Hospitals make a valid case for first Medicaid rate increase in 28 years

Illinois hospitals are asking the General Assembly to provide more help meeting the increasing costs and demands of serving Medicaid patients.

As Illinois continues to wrestle with burgeoning costs of Medicaid for citizens and noncitizens alike, another struggle persists for the hospitals called on to serve them.

Legislation presently simmering in a Senate committee seeks to help.

Senate Bill 1763, sponsored by Arlington Heights Democrat Ann Gillespie and Rockford Republican Dave Syverson along with more than two dozen co-sponsors in a true bi-partisan coalition, calls for the state’s first increase in Medicaid reimbursement rates to hospitals from the General Revenue Fund since 1995. Among other provisions, the legislation calls for a 20% increase to hospital Medicaid base rates, with additional considerations for institutions serving vulnerable communities.

Illinois’ Medicaid program, the single largest insurer in the state, covers almost a third of all hospital patients in Illinois and reimburses hospitals only about 80% of the cost of care. Hospitals note that they are called upon to serve more Medicare patients than ever before and point to a host of factors that have pushed up their costs over the years, all exacerbated by the demands of the pandemic.

“Illinois’ Medicaid program, the single largest insurer in the state, covers almost a third of all hospital patients in Illinois and reimburses hospitals only about 80% of the cost of care. Hospitals note that they are called upon to serve more Medicare patients than ever before and point to a host of factors that have pushed up their costs over the years, all exacerbated by the demands of the pandemic.”

—  The Daily Herald

They argue persuasively that they need and deserve some relief. Without it, their alternatives are limited and generally unpleasant for everyone – basically, reduce or eliminate some important specialized services or, in dire cases that are already occurring in underserved and low-population areas, shut down altogether.

The proposal’s cost to the state is not insignificant. Although still in negotiations between lawmakers and stakeholders, the cost is expected to be $175 million if the increase takes effect on Jan. 1, midway through the next fiscal year, and $350 million for the full 12 months of fiscal 2025. But, considering the degree of need and lawmakers’ frequent assertions that the state’s revenue picture is brightening, those numbers also are not outrageous out of an annual budget that hovers around $51 billion.

State leaders appear sympathetic. Gov. JB Pritzker alluded to the possibilities of increased reimbursements in budget discussions just this week. But time also is growing short. The legislative session was scheduled to end last Friday, and as of last week, the bill still hadn’t left the Senate’s Assignments Committee. So, it still has to get through that chamber and then move to the House.

Given the General Assembly’s proven, if not necessarily welcome, habits of successfully pushing through legislation in its waning hours, that is not an unmanageable timetable. It is conceivable SB 1763 still could make it to the governor’s desk before the session’s end, and we hope it does.

Medicaid provides a critical safety net for tens of thousands of Illinoisans of all ages who would have no access to health care without it. Key to the foundation of this care are the hospitals and medical professionals who provide it. It is only reasonable that keeping that foundation strong remain among the priorities of state funding.

The Daily Herald

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