Deep Blue Illinois Blog

Feds’ health care cash not a moment too soon December 8, 2008

Late last week the federal Centers for Medicare and Medicaid Services (CMS) gave final approval to my top legislative priority this past year, a five-year, $4 billion funding plan which provides Illinois hospitals and other health care and human service providers with a critical infusion of new Medicaid dollars. Beginning July 1, 2009, hospitals will see an extra $640 million plus each year and other health care and human service providers, such as long term care facilities and not-for-profits serving the mentally ill and developmentally disabled, will receive an additional $130 million annually over the course of the plan.

This good news from Washington came not a moment too soon. Without this desperately needed new health care cash, many hospitals in Illinois that serve patients in under-served areas — particularly those “safety net” institutions like Mt. Sinai on Chicago’s West Side and Mercy and Holy Cross Hospitals on the city’s South Side, high-volume Medicaid academic institutions like the University of Chicago Medical Center, Northwestern Memorial Hospital and Rush Medical Center, and countless Downstate hospitals — would have been forced to either close their doors or severely curtail services without this massive federal funding boost.

How does this work? In short, each of the state’s roughly 200 hospitals pays a voluntary assessment based on gross revenues minus public reimbursements like Medicare and Medicaid, which are then pooled and leveraged for new matching federal Medicaid funds that come back to the state. Those new dollars are then re-distributed based on where the needs are the greatest, both demographically and based on what areas of care lack funding. The streams of federal dollars ultimately go toward paying for trauma care, OB-GYN, in-patient psychiatric care and rural health grants, just to name a few.

This successful effort is the third one of its kind since 2003, and by far the most ambitious both in terms of the amount of new federal Medicaid dollars and the length of time under which the plan will operate. On June 30, 2008, Illinois concluded a similar three-year, $1.8 billion initiative, and in 2004 the state realized roughly $500 million from a plan passed into law and approved by federal regulators. Of the previous three hospital assessment plans that have become law since 2003, the current initiative was by far the most redistributive, which not only ensured swifter federal approval but also guaranteed that more of the money would go to the most economically distressed communities. Under the federal guidelines established for these plans, the more Robin Hood the better, a key principle of this program regardless of which party occupies the White House.

One final note: I was the chief sponsor of this legislative proposal in the Senate, and on more than one occasion I joked with the chief House sponsor, Majority Leader Barbara Flynn Currie (D-Chicago), that we were traveling down a very narrow, sniper-free corridor in our negotiations at the State Capitol. At a time when legislative breakthroughs have been few and far between due to the well-documented war zone atmosphere, it was quite an accomplishment. But it also showed that if we stay focused on our core objectives and deflect the political conflicts off to the side, we can indeed bring about meaningful policy change that impacts hundreds of thousands — if not millions — of lives. Given the current economic uncertainty, it comes not a moment too soon as hospitals and other health care and human service providers continue seeking oxygen as they struggle with providing access to affordable quality health care.