Illinois Medicaid Proposal Would Slash Hospital Funding by $500M

Illinois Gov. Pat Quinn has released a plan that would cut $2.7 billion out of the Medicaid program, and 75 percent of the plan focuses on increasing cuts and reducing Medicaid rates to hospitals and healthcare providers.

Illinois healthcare providers would see rate reductions totaling $675 million, which is 25 percent of the plan. According to the Illinois Hospital Association, roughly $350 million of those reduced Medicaid rates would affect hospitals. In addition, there would be cuts, reductions and efficiencies to 58 separate Medicaid items totaling $1.35 billion (50 percent of the proposal), and roughly $150 million of those reductions would impact hospitals.

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Some of the cuts, reductions and efficiencies in the 58 separate items include a redesigned system focused on coordinated care, controls on the use of Medicaid services to prevent "overuse or waste" and the elimination or reduced coverage of certain optional populations and services.

Other components of Gov. Quinn's Medicaid proposal include boosting revenue through a $1 per pack increase in the cigarette tax and a 100 percent federal match funding from the increased cigarette tax. Each of those proposals would bring in $337.5 million.

The IHA and several other hospital groups denounced the state's proposal, saying patient care will be adversely affected. "While we commend the governor for taking some positive steps — including incorporating several of IHA's savings alternatives — the proposal is still too drastic and too rash to impose on the state's already fragile healthcare system," IHA President and CEO Maryjane Wurth said. "Simply engaging in a math exercise to fill a budget gap is the wrong approach that will hurt patients."

The Association of Safety-Net Hospitals — which includes seven Chicagoland area hospitals, all of whom rely heavily on Medicaid patients — said their institutions are already at a "breaking point," and the outlined Medicaid cuts would devastate the state's at-risk communities. "Significant cuts will close some of our hospitals," the association said in a statement. "Others will drastically scale back critical services. All will result in job losses. Twelve thousand jobs are on the line in our hospitals alone. We have choices. It's time to make the right ones."

More Articles on Illinois Medicaid:

Illinois Community Hospitals Petition Governor to Lower $2.7B Medicaid Cuts

Illinois to Slash Medicaid by $2.7B

Illinois Medicaid Could Face $21B "Crisis" by 2017

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