The Senate recently passed legislation (Senate Bill 1773 and Senate Bill 1573) to update a Medicaid assessment system that ensures that hospitals across the state will continue to receive federal funding. The program is fully financed by hospitals and the federal government—there is no cost to the state.

Passed with overwhelming support, the bipartisan legislation authorizes the continuation of the Hospital Assessment Program and enhances Medicaid managed care transparency and oversight. The redesigned Hospital Assessment Program will bring in $3.5 billion annually to support access to healthcare for more than three million Illinoisans who are insured by Medicaid. Key components of the legislation include:

• Modernizing the assessment program with payments based on updated patient utilization data, replacing current payments based on obsolete data from more than 10 years ago;
• Preserving and rationalizing $850 million in Affordable Care Act funds that the State has secured and maximized for the past four years;
• Moving more than $600 million from static, fixed payments to dynamic claim-based payments – so the “money follows the patient”;
• Recognizing and incentivizing the shift to more outpatient services;
• Including a process and $263 million fund to assist hospitals in transforming and adjusting to changes in their environment, so they can continue to serve their communities;
• Increasing transparency and accountability on Medicaid MCO claims processing and payment performance; and
• Sunsetting after two years to serve as a checkpoint to evaluate the program’s effectiveness.