New law will bring fed dollars to health care providers

[August 20, 2008]  CHICAGO -- On Tuesday, Gov. Rod R. Blagojevich signed into law the 2009 hospital assessment, which, once approved by the federal Centers for Medicare and Medicaid Services, will bring millions of dollars in federal matching funds to Illinois hospitals -- particularly those with high volumes of Medicaid patients.

Senate Bill 2857 had overwhelming support in both the House (113-0-1) and the Senate (54-0-1). The bill was sponsored by state Rep. Barbara Flynn Currie and state Sen. Jeffrey Schoenberg.

"Health care is a top priority in Illinois. This bill facilitates that process, secures the matching federal dollars and gets the money where it needs to go to ensure everyone gets the quality health care they deserve," Blagojevich said.

Under this agreement between Illinois and the federal government, the Illinois Department of Healthcare and Family Services will distribute $1.55 billion in Medicaid payments to hospitals from the Hospital Provider Fund. The federal government matches these payments and sends Illinois $777 million in matching funds. The state then collects $907 million in taxes from hospitals, totaling $1.67 billion. Through this process, hospitals gain $655 million in increased funding. The General Assembly has included Senate Bill 2857 in the fiscal 2009 budget.

"The hospital assessment bill is critical for the people of Illinois, because it ensures proper funding for the doctors and hospitals who are serving our citizens," said Currie, who sponsored the legislation in the House.

"This critical infusion of federal dollars will help hospitals and other health care providers ensure accessible, affordable and quality health care services for those who live in underserved communities across Illinois," said Schoenberg, Senate sponsor. "Without these resources, hospitals serving residents of predominantly lower- and lower-middle-income communities in the Chicago area and those downstate would be threatened with closing their doors or drastically cutting services to stay alive."

"During Gov. Blagojevich's tenure, Illinois has received federal approval for two successful hospital assessment plans, bringing nearly $2.3 billion in federal dollars to Illinois. Our hospitals had not received funding through this type of plan in more than 10 years prior to this administration," said Barry S. Maram, director of the Department of Healthcare and Family Services. "The department will continue working with lawmakers, our partners in the industry and the federal government to secure federal approval for the current proposed hospital assessment that will bring important federal matching dollars to Illinois hospitals for years to come."

The Department of Healthcare and Family Services will distribute the money to hospitals during the course of the year in 12 equal payments. The amount of money a hospital receives is based on the various services it provides to Medicaid patients. The additional funding recognizes hospitals that provide obstetrical, psychiatric and rehabilitative services, and considers capital costs and other types of services.

The amount of money that each hospital receives is the same for the period of the assessment, which allows hospitals to plan for their cash flow from the program each year. Senate Bill 2857 codifies a five-year plan that will be effective after being approved by the federal Centers for Medicare and Medicaid Services. The Illinois Department of Healthcare and Family Services is working with the federal Centers for Medicare and Medicaid Services to answer technical questions regarding the plan.

Before Blagojevich took office, more than 10 years had passed since Illinois had submitted a hospital assessment program to the federal government for approval. As a result, during that time hundreds of millions of federal health care dollars did not come to the state of Illinois. The first hospital assessment program approved by the federal government brought $490 million to Illinois in just more than one year. The most recent approved plan, which reached its sunset on July 1, brought more than $600 million per year to Illinois.

[Text from file received from the Illinois Office of Communication and Information]