Budget crisis continues to short Illinois hospitals of millions

A state budget crisis has created an extremely challenging operating environment for Illinois hospitals, and healthcare leaders are feeling an enormous amount of pressure to keep their facilities afloat in such a difficult market.

Hospital executives told Crain's Chicago Business that the reimbursement tap is unpredictable, and they're forced to make tough decisions. For instance, hospitals are forgoing patient care investments to pay for software and people to manage the mounting stacks of bills.  

Illinois' managed care system is making matters worse for hospitals, as reimbursements must filter through one of the state's 13 managed care companies before flowing to hospitals. If the managed care companies don't get paid then neither do the hospitals. The state owes these insurers at least $570 million, according to Crain's.

University of Illinois Hospital & Health Sciences System CFO Michael Zenn told Crain's that his system is waiting for $67 million in payments from managed care companies. The Chicago-based system has contracts with six of the 13 managed care companies in the state.

Unpaid bills from the state are also taking a toll on Chicago-based Norwegian American Hospital. About three-fourths of Norwegian's patients are on Medicaid, and the hospital is waiting on about $4.3 million in payments from managed care companies.

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