State will appeal arbitrator’s order to end Maximus contract

At a special legislative hearing in Chicago on Sept. 18, AFSCME Council 31 Executive Director Henry Bayer urged the Illinois Department of Healthcare and Family Services to immediately terminate its contract with Maximus, the corporation hired by the state to redetermine eligibility for Medicaid benefits. But the Quinn Administration instead announced it will appeal an arbitrator’s order that calls for the contract to be ended.

The special joint legislative hearing of the House and Senate appropriations committees was convened for the express purpose of examining the current status state's contract with Maximus.

Due to a shortage of staff in DHFS and DHS, the state had fallen behind in making redeterminations of eligibility for Medicaid benefits. But rather than hire sufficient staff, the state contracted the work out to a private corporation.

AFSCME filed a grievance at the time the Maximus contract was implemented, charging that it violated the AFSCME Master Agreement. In June, arbitrator Ed Benn ruled for the union, finding the Maximus contract in violation of the union agreement. As a remedy, he ordered the state to terminate the Maximus contract no later than December 31, 2013, and that all bargaining unit work contracted to Maximus be returned to the bargaining unit employees.

At the arbitration hearing, AFSCME presented a great deal of evidence demonstrating that the Maximus contract is causing significant inefficiencies. The union demonstrated that the state would save $18,157,192 each year by hiring bargaining unit employees instead of using a contractor. And as Arbitrator Benn pointed out, the union’s evidence concerning the real costs of the Maximus contract was never refuted by the state.

AFSCME has met repeatedly with the state to attempt to work out an agreement for the orderly implementation of the arbitrator’s ruling, contingent upon the Quinn Administration’s commitment not to appeal the ruling to Circuit Court.

In testimony before the joint legislative hearing of the House and Senate appropriations committees, the state admitted that bringing even a portion of the work in-house would generate substantial savings. DHFS director Julie Hamos said the state wants to reach an agreement with AFSCME to end the duplicative part of the contract, which has Maximus performing casework functions that federal Medicaid rule and law require state employees to repeat. Hamos said the state wants to keep the technology, mail room and call center work in the Maximus contract, while all the casework would be performed by AFSCME members.

Despite these admissions, the Quinn Administration informed the appropriation committees that it intended to appeal the arbitrator’s decision, even as it would continue to seek to reach an agreement with the union.

"The state can save $18 million a year by ending this inefficient private contract and hiring adequate staff to ensure families who need health care through Medicaid receive it, and those who don’t qualify do not," AFSCME director Bayer said. "We urge the administration to work with AFSCME to quickly reach an agreement that ends the Maximus contract before another penny is wasted on it or legal costs."