On June 16, the Governor of Illinois Pat Quinn signed legislation to reform the State’s Medicaid system. The legislation will modernize the outdated Medicaid system, restore dental and podiatry care, and establish new protections for clients and healthcare providers. The law will benefit the State’s three million residents who currently receive Medicaid as well as benefit the state’s 141 hospitals and 1,200 nursing homes.
Under the new law, The Quinn Administration will submit a plan for approval by the federal government to provide about $400 million annually for hospitals serving newly eligible Medicaid recipients. The $400 million will be distributed to hospitals throughout the state and will mirror the two current hospital assessment distributions.
Over the past three years, the Governor and the Illinois Department of Healthcare and Family Services worked with healthcare providers and legislators to update Medicaid’s outdated hospital payment system. The law creates uniform requirements for Managed Care Organizations and Accountable Care Entities.
The law includes an additional $10 million to support Illinois safety net hospitals during the transition. The safety net hospitals are a critical piece of the Medicaid system and often serve as anchors for low income communities.
The law’s hospital rate reforms establish a new rate methodology effective July 1, 2014 and sets aside $290 million to help hospitals transition to the new rate system. It also extends the hospital assessment programs for another four years to July 1, 2018 that will continue to provide $2 billion in payments to hospitals to ensure their stability.