Illinois’ Medicaid hospital-funding plan gets federal OK

SPRINGFIELD, Ill. – The federal government has agreed to match billions of dollars in Medicaid funding for Illinois hospitals around the state.

Gov. Bruce Rauner said Thursday that Washington approved the state’s Medicaid funding model known as the hospital assessment program. The program requires hospitals to pay a tax to the state that is then matched by the federal government. That generates $3.5 billion for the state that is then distributed to the hospitals.

Illinois revamped the program this year to answer federal requirements that more Medicaid patients be covered by cost-cutting managed-care organizations. The redesigned program also funnels most of the money to hospitals in low-income communities that serve more Medicaid-dependent patients.

Rauner says federal approval is a “critical step” in ensuring hospitals can “keep their doors open in underserved communities.”