Illinois hospitals serve a critically important role in Northwest Illinois communities. Not only is healthcare delivery one of the largest industries representing thousands of jobs in our region, they are also our frontline healthcare heroes in the fight against COVID and other communicable diseases.
On July 7, Governor JB Pritzker signed into law a bipartisan piece of legislation which I was proud to support for our hospitals and the communities they serve. Senate Bill 2541 renewed the Hospital Assessment Program and represented broad bipartisan agreement on issues that relate to healthcare delivery, reimbursement rates, insurance rates and improving access to care for patients.
The Hospital Assessment Program is a $3.8 billion program that will bring in over $250 million additional federal dollars to the state. More than 200 Illinois hospitals pay into the fund, triggering additional contributions from the federal government. The money is then redistributed to hospitals to offset the cost of treating patients on Medicaid. The joint federal and state health insurance system pays hospitals less than Medicare or commercial insurance.
The hospital industry says assessment program funds are needed by all hospitals, regardless of size and payer mix, to support Illinois’ severely underfunded Medicaid system. According to data from the Illinois Health & Hospital Association, the State of Illinois spent an average of $5,436 per Medicaid beneficiary in 2015, less than all but one other state—Nevada. The nationwide average was $7,556.
The Illinois Department of Healthcare and Family Services (HFS) worked with legislators and stakeholders to distribute funding in a manner that increased funding to all hospitals in Illinois, while prioritizing hospitals that serve a high number of Medicaid patients. The program consists of $450 million in additional federal funding for hospitals since the last assessment four years ago.
The changes to the program also help make the Medicaid program more responsive to the needs of individual members about where they can seek care. Funding is reserved to improve access to health care services, including diagnostic and treatment services in under resourced communities across Illinois. Payment to hospitals will be more transparent and the billing system will be simplified for some services like laboratory tests performed by hospitals.
Northwest Illinois hospitals in our region will receive nearly a million dollars more in funding under this new model, including FHN Memorial in Freeport and Midwest Medical Center in Galena. With recent challenges to our hospital networks because of COVID, suspension of many procedures, and resulting layoffs of employees, this funding model is welcomed support for an industry representing one of the largest number of employees in our region.
Frontline healthcare workers are our heroes. This bipartisan legislation improves the ability for hospitals to retain and grow jobs, serve patients and provides a measure of equity needed within our healthcare delivery system. I was proud to support it and prouder to see it become law on July 7.