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Quinn’s Medicaid reduction means 5-month payment delay

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SPRINGFIELD — July is a busy month for the Quad Cities' Trinity Regional Health System when the hospital offers multiple sclerosis support groups and classes in child birth and even Pilates.

By Benjamin Yount

SPRINGFIELD — July is a busy month for the Quad Cities' Trinity Regional Health System when the hospital offers multiple sclerosis support groups and classes in child birth and even Pilates.

But Trinity's Chief Financial Officer Greg Pagliuzza said the Moline hospital may have to cut back its support groups and classes because of dwindling state funding due to Gov. Pat Quinn's order to spend $276 million less on Medicaid.

"Our total reimbursement … will drop about a half-million to a million bucks," said Pagliuzza.

Only 10 percent to 15 percent of Trinity's patients are eligible for Medicaid, which is only 8 percent, or $20 million, of the hospital's revenue, said Pagliuzza. The hospital's Medicaid costs will not change, Pagliuzza said. Trinity will just have to wait longer to be paid.

Lawmakers balanced the 2012 state budget by dragging out Medicaid payments to 110 days. Quinn's order June 30 to cut Medicaid spending will increase the payment cycle again, to 162 days. Illinois hospitals had been getting paid every 30 days because of the federal stimulus, but that stimulus expired July 1.

Many of Illinois' hundreds of other hospital were reluctant to comment about changes in Medicaid payments. The hospitals contacted by Illinois Statehouse News did not want to speak on the record.

Illinois' safety-net hospitals — those that have a disproportionate number of Medicaid patients — "will be protected," said Kelly Kraft, Quinn's budget spokeswoman, though she did not specify how quickly those hospitals will be paid. More than a half dozen safety-net hospitals existed in Illinois in 2010, though the state Department of Healthcare and Family Services said a safety-net hospital does not have a clear definition.

Kraft said the longer Medicaid payment cycle will add to Illinois' backlog of unpaid bills.

"The budget passed by the General Assembly will push $1.4 billion in Medicaid bills into next year," said Kraft.

Danny Chun, spokesman for the Illinois Hospital Association, which lobbies for hospitals in the state, said the hospitals gave their blessing to a longer payment cycle because the alternative was "unacceptable."

"Extending the payment cycle was much preferable to a blunt rate cut," said Chun. "Remember that Illinois already has extremely low reimbursement rates, cutting those low reimbursement rates even further would not be beneficial."

Illinois has not had a Medicaid reimbursement rate increase since 1995, said Chun.

Pagliuzza said Trinity Regional Medical System experiences the stark differences in reimbursement rates, because it has hospitals on both the Illinois and Iowa sides of the Mississippi River.

Iowa "is more timely. I think they pay within a normal 60 days," said Pagliuzza.

"But the payment rates are much closer to our costs. (In Illinois) we get about 70 cents on the dollar. On the Iowa side, it's more like 95 cents," he said.

And Chun said it's not just the state that is short-changing Illinois hospitals.

"Illinois is already at the lowest federal match rate for Medicaid," Chun added.

Illinois had been receiving more federal money for Medicaid, but the enhanced federal match ended July 1, when the federal stimulus expired. That match, for example in June, allowed Illinois to use $365 million in an enhanced match to pay $1.8 billion in Medicaid bills.

"We were getting over 60 percent reimbursement," said Mike Claffey a spokesman for the state Department of Healthcare and Family Services. "But now we're back down to the standard 50 percent."

Claffey said that Illinois has a history of late Medicaid payments. For example, in 2008, hospitals and doctors were waiting 180 days or more for payment.

"No one should be surprised by the reality of the Medicaid system in Illinois," said Claffey.

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