Federal approval of plan to protect $3.5 Billion for Rural Hospitals Ensures access to quality health care for 3 million Illinoisans

“I supported Senate Bill 1773 to help our rural hospitals keep their doors open in many of the communities I represent,” said Rep. Brad Halbrook.

The plan was created with Senate Bill 1773, bipartisan legislation that the governor signed in March. It ensures the state will continue to receive federal matching funds to offer services for Medicaid beneficiaries through the Hospital Assessment Program, which brings in $3.5 billion annually. The new program takes effect July 1.

Legislators worked with the Illinois Health and Hospital Association and the Department of Healthcare and Family Services (HFS) to redesign the program, create a more equitable reimbursement process, and ensure more efficient use of taxpayer dollars.

“The Department is pleased that the federal government has approved this plan, which will mean that dollars follow services for Medicaid patients more closely,” said Teresa Hursey, Interim Director of HFS. “The new program reflects the reality that healthcare delivery has changed dramatically over the last ten years, and it draws down as much federal revenue as we believe is permissible.”

Prior to the new program, the state used old data sets, which were sometimes based on care that was provided as far back as 2005, to reimburse hospitals for Medicaid services. The new model applies updated data and also ensures that more of the reimbursements are based on actual services hospitals provide.

It also dedicates more than $260 million to help hospitals transform their operations to better serve their communities, such as offering more urgent and outpatient care.