SPRINGFIELD — A $120 million cost-cutting measure in the recently passed Medicaid savings package skirts the normal bidding process, which was meant to find the best deal for taxpayers.

By Andrew Thomason

SPRINGFIELD — A $120 million cost-cutting measure in the recently passed Medicaid savings package skirts the normal bidding process, which was meant to find the best deal for taxpayers.

Gov. Pat Quinn today signed a $1.6 billion Medicaid savings plan that would, among other things, kick ineligible Medicaid recipients out of the health-care program by ensuring everyone in the system meets eligibility, residency and other requirements.

But to do so, the legislation allows the state to hire an outside vendor for the eligibility checks, and to expedite that hiring by avoiding timelines and procedures outlined in Illinois purchasing laws.

Bypassing the standard procedure for accepting bids allows the state to award a contract without considering costs.

Normally, sealed bids on contracts are submitted to the state and the contract is awarded to the lowest bidder that meets all requirements of the contract, a process that can take more than a year.

State Rep. Sara Feigenholtz, D-Chicago, helped negotiate the legislation. She said it came down to money, which taxpayers are losing every month the state goes without hiring a company to check eligibility.

Government moves slowly, Feigenholtz said.

The final say on who gets the contract is up to the state’s Chief Procurement Officer and the Illinois Department of Healthcare and Family Services, which have 90 days from Wednesday to find a suitable contractor.

Mike Claffey, a spokesman for the Department of Healthcare and Family Services, said the savings from the accelerated timeframe for taxpayers will be significant, but the department didn’t yet have a number.

“It’s very labor intensive (purging the Medicaid rolls), and we think bringing the contractor on board would be cost effective, and going through the normal procurement process would be very time consuming,” Claffey said.

Storied history

Illinois has a history of state contracts winding up in the hands of people who have connections to those in power. After Gov. Rod Blagojevich tried to sell President Obama’s vacated Senate seat to the highest bidder and attempted to extort campaign donations from the Children’s Memorial Hospital chief executive officer, a law reforming procurement practices was signed into law.

Just this year the state began to end contracts with companies linked to long-time power broker and Republican fundraiser William Cellini after he was convicted of conspiracy to commit extortion and aiding and abetting in the solicitation of a bribe.

Cellini’s conviction was a result of the same case that landed Blagojevich in federal prison.

“There’s no such thing as a perfect Medicaid reform bill … there’s a lot of moving parts,” Feigenholtz said regarding the accelerated timeframe for awarding the contract and Illinois’ notorious contract history.

Normal prohibitions on who can bid — businesses or people who owe money to the state, and people who have conflicts of interest are barred from winning a contract, for example — still apply, according to the Medicaid reform legislation.

Feigenholtz said she would like to see some savings from the Medicaid purging as soon as this fall.

The impetus for the legislation was the ballooning cost of the state-federal health insurance program, which serves about 2.7 million people.

If no action was taken this year, Quinn said, Medicaid was in jeopardy of collapsing. The savings package is in conjunction with a cigarette tax increase of a $1 a pack, raising the tax on a pack from $.98 to $1.98. Without those measures, the state was facing $21 billion in unpaid Medicaid bills by 2017.

Reporter Andrew Thomason can be reached at

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