Chicago hospital to consolidate ICU, lay off staff because insurers owe $13M


Chicago-based Loretto Hospital is consolidating its intensive care unit and laying off an undisclosed number of employees as insurance reimbursement lags, the hospital's CEO told NPR affiliate WBEZ.

George Miller Jr., CEO of the hospital that mainly treats low-income patients on Chicago's West Side, said private Medicaid insurers take about five months to reimburse the hospital. He said Loretto is owed about $13 million from insurers, including Cook County's government health insurance plan.

Under former Republican Gov. Bruce Rauner, Medicaid was largely privatized in Illinois. State hospitals and physicians have voiced frustration over the change, arguing it has delayed reimbursement and led to claim denials. Mr. Miller said about a quarter of Loretto's claims are denied by private Medicaid insurers.

As a result of the reimbursement pressure, Loretto is moving its ICU to another part of the hospital and consolidating the number of patient care floors from five to three. Mr. Miller told WBEZ he didn't know how many people would be laid off.

In an emailed statement to Becker's Hospital Review, Cook County Health said, "Cook County Health and CountyCare fully understand the importance of timely reimbursements for safety net hospitals. Since inception, CountyCare has prioritized payments to safety net hospitals and Federally Qualified Health Centers even when state payments were lagging. Since late 2018, CountyCare has worked with the safety net hospitals in its network to develop a prospective payment program based on historical claims paid to the provider. This allows a provider to be paid prior to the full adjudication of their claims and in many cases prior to the filing of any claims in a given month. Under this innovation, CountyCare prospectively pays Loretto Hospital $400,000 prior to the tenth day of each month. We are not aware of another health plan that offers safety-net providers this service."

Editor's note: This article was updated May 16 at 4:15 pm CT to include a statement from Cook County Health.

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