Hospital Assessment Redesign

What’s new?

  • The Department of Healthcare and Family Services (HFS) goal was to implement the new assessment at the beginning of the state’s fiscal year which starts July 1, 2018.
  • While HFS has been working diligently to implement the new assessment, there was a temporary hold on all claims starting July 1 until the new system is in place to avoid complicated reconciliation of payments to providers.
  • On Friday, June 22 just days before the June 30th deadline, federal Centers for Medicare & Medicaid Services (CMS) approved the renewal of the state’s hospital assessment program.
  • On March 12,Governor Bruce Rauner signed legislation on the redesign of the Hospital Assessment Program and legislation on Medicaid managed care transparency and oversight.
  • On February 28, the Illinois General Assembly overwhelmingly approved, final bipartisan legislation on the Hospital Assessment Program redesign (SB 1773) and Medicaid managed care transparency and oversight (SB 1573).
  • The process for approval before this new formula can be implemented is:
    • Legislation adopted by the state legislature (complete),
    • Approval by the Governor (complete),
    • HFS submission to federal CMS (complete), and
    • CMS approval (complete).

What’s the issue?

  • All current non-claims Medicaid funding mechanisms for Illinois hospitals (transitional / supplemental payments, hospital assessments, and Affordable Care Act payments) are scheduled to “sunset” June 30, 2018.
  • These payments represent over 50 percent of all payments made to Illinois Hospitals, and significantly more for Safety-Nets — over $2 billion annually to hospitals and almost $800 million to the state.
  • Hospital payment restructuring needs to occur by June, 2017, in order for hospitals to avoid budgeting issues and regulatory approval risk. These payments are the Safety-Net Hospitals’ lifeblood and, thus, imperative to offset the low cost of Medicaid rates paid to Illinois hospitals.
  • The State of Illinois hasn’t had a legislature-approved budget since the start of 2016. Delaying this has led to delays in other financial talks.

Why does it matter?

  • Without knowing the details of the funding mechanisms, it will be nearly impossible to create hospital budgets for 2018. Calculating reimbursement rates, ACA supplements, and hospital assessments (funds that make up the gap between cost of services and what Medicaid reimburses).
  • Safety net hospitals, or those hospitals that provide care to low-income and uninsured people without concern to their ability to pay, depend on these non-claim based payments, as they can provide over 50% of their operating costs.

What is the AMITA Health perspective?

  • We have safety net hospitals. Mercy Medical Center, Saints Mary and Elizabeth Medical Center and Glen Oaks Hospital are safety net hospitals, and receive this funding to do important work in their communities.
  • This tradition is our mission. Providing quality health care for under-served, poor and vulnerable communities is core to our faith-based mission.  Receiving funds from this Medicaid funding mechanism allows Presence to continue fulfilling its mission.
  • It allows us to be fiscally responsible. We cannot create a budget nor receive approvals from our creditors without being able to factor in this Medicaid funding mechanism. If we count on having it and it is pulled or drastically changed, we could be under-budgeted as a system, and our safety net hospitals especially would have a difficult time filling the gap.

Featured News

Featured news includes articles from multiple viewpoints and is designed to keep you abreast of the current debate around this issue. This information should not be construed as our point of view.

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Bellock applauds bipartisan effort on hospital assessment program worth $3.5 billion in federal funding

Rep. Patricia Bellock (R-Hinsdale) stood proudly at the podium Monday during a press conference for the signing of SB1773, establishing a new and revised hospital ...

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Combined hospital bed and outpatient tax increased by $140 million annually under new assessment program

Surrounded by Republicans and Democrats, Gov. Bruce Rauner on Monday signed legislation that updates the state’s hospital assessment program, an effort that could bring $3.5 ...

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