships over her more than a decade-long stint in the General Assembly. The Sun-Times reported in March that Collins had awarded scholarships to students who used her home as their place of residence for the applications, while other documentation showed their residences as being outside of Collins’ district. Collins has denied any wrongdoing through her lawyer. Collins lost her primary election bid last February.

“Everyone has to follow the rules. So if there have been any rules that have been broken, they have to pay the consequences,” Quinn said today when asked about Collins. Prosecutors have also sought information about the scholarship program from the State Board of Education.

“Legislative scholarships are a perfect example of a program created with the best of intentions and then sadly hijacked by a small band of craven lawmakers with the worst of intentions,” said Andy Shaw, president and chief operating officer of the Better Government Association. “This is not about depriving needy students of educational opportunities. This is about depriving greedy lawmakers of unethical patronage opportunities.”

Crespo, a Hoffman Estates Democrat, said that while the program is often called a scholarship program, the cost is actually passed on to the universities. “We call this the legislative scholarship. It is not a scholarship. It’s a tuition waiver. A scholarship means that there is money or funding behind it. There was never any funding for this,” he said at today’s bill signing. Crespo said the program cost universities $13.5 million last year. “What does that mean for the state colleges? They need to cover that cost somehow. Consequently, I’m pretty sure the tuition for some of the paying students had to cover this privilege for state legislators.”

However, supporters of the program say it is an equitable and inexpensive way to make sure that financial assistance is spread throughout the state. “This is not a significant cost to the universities,” said Rep. Jim Sacia, who has local superintendents choose the students who receive waivers in his district. “What a shame that some of our colleagues have abused this system. This is one of the finest opportunities for young people out there. It gives kids the opportunity to go [to college] who don’t have the financial wherewithal,” Sacia, a Pecatonica Republican, said when the House voted to end the program. 

 But Shaw said the message sent by ending the program is more substantial than the savings. “This involves a very small amount of money in the scheme of things, less than $15 million a year, but it sends a very big symbolic message that better government is indeed possible in the state of Illinois.”

The new law also calls for a task force to scrutinize all waivers handed out by universities, which totaled $414 million last year. Such waivers are handed out for a variety of reasons, such as to graduate students who work in exchange for some or all of their tuition costs. Critics say that such waivers are handed out with little oversight and come at the expense of paying students. Those opposed to eliminating legislative waivers said the program should have gone through the same vetting under the task force as other waivers will face. “It’s almost [putting] the cart before the horse that we have this commission to take a look at scholarship waivers and at the same time abolish this program. Why not wait until we get findings that will determine the legitimacy of this program?” said Maywood Democratic Sen. Kimberly Lightford.

Tuesday, July 10, 2012

Report of assaults stirs new debate over prison closures

By Jamey Dunn

Lawmakers and unions officials are asking Gov. Pat Quinn to but the brakes on prison closures after reports of recent assaults have surfaced.

The Associated Press reported that a corrections officer was stabbed at the Stateville Correctional Center and another guard was stabbed at the Pontiac Correctional Center in the last six weeks. The AP also reported that more than a dozen weapons have been found during recent searches of inmates cells, and that two prisoners were found unresponsive in the cell they shared. Officials from the American Federation of State County and Municipal Employees Council 31, which represents prison guards, said that the two had overdosed on heroin. A spokeswoman for the Illinois Department of Corrections said she could not comment on the incident because it is part of an ongoing investigation. According to the IDOC, both inmates survived.

Legislators and union leaders say the reports bolster their arguments against closing some of the state’s corrections facilities.

Last week, Gov. Pat Quinn made clear his intentions to move forward with the closures with a few strokes of his veto pen. Quinn signed the budget sent to him by the General Assembly, but he vetoed $19.4 million that was included to run the state’s only super-maximum security prison located near Tamms and the $21.2 million included to operate a women’s prison in Dwight. In addition to the prisons, he plans to close three transition centers meant to help inmates reenter society. The prisons and transition centers are scheduled to be closed on August 31. (For more on the debate surrounding the closure of Tamms, see Illinois Issues, June 2012.)

Quinn also cut $8.9 million for a youth prison in Joliet and $6.6 million for a youth prison in Murphysboro. The facility in Joliet is slated for closure on November 30, and the Murphysboro facility is scheduled for closure on August 31.

Quinn’s administration said that the assaults have nothing to do with the governor’s closure plans. “There is no evidence of an increase in weapons found or assaults within the facilities as a result of the closure plans,  Stacey Solano, a spokeswoman for the IDOC, said in a prepared statement. As common practice, to ensure safety and security within the facilities, IDOC often searches for contraband and removes it. Inmates found to be in possession of contraband, or those who display negative behavior, are swiftly and appropriately disciplined.” 

However, opponents today called for the governor to halt the closures until lawmakers return for their fall veto session scheduled for November. They said the legislature should have a chance to vote to override the governor’s vetoes before the facilities are shuttered. “They should be halted. The governor should halt them, and he should wait for the General Assembly. ... The General Assembly worked very hard on this budget. They did allocate money to keep these facilities open,” said Henry Bayer, executive director of AFSCME Council 31.

Lawmakers who oppose closing prisons argued that news of recent assaults undermines Quinn’s claims that the prisons will be safe after the closures. “Every prison now is overcrowded,” said Sen. Gary Forby, a Benton Democrat. “You’re going to hurt officers. You’re going to hurt prisoners. You’re going to hurt the state of Illinois.” Forby said that he and other opponents of the closures plan to lobby lawmakers to reject Quinn’s vetoes of corrections spending. “We’re going to try to override him. I’m going to stick to my guns.”

Republicans said Quinn should not have vetoed the money for prisons and then urged for spending elsewhere, such as the Department of Child and Family Services. Quinn also plans to close mental health centers and centers for the developmentally disabled as part of an effort to save money and move away from institutional care.

Sen. David Luechtefeld, an Okawville Republican, said Quinn rejected the money for facilities and “in the next breath, he doesn’t say to ‘pay some of our bills.’” He added, “It’s to simply spend the money someplace else.”

Rep. Mike Bost, a Murphysboro Republican, said: “We did our jobs. We put the money in the budget. We showed where our priorities were.”

Quinn argues that the facilities are a drain on the state’s budget, and money to fund them should instead be used to fund things that he sees as more pressing priorities. “Anyone who calls to keep these outdated, half-full, expensive facilities open is calling for the continual waste of taxpayer dollars on facilities the state no longer needs, Kelly Kraft, a Quinn budget spokeswoman, said in a prepared statement. The overall population is down from last year, and female entries into the system are declining. Inmates will be safely and securely transitioned into appropriate facilities fully capable of securing offenders and resulting in costs savings to Illinois taxpayers. Some will say that money was provided in the budget to keep these facilities open when in reality, legislators made a choice on how to spend taxpayer dollars: choosing outdated, half-full, expensive prisons over educating our children and keeping them safe,” 

Frank Mautino, a budget point man for the House Democrats, said that the budget bills would not have had the support to clear appropriations committees and reach a floor vote in the House if they had not contained funding for the state facilities targeted for closure. “Facility closures were the linchpin of the budget. ... Amongst the committee negotiations is where it became the linchpin,” he said.

Mautino, from Spring Valley, said that while there were not explicit agreements that he knows of between lawmakers and Quinn’s office to trade votes on other issues for assurances of facilities remaining open, Quinn had staff at committee meetings, and he should know that the budget would have been shot down without the funding for state institutions. “That’s how you put a budget together,” Bayer said. “Now it’s like: ‘Heads I win; tails you lose.’ The governor got many of the things he wanted.”

He criticized Quinn for not making public all the details of his plans for closing facilities and moving staff and prisoners to new locations. “If the department has a plan, we think they have an obligation to present it, to show us that things aren’t going to be out of hand. They haven’t done that. I don’t think they can do it,” Bayer said. “They’re taking places that are already overcrowded and making them even more overcrowded and trying to lead us to believe that it won’t be any more dangerous.” But Solano said the governor’s staff met with union representatives last week, briefed them on the plan and answered their questions. “The closure of multiple facilities is an ongoing process, and the department continues to work with the union as it moves forward with responsibly carrying out the closures.”

Bayer said the union has not ruled out taking legal action if Quinn proceeds with the closures, which AFSCME maintains would create unsafe working environments for some of its members. “We’re exploring all options,” Bayer said. “We’re very concerned about the dangers that are going to be exacerbated by this move.”

Friday, July 06, 2012

New law could roll back some limits on campaign money

By Jamey Dunn

Less than two years after the state’s first caps on campaign contributions went into effect, Gov. Pat Quinn signed a bill today that would eliminate those limits if outside groups funnel cash into campaigns.

Senate Bill 3722 would allow candidates in Illinois to ignore contribution limits when outside groups, called political action committees (PACs), spend money in a race. The bill is a response to a recent U.S. Supreme Court ruling that allows PACs to take in unlimited contributions as long as their efforts are not coordinated with candidates’ campaigns. Before the ruling, PACs could accept up to $10,000 from individual donors and $20,000 from unions and corporations.

Under SB 3722, is such a PAC spends more than $100,000 campaigning for a single candidate in a municipal race or a bid for the state legislature, then candidates in that race would not have to stick to limits on how much money they can accept from donors. In a statewide race, the threshold would be $250,000 spent by an outside group.

Rep. Barbara Flynn Currie, a sponsor of the bill, said the new law is intended to keep outside groups from deciding elections by opening potentially bottomless wallets. “I think what’s important about this bill is that no legislator is going to have to run in an election — in which somebody comes into the election with big bucks — with one hand tied behind her back,” she said.

Reform groups say the law creates a loophole that will allow candidates to circumvent the state’s contribution limits. David Morrison, deputy director of the Illinois Campaign for Political Reform, said nothing in the law stops candidates from having their own PACs that operate separately from their campaigns, much like both presidential candidates are doing in their current campaigns. If such a PAC spends over the limits in the law, then the candidate would be able to skirt contribution limits, even though the PAC and the campaign did not technically work together. “This bill lays out a road map for evading limits,” he said. “The only definition of independence in this thing is that you don’t actively coordinate expenditures. You can share vendors. You can share staff ... you can spend all of your money on one single candidate, which is again what we see at the federal level.”

Morrison acknowledged that the political landscape has changed in the wake of recent court rulings — including the U.S. Supreme Court ruling in Citizens United vs. the Federal Election Commission, which allows so called super PACs to raise and spend unlimited cash as long as they are not working with candidates. However, he said SB 3722 goes too far. “No other state in the country that’s dealing with this problem has responded by saying, ‘Oh, then we’ll just take limits off.’”

“I think they would prefer a political landscape that is not our political landscape, and I have to say, so do I,” Currie, a Chicago Democrat, said of reform groups opposed to the bill. However, she said that the rulings allow big money into the system, and something must be done to keep PACs from hijacking elections. She said the triggers in the law are modeled after a provision in the original campaign finance reform law that removes contribution caps if a self-funded candidate spends over certain thresholds. “We’re not setting a low trigger. We’re setting a high trigger.”

Kent Redfield, director of the Sunshine Project, a nonprofit campaign contribution database connected to the Illinois Campaign for Political Reform, called both provisions “a security blanket that doesn’t mean much” in state legislative races. He said it is unlikely that an outside group or a self-funded candidate would spend enough to toss out limits in a state race because most of the campaign money flows through the political committees of the four legislative leaders. “The case where you’re going to have super PACs that are going to trigger this law is going to be in statewide elections; it’s not going to happen legislative elections because the leaders can spend unlimited amounts in any way,” he said. “The super PACs are the legislative leaders.”

 Redfield said the law would come into play for statewide races. “National groups are interested in the governor’s race, and they’re interested in the attorney general’s race.”

Quinn, who helped lead the push for campaign finance reform after his predecessor, former Gov. Rod Blagojevich, was impeached and removed from office, said the new law is a temporary fix. “Bottom line: The rules changed, and this is a short-term solution that will help ensure fairness. This law is necessary to keep the playing field as level as possible,” said Annie Thompson, a spokesperson for Quinn. Thompson said the governor is waiting for recommendation from a campaign finance reform task force. The group is scheduled to submit its report in February 2013. “This isn’t by any means the final step. There’s still more work to be done,” Thompson said.

 Morrison said that during an especially busy legislative session, lawmakers pushed aside more nuanced suggestions that would not have involved tossing out contribution caps. “They were too busy with the budget, too busy with pensions.” He said supporters of SB 3722 agreed to revisit the issue after the task force makes recommendations. “We’re going to have to hold them to their word," he said.

 SB 3722 goes into effect immediately.

Thursday, July 05, 2012

Opponents say Leucadia power plant would cost too much for customers

By Jamey Dunn

Illinois business and environmental groups today panned a coal gasification project slated for construction in Chicago. They argue that the plant, which would turn coal and other carbon fuels into natural gas and trap emissions underground, would result in rate increases for customer statewide.

In July 2011, Gov. Pat Quinn approved a plan to build the plant on a polluted brownfield site on the southeast side of Chicago. Construction on the plant, which would be owned by Leucadia National Corp., is scheduled to begin in 2015. But after Peoples Gas and North Shore Gas bowed out of the project, the two remaining utilities, Ameren and Nicor Gas, argued that they were being stuck with too large of a share of the cost of construction. Both utilities would be required to buy gas from the plant, but they do not want to cover the construction expenses that the two utilities that left the project would have paid.

Business groups say that if they project is completed, customers of both utilities would pay the price. “If this project goes forward, the residents of Illinois, particularly in the Nicor and Ameren territories, are going to have to pay for natural gas at considerably higher prices,” said Mark Biel, executive director of the Chemical Industry Council of Illinois.

The Illinois Commerce Commission sided with Ameren and Nicor and rejected contracts that would have locked the utilities into a 30-year deal with the Leucadia plant. However, the commission agreed to reconsider the issue and is expected to give another ruling by July 11. “We have to make sure that everyone pays their fair share. And what happened is, this plant is now being put on suburban and downstate customers. That’s who’s paying for the plant, and we have a real problem with that,” said Brian McDaniel — senior policy analyst and government liaison for the Citizens Utility Board, a consumer advocacy group founded by Quinn. “There’s fundamental questions about equity and fairness that are on the table here and need to be answered,” he said.

But supporters of the project say that the commission has overstepped its regulatory authority. “They’re trying to rewrite legislation,” said Sen. Donne Trotter, sponsor of the legislation that created the project. Trotter also sponsored Senate Bill 3766, which would force the ICC to approve the contracts.

Opponents to SB 3766 today called on Quinn to veto the bill. “What Leucadia is seeking to do is go around Gov. Quinn’s hand-appointed Commerce Commission and change the law to tie their hands so that they cannot protect rate payers like they’re envisioned to do,” said Mark Denzler, vice president and chief operating officer of the Illinois Manufacturers Association. They say the bill would set a dangerous precedent that could take the teeth out of the regulatory commission. “You would have other utility companies trying to circumvent the Commerce Commission [by] going to the General Assembly when they think the Commerce Commission is going to make a ruling that’s detrimental to their cause.”

A spokesperson for Quinn said he is reviewing SB 3766.

Trotter said his bill is not an “end run around” the Commerce Commission but is instead meant “to clarify for them what their role is.”

While proponents of the plant say it would bring jobs to an economically depressed area, Biel said that it could hurt the economic outlook of the state overall. “Why would you want to locate a facility in Illinois if you know you’re going to have to pay an additional cost for your natural gas that you’re not going to have to pay in Iowa or Indiana or some of our competing states?” They argue that the recent boom in natural gas production aided by hydraulic fracturing, known as fracking, has led to plentiful cheap gas, and there is no need to create gas synthetically. “The dynamics have changed dramatically in the last two years with regards to natural gas availability.” (For more on fracking, see Illinois Issues May 2012.)

Trotter said that gas may be cheap now, but prices will likely change in the future. He and other backers argue that source of gas in the state could protect Illinois consumers from future changes in price. “Prices always fluctuate,” he said. Trotter said the law includes customer protections against drastic rate increases. Leucadia is required to put millions into a consumer protection reserve fund. “If prices rise over 2 percent, it will be capped there and all the other costs will be picked up through this fund,” Trotter said.

 He said environmental groups are trying to block the project because they are fundamentally opposed to any energy plant that uses coal. He said that the technology has been proven in other states. “Leucadia certainly doesn’t say that it is a perfect source of energy, but it certainly is something that has been proven to be a safe source of energy.” He said the project would be beneficial to the community, which has historically suffered high levels of pollution. To build the plant, the company would first clean up the contaminated site. The plant must also capture 85 percent of its carbon emissions or face fines. “The clean up alone is a great feather in the cap of the community,” said Hoyt Hudson, project manager for the Leucadia plant.

 However, some environmental groups, both local to the southeast side of Chicago and statewide, argue that the development of cleaner energy technologies, such as wind power, could bring the same benefits to the community without environmental risks. “We need smart, common-sense energy policy in Illinois that puts all of us in a position to succeed while being mindful of out environmental footprint. Leucadia does neither, and in fact moves us backward down the path of progress,” Jack Darin, director of the Illinois chapter of the Sierra Club, said in a written statement. (For more on the environmental history of the southeast side and current environmental battles going on in the area, see the current edition of Illinois Issues.)

Trotter said he understands why residents in the area are wary of the project. “Part of the problem is that in the past, there have been so many promises and none of them kept.” But he said once they see the investments that will be made in the area as part of the project, he thinks minds will be changed.