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A downstate pharmacist says late Medicaid reimbursements from the State of Illinois drove his business into bankruptcy.

By Mary Massingale

SPRINGFIELD — Tom Miller used to own a pharmacy in Marion in southern Illinois, before he was forced to close it, due mostly, he says, to late Medicaid reimbursements from the state.

Now he’s working as a relief pharmacist at other pharmacies catching work wherever and whenever he can and driving at least 120 miles round-trip for each shift.

“I’m hustling it,” Miller said. “I literally work per diem.”

Nine months after he and his wife closed the pharmacy, he’s still looking for a permanent job. Miller also serves as a Methodist minister and looks to his faith to cope with his resentment.

“The situation has brought me much closer to Christ,” he said. “The bitterness is not the type that’s all-consuming.”

But it still seeps out.

“I’m pissed,” he said. “I’m bitter. I blame the senators and representatives — they allowed each governor to do what he wanted to.”

A graduate of St. Louis School of Pharmacy and a native of southern Illinois, Miller saw a harbinger of the end of his 20 years in the pharmacy business in May, when he received a state payment 270 days late. Earlier, he had put his personal property up as collateral for a Small Business Administration loan.

Payments from the state were too sporadic to offer as collateral for a regular loan. Crunched by irregular state payments themselves, drug wholesalers demanded cash for the $10,000 he owed. Unable to pay his taxes on time, Miller later that summer closed the pharmacy and declared corporate bankruptcy.

His store was sold to a pharmacy chain for less than what he owed on the SBA loan. He said he thinks he can avoid personal bankruptcy.

But the store closure and layoff of five employees haunted him. He said he became depressed, despondent and wondered, “Would I get a flippin’ job at 54?”

“I let a lot of people down,” he said. “I was raised that you pay your bills. The state caused me to violate my principles.”

The state, meanwhile, was skirting its own principles.

The Illinois House in May passed what Speaker Michael Madigan, D-Chicago, later acknowledged was an unbalanced budget for the fiscal year starting last July 1.

The House voted to make this year’s $3.7 billion payment to the state’s five public employee pension systems, but the Senate skipped town without taking a vote, postponing the payment until January. During the summer, Illinois politicians set their sights on the statewide November elections.

“I have never seen such an amount of in-fighting and back-biting,” Miller said. “They have no vision.”

Miller said he tried to bring vision to his pharmacy, by counseling customers on state and business programs that could reduce their prescription drug costs or by offering in-store credit.

He recalled one customer who entered his store and said, “I’ve got $5 to last me the rest of this month. Do I buy this prescription or do I eat?” He put the cost of the prescription on a tab.

“Why are the people that we elect to represent us in the state of Illinois — why are they allowing this situation?” he asked.

Miller and his wife have no health insurance. He suffers from diabetes, and they both suffer from hypertension. He worries that when he qualifies for Medicare at age 65 he won’t be able to pay his share, and may also end up on Medicaid, the state-federal health insurance primarily for the poor and disabled.

“I’ll be a hindrance to the state,” he said.

The state sometimes appears to be its own hindrance. Faced with a backlog of unpaid bills from the last fiscal year that ended in June, the state in December sold $1.5 billion in bonds backed by Illinois’ future shares of the 1998 settlement between the states and tobacco companies.

But the bond sale also shorted the state on the annual April payments it receives from the settlement through 2025. Illinois annually receives close to $300 million, but the bond sale decreases that amount to about $100 million, according to Brad Hahn, spokesman for Comptroller Judy Baar Topinka. That money can be used toward health-related expenses, such as pharmacies.

But the state still has a backlog of $4.5 billion in vendor bills dating back to October, according to Hahn.

And it’s now three months after Gov. Pat Quinn’s Inauguration Day promise of economic stability.

“I’m here today to say that we will pay our bills, that we will stabilize our budget,” Quinn said at the time.

A 67-percent personal income tax increase approved and signed into law in January is expected to garner close to $7 billion annually. But next year’s pension payment — projected by a nonpartisan legislative support agency at more than $4.8 billion — hovers in the background.

That official estimate most likely is based on the assumption that pension fund investments will get historic average returns and there will not be another market downturn for the next 30 years.

The Commission on Government Forecasting and Accountability now pegs the state’s pension system as $85.5 billion unfunded, according to market value. Moody’s Investors Service ranks it as the most underfunded state pension plan in the nation.

“We’re 50th out of 50,” Miller said, after learning of the state’s status. “Isn’t that a wonderful thing to say about the Land of Lincoln?”

When it comes to overdue Medicaid bills, the state during the past three weeks of March paid off $750 million to capture an enhanced federal matching rate before it dropped April 1, according to Hahn — a jump from the usual $100 million paid per week. Pharmacies are not eligible for the enhanced match, but have been included in the recent spate of payments, Hahn said.

Tony Sartoris, president of the 17-store Doc’s Drugs, headquartered in the north central town of Braidwood, said he appreciates the recent payment from the state, but likens it to a binge.

“It will then retreat back to where it was,” Sartoris said. “They’re borrowing from us.”

Mike Patton, executive director of the Illinois Pharmacists Association, said the “feast or famine” payments to pharmacists creates a struggle many of them — like Miller — can’t overcome.

“The lack of consistency is the biggest problem,” Patton said. “If they knew every 60 days they would get paid, they could plan.”

Hahn said he expects the state to make the same push on payments during the last weeks of June, before the federal match returns to its usual 50 percent on July 1.

“The backlog will continue, since spending exceeds revenue,” Hahn said.

He estimates the state will end the fiscal year with a total backlog of $6 billion to $7 billion — $4 billion in vendor bills and up to $3 billion in other financial obligations such as corporate tax refunds, employee group health insurance and Medicaid bills.

Miller said he wonders about the state’s seeming financial ineptitude.

“We are commanded to become stewards of our lives and our money,” Miller said.

And the lingering recession and high unemployment only compound the fiscal problem, he said.

“It’s a time where it cannot be ignored,” Miller said.

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