 The Illinois House Human Services Appropriations Committee is
proposing a $463 million payment reduction of Medicaid to hospitals
for next year's budget. But the Illinois Hospital Association is
offering an alternative: Why not delay reimbursement payments
instead of making deeper cuts?"The state could extend the payment
cycle rather than do cuts across the board," said Howard Peters,
executive vice president of Illinois Hospital Association.
"Hospitals would rather be paid timely payments, (and it's) better
to be paid late than taking inadequate payment, because the Medicaid
program is already paying less than the cost to deliver Medicaid
care."
Hospitals are familiar with delayed Medicaid reimbursements.
Illinois' Medicaid backlog bill is $448.6 million, with the oldest
bill dating back to Jan. 3, said Brad Hahn, spokesman for the
state's comptroller's office. Illinois' total backlog of unpaid
bills is hovering around $4.5 billion for the same period.
"It's not a new notion that the state would pay slower," Peters
said. "So when we say, 'We would agree to extend the payment cycle,'
that's been what's more normal than a prompt payment approach."
State Rep. Patti Bellock, R-Westmont, said the House Human
Services Appropriations Committee is taking everything, including
suggestions, into consideration to meet service providers' needs.
"Well, we don't like to (delay payments), but to extend the cycle
out -- that is what the hospitals have asked us to do rather than
taking more cuts," said Bellock, a committee member. "By extending
the (payment) cycle out, (the state would save) around $250
million."
Because of the 2009 American Recovery and Reinvestment Act, the
federal government matched Illinois' Medicaid payments by 59 cents
on every dollar until March, and then the match dropped to 57 cents
per dollar. In June, the federal match returns to 50 cents, said
Hahn. The "enhanced" match has brought an additional $2.6 billion to
the state within two years.
"That's why we have to try to make up for that, and that's why we
have to come in and have to come up with such steep cuts," Bellock
said. "It was wonderful to have that money in the last couple of
years, but now it's like falling off the edge of the cliff. So we
really need to tighten our belts and do the best with what we can."
If the $463 million payment cut takes place, then Medicaid
services also would be cut, said Mark Reifsteck, president and chief
executive officer of the Southern Illinois Division of Hospital
Sisters Health System. Reifsteck oversees St. Elizabeth's Hospital
in Belleville and St. Joseph's Hospital in Breese and Highland.
"Chances are we would look to limit our exposure to that patient
population even more so, and they're already underserved," Reifsteck.
"So the reductions in payments to hospitals will just cause
hospitals to further reduce the provision of services to that
population of patients wherever they can."
Reifsteck said the state had caught up in March with its Medicaid
payments to his hospitals, even though payments started off as slow
in the beginning of the year. He did not provide a dollar amount.
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Tim Moore, chief accounting officer for Blessing Hospital in
Quincy, said he'd prefer a delayed Medicaid reimbursement rather
than cuts, which would affect the hospital's services.
"I urge lawmakers to understand that we can only bear certain
limits on extensions," Moore said. "We also have bills to pay."
Illinois still owes Blessing Hospital in Quincy about $5 million
in Medicaid payments.
Bob Rosenberger, senior vice president and chief financial
officer for Centegra Health System for the McHenry and Woodstock
hospitals, said he won't need to close programs if the additional
cuts are implemented. Rosenberger was not able to provide the dollar
amount the state still owes his hospital, but he said the state is
behind on its Medicaid payment by 60 days.
Because the McHenry and Woodstock hospitals do not rely on
Medicaid payments as much as some other hospitals in the state,
Rosenberger said a delayed payment would not be an inconvenience.
But like any other business, hospitals also need to borrow to
make up for the state's late payments.
"There's only a couple of places where you can make it up. ... Of
course you would borrow to do that," said Reifsteck, of the Hospital
Sisters Heath System. "Some hospitals don't have enough reserves to
fund their cash flow."
State Sen. John Sullivan, D-Quincy, said the idea of delaying
Medicaid reimbursements is a short-term fix.
"Of course this backlog of unpaid bills (is) part of this whole
discussion, because we aren't paying our bills from last year, and
now of course we're talking about extending the payment cycle into
next year," Sullivan said. "(And) we haven't addressed this backlog
for the current year, so it's not a good situation."
The state's backlog of bills is expected to balloon up to $8
billion by the time a new state budget goes into effect in July,
according to the comptroller's office.
Kent Redfield, professor of political studies at the University
of Illinois at Springfield, said delaying Medicaid payments is not a
good idea, given the state is in so much debt already and needs to
make significant cuts for next year's budget.
"You can't avoid the pain. It's better to get it over it now," he
said.
[Illinois
Statehouse News; By MARY J. CRISTOBAL]
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