Proponents Urge Quick Renewal of Illinois Hospital Program

CHICAGO — Warning that hospitals can’t afford to lose the infusion of additional Medicaid funds — nearly $2.3 billion over the last five years — that has come from the Illinois Hospital Assessment program, proponents called for quick action on legislation renewing the program at a hearing last week. “There are too many hospitals across the state which desperately need this critical infusion of federal health care dollars in order to guarantee that our communities will continue to have quality health care that is accessible and affordable,” state Sen. Jeffrey Schoenberg, D-Evanston, said at the hearing. Schoenberg sponsored the legislation that enacted the program and as chairman of the Senate Appropriations II Committee convened the hearing, the first of several planned. “The legislature and [Gov. Rod Blagojevich] must make this issue a top priority, because without this additional federal funding, many Illinois hospitals and the communities which they serve will be in critical condition,” he added.The funding has proven especially crucial to rural hospitals, facilities in poorer communities, and those with high Medicaid caseloads, many of which struggle to remain afloat as the ranks of the underinsured and uninsured have grown in recent years amid limited federal and state reimbursements. Hospitals have also come to rely on the funds to boost their balance sheets. One rating agency last year cited the delay in Resurrection Health Care’s receipt of assessment funds, due to a delay in federal approval for the most recent program, as a factor in its downgrade of the Chicago system.The General Assembly enacted an initial two-year program assessing a tax on hospitals based on volume in 2004 that generated about $430 million for hospitals. The state in 2005 then adopted a three-year program that leveraged more than $1.8 billion, with the state receiving about $600 million annually of which $470 million goes to hospitals. The remaining revenue goes to nursing homes, long-term facilities, and providers of services for the developmentally disabled. The current program expires in July and the Federal Centers for Medicare and Medicaid Services must approve any new one. Schoenberg said the federal landscape has shifted since the last program was approved and CMMS has proposed several changes to the program that allows states to leverage the additional funds that could force changes to the Illinois plan. The state is also losing a staunch advocate for the program who holds sway with the White House in former House Speaker Dennis Hastert, R-Ill., who recently announced his retirement from Congress.As supporters push for the program’s renewal, Schoenberg and hospital officials also called for quick legislative action on a supplemental bill that would allow the state to forward payments to hospitals under the final year of the current program.The state issued $1.2 billion of short-term notes in September to forward payments due under the second year of the program. However, the fiscal 2007 budget authorization allowing for the payments to be made expired because of a state delay in issuing the notes, forcing officials to tap an authorization in the fiscal 2008 budget.The Illinois Hospital Association in a statement last month called it “critical” that hospitals lobby their legislators to pass the supplemental budget appropriation, but no action has been taken. The program’s supporters fear the appropriation has been pushed to the back burner as lawmakers work on larger issues, including a new $25 billion capital budget and a Chicago area transit bailout. The state has already missed at least one payment owed to hospitals in the current fiscal year. “The delay is unconscionable. Some hospitals can’t float the assessment payments while they wait to get their payments because of their own precarious cash-flow situations,” Schoenberg said.