Illinois hospitals would get $360 million more in federal Medicaid funding, but two facilities serving impoverished communities would close, under a plan a House committee approved Tuesday.
The Appropriations-Human Services Committee voted 14-0 on a revised, $3.5 billion program to fund hospitals statewide.
Lawmakers and the Illinois Health and Hospital Association, which represents over 200 hospitals in the state, have been working for months to update the program in compliance with federal requirements that more Medicaid clients be covered by cost-cutting managed-care systems.
Some hospitals have complained that privately run managed-care programs often deny or delay claims, which hurts cash flow. That prompted Rep. Greg Harris, a Chicago Democrat and committee chairman, to insert a provision to monitor managed-care operations and track denial claims.
The plan goes to the House floor where Harris said there could be a vote Wednesday. A Senate committee discussed the matter late Wednesday and sponsoring Sen. Heather Steans, a Democrat from Chicago, says action in her chamber could quickly follow.
Still, no one has come up with a solution for sparing two hospitals from closure under the current plan. They are among 22 so-called safety net hospitals that serve impoverished communities and rely heavily on Medicaid.
To draw down Medicaid dollars from Washington, every Illinois hospital pays an assessment to the state. The federal government matches it, the state keeps a share for other costs, and the rest is distributed to hospitals.
Harris said the modernized formula will rely on more recent patient data and make some of the payments dependent on reimbursements from the managed care system.
Anne Igoe, vice president of hospitals and health systems for SEIU Healthcare, a union that represents hospital workers, said the legislation “isn’t perfect” but is better than past versions.
“It gives additional funding to our safety nets across the state and ensures that the large systems aren’t getting money that should go to safety nets,” Igoe said.
That’s of little comfort to Roseland Community Hospital and South Shore Hospital, both located in low-income neighborhoods on Chicago’s South Side.
Because Medicaid doesn’t cover the full cost of treatment, other hospitals can make up the difference with private-pay patients. But Medicaid-reliant Roseland and South Shore say they fall further behind with the new formula, and closure would be a severe economic blow for their communities. South Shore has said it needs $3 million more to stay open. Roseland needs to make up $6.6 million in cuts.
Harris said a possible solution is the Hospital Mutual Assistance Program, a private, voluntary program in which wealthier hospitals donate needed funds to facilities in need.
Roseland CEO Tim Egan plans to discuss options with Harris and Senate sponsor Heather Steans, a Chicago Democrat. Egan is also exploring changes to Roseland’s services that would qualify it for special grants from the assessment program.
“A hospital needs to be invested in, not divested from,” said Egan.
The bills are SB1773 and SB1573.