August-September 2009 Retiree Notes

August 11, 2009

Late medical payments plague QCHP participants

Those enrolled in the state’s Quality Care Health Plan will continue to feel pain over late medical payments. And it could get worse. The governor has announced he is cutting $600 million from the allocation for the QCHP. But it’s bad enough already.

“I had a medical procedure done in June 2008, which has yet to be paid,” state retiree Ron Bradley said. CIGNA, the plan administrator for QCHP, had told him that the bill had been released to be paid in November 2008. But the check, and many more like it, is caught up in the state’s huge financial mess.

The state already is behind about $4 billion in payments to vendors, including medical providers who treat patients covered by the state’s self-funded health plans.

According to the state’s Bureau of Benefits, as of the end of July, the state was just now getting around to paying in-network QCHP medical claims that were processed in January 2009—a claim lag in excess of six months or 180 days. Out-of-network medical claims go back to December 2008. The Quality Care Dental Plan claim lag is 112 days, or nearly four months.

Claims are being paid in the order of their processing date. But with the new cuts, the backlog of medical and dental claims will likely get even longer.

The consequences of these delays are mounting for Bradley and nearly every state and public-university employee and retiree covered by QCHP. Many have already been contacted by their providers to pay the insurance’s share of the bills or face collections. If the payment delays lengthen, the collection efforts will increase.

Bradley and many retirees are among the luckier ones: “I have Medicare as my primary and they paid the majority of the bill.” Still, he was given the choice of paying the leftover balance or taking a hit to his credit rating.

“So I paid the bill myself,” he said. “This is just not acceptable.”

Though the situation is much worse than ever, Illinois has a long history of payment delays for health-care claims.

“Providers should not worry that they won’t get paid,” Council 31 benefits director Hank Scheff said. “The state of Illinois is a habitual deadbeat, but it has always eventually paid in the past, and even though it is even further behind now, the providers should take comfort in knowing that if they are patient, under current law they’ll get interest on the amount owed.”

Under the state Insurance Code, the state must pay interest for late payments. So if the insurance does not pay providers within 30 days, interest begins to accrue at 9 percent per year on the amount owed. Interest is sent automatically if it amounts to more than $1.00 on a claim.

If the money is owed to an in-network (PPO) provider, or if the employee or retiree has “assigned the benefits” to a non-PPO provider, then the provider receives the interest accrued.

When an employee or retiree, in response to a bill from a PPO provider, pays the provider, CIGNA will still automatically pay the provider. The employee or retiree, in that instance, would be responsible for seeking reimbursement from the provider, including the accrued interest paid to them along with the medical claim amount.

For those individuals who are being hounded by medical providers to pay delayed medical claims, the Department of Central Management Services and the insurance divisions of both State Employees’ and State University retirement systems are working with employees and retirees to communicate with providers.

“The governor could have used the discretionary funding given him by the state budget legislation to avert this crisis,” Scheff said. “But even if he had, that doesn’t address the long-term problem. AFSCME believes that new sources of revenue must be found to address the immense budget shortfall. This is another reason for all employees and retirees to call their legislators in support of House Bill 174, a bill that would raise the income tax while decreasing property taxes.”

 

Steps to take when faced with aggressive collection efforts

1. Find out how much of the total medical or dental bill you owe, and how much the state (CIGNA or CompDent) is going to pay. This information is on your EOB and available at mycigna.com or mycompbenefits.com. In addition, you can get help getting this information by contacting the Member Services Division of the Bureau of Benefits (Illinois CMS) at: 217-782-2548 or 1-800-442-1300.
2. Pay your share of the bill…the amount you would owe after CIGNA (and Medicare, where appropriate), and CompDent, have paid their portion.
3. Call your medical or dental provider’s office. Tell them CIGNA (or CompDent for dental claims) has already processed the claim, that you have paid your portion, and that they will eventually receive what they are owed from the Plan.  Tell them what they will receive (the amount you wrote down) from the Plan, and tell them they will get 9% interest per year on delayed claims.
4. Tell the provider’s office that you don’t want to get any more late notices, repeat bills, or phone calls pertaining to that bill.
5. If the provider’s office continues to insist that you pay what you have determined CIGNA or CompDent will pay, with interest, you have a choice: You can either pay them, or consider looking for another physician, dentist, or other medical provider.

 

 

Retirees zoom to the top in political action

Retirees can sometimes feel as though politics and the legislative processes are out of their control, but Chapter 31 Retirees have increased their political muscle dramatically in the last five months.

They achieved this by signing up more than 1,000 new PEOPLE contributors, pushing Illinois retirees to the top AFSCME PEOPLE contributors nationwide.

“With over $100,000 now being contributed to PEOPLE by Chapter 31, I think it would be fair to say that this retiree chapter is now in the top tier of all AFSCME affiliates, both those covering working members as well as retirees, that raises funds for PEOPLE,” said Steve Regenstreif, Director of AFSCME Retirees.

Public Employees Organized to Promote Legislative Equality – PEOPLE — is the legislative and political arm of AFSCME.

“Retirees need to have allies among elected officials,” said Maria Britton, Council 31 director of retiree programs. “Big business groups pour hundreds of millions of dollars into every election and they have lately targeted public-sector retirees, saying they have golden retirement packages. The truth is that the average retiree on a standard-formula state pension in Illinois is between $18,000 and $20,000 a year, and their health benefits should not be cut. We need to send legislators a message to protect your retirement security.”

If members pool their cash, unions can help make sure that their endorsed candidates have enough funds to compete against business-backed opponents in the crucial media ad wars, she noted.

“Through the political process we can be involved in setting important public policy,” Britton said. “PEOPLE is the vehicle for public employees to make their voices heard in the electoral arena, policy debates and legislative deliberations.”

 

Chapter activists lobby in DC for health-care reform

Eleven Chapter 31 members joined a delegation from the Alliance for Retired Americans in a lobby day at the nation’s Capitol to lobby for health-care reform with an emphasis on the problems seniors have in getting adequate care.

“We went to the Hill armed with several points,” Chicago sub-chapter 60 vice-president Louis Bates-Spencer said. “We told our U.S. representatives that health care reform should: Allow early retirees who have trouble getting health insurance to buy into Medicare at affordable premiums; end Medicare Advantage over-payments and use the savings to improve Medicare; stop attempts to tax health care benefits, which could lead to the loss of coverage, especially for retirees;  and create a public plan option that will keep the costs of private insurance plans down.”

The lobby day was part of the Alliance’s legislative conference, held June 15-18 in Washington. The Alliance is an organization created to work for social and economic justice for retired citizens so that they may enjoy lives of dignity, personal and family fulfillment and security.

The Illinois retirees had the honor of escorting U.S. Rep. Jan Schakowsky to the stage when the Alliance presented her with a Leadership Award.

“AFSCME, one of the founding members of the Alliance, fully supports the goal of protecting the health and economic security of seniors, as does Rep. Schakowsky, which is why the award was so deserved,” Bates-Spencer said. “I believe the conference was very productive, filled with informative work- shops helping retirees become empowered to protect themselves. But in my opinion, lobby day was the highlight of the conference.”

 

 

Switch to defined - contribution pensions won’t help state crisis

Curtailing a defined-benefit pension does not improve the market value of the employer. That was the finding of a study published in the July/August issue of Financial Analysts Journal. It’s a finding that applies directly to the state of Illinois.

“I want Illinois legislators to pay attention to the results of this study,” Chapter 31 President Virginia Yates said. “Discussions in the General Assembly this year would lead some to believe that creating a two-tiered system would somehow reduce the state’s pension costs. This is simply not true.”

Under a two-tiered plan, state and university new hires could be placed in a defined-contribution pension plan — like a 401k. This is nothing more than a cut in pension benefits for most employees, because of the volatility of the financial markets.

In addition, retirees under 401ks are less secure which eventually leads to higher costs for the state, as Nebraska found, when it shifted employees to a defined-contribution plan and then back to a defined-benefit plan.

Further the state’s huge pension debt would be unaffected by cutting pension benefits for future employees. The debt has accumulated because the state has not paid its share of contributions for current employees, even as those employees have continued to make their required payments. After years of this shortsighted underfunding, the amount owed has increased to an overwhelming sum. Trying to address the problem by creating a less stable retirement for future state employees won’t work. The current debt still has to be paid.

“While we know that our pensions are protected by the constitution, it is unacceptable that the state try to side-step its duty to make sure the pension is funded,” Yates said. “The effect of allowing this debt to continue to accumulate either by lack of funding or borrowing has prolonged the state crisis and put immense pressure on legislators to cut our health care. We therefore ask that legislators do the right thing, heed the warnings of these studies and increase revenue to pay the bills.”

 

 

Yates wins SERS trustee election

Chapter 31 President Virginia Yates is the newest addition to the State Employees’ Retirement System Trustee Board. Yates won the election, held this spring, which added three active contributing members and one annuitant member to five-year terms, starting in July and running through June 2014.

Now Illinois state retirees have two strong AFSCME leaders working to protect their retirement security. In addition to Yates, Joyce King—who also serves on the Chapter 31 Executive Board—serves as a trustee.

“I recently attended my first trustee meeting, where the retirement system provided a thorough introduction to all of the departments and their particular functions,” Yates said. “I want to thank everyone who supported me in this election. I will work hard to honor their support.”