Illinois General Assembly approves Medicaid funding plan

SPRINGFIELD, Ill. (AP) - Illinois Gov. Bruce Rauner is expected to sign a $3.5 billion Medicaid funding plan for hospitals around the state after the proposal was quickly approved Wednesday by the House and Senate.

Both chambers approved legislation to update its current hospital assessment program in response to federal pressures mandating more Medicaid patients be covered by cost-cutting managed care organizations.

Rauner spokesperson Rachel Bold said the legislation is designed so Medicaid payments are distributed based on where services are rendered. She added that the redesign also "brings as much federal revenue into Illinois as possible."

The House voted 107-7 in favor, and the Senate approved the funding in a 53-3-1 vote.

Every hospital pays an assessment matched by the federal government. The state takes a $750 million cut and the rest is distributed back to the hospitals as a way to make up for Medicaid funding gaps.

The revamped program will use updated patient data from fiscal year 2015 and make some payments dependent on reimbursements from the managed care system. The legislation also includes added oversight tracking managed care organizations, responding to opponents who say the organizations often deny claims or delay payments.

The Illinois Health and Hospital Association, which represents 200 hospitals around the state, said the legislation preserves access to quality healthcare especially in the state's more impoverished areas.

But two hospitals on Chicago's South Side already said that they do not receive enough funding under the assessment redesign to remain open. Roseland Community Hospital, for example, said it received a $6.5 million cut.

Sen. Emil Jones III, who represents the district where Roseland is located, has been a fierce critic of the modernized formula and voted "present" Wednesday. He said that while the hospital "lost heavily" under the redesign, he received commitments from all four caucuses to find legislative solutions "to allow Roseland to continue to provide valuable health care services to one of the poorest and most vulnerable communities in Illinois."

The legislation now goes to the governor for his signature. From there, it must be approved by the federal government before the current assessment program ends June 30. According to the Centers for Medicare and Medicaid, the organization recommends the assessment proposal be submitted by April 1 in order to gain the federal OK before the current program expires.