Illinois hospitals that primarily treat low-income patients on Medicaid may have to lay off employees or shut down if state leaders do not pass legislation needed to continue funding for Medicaid patients, according to a state hospital association.
These hospitals are called “safety-net” hospitals and their leaders are concerned because a major funding program for these hospitals is scheduled to expire on June 30.
Hospitals across the state pay an “assessment,” or tax, based on their size, and this money is matched by the federal government. Then the money is redistributed to hospitals based on the number of Medicaid patients they serve.
In 2016, hospitals paid $381.3 million in assessments for the program and the federal government matched that amount for a total of $762.6 million for the program, according to the Association of Safety-Net Community Hospitals, which has 23 members in Illinois.
“Without a renewed assessment program by July 1, the safety-net hospitals warn there could be layoffs or hospital closures that would leave many without jobs or proper health care because they only receive public funding — not private insurance — to provide care,” the hospital association said in a news release.
Without us, the thousands of people we serve each year likely would not have access to critical quality health care.
Larry McCulley, president and CEO of Touchette Regional Hospital
Touchette Regional Hospital at 5900 Bond Ave. in Centreville, is the only safety-net hospital in the metro-east.
So far, layoffs at Touchette have not been discussed, according to Larry McCulley, the president and CEO of Touchette.
“We believe that the most recent modeling takes the right steps to ensure the services and operations for the safety nets will be maintained at current levels,” McCulley said in a statement. “At this point we are just seeking to reinforce the importance and need to have the new assessment model account for the social, health and economic conditions that safety nets provide in their service areas."
McCulley said Touchette served almost 34,000 patients in 2016 and 21,000, or about 60 percent of them, were on Medicaid.
Safety-net hospitals, like Touchette, often serve a sizable volume of a “very vulnerable population,” including people who need behavioral health services, McCulley said in his statement.
“Without us, the thousands of people we serve each year likely would not have access to critical quality health care,” McCulley said.
State Rep. LaToya Greenwood, D-East St. Louis, said if the assessment program is not continued, the consequences would be “devastating” for Touchette and the metro-east.
“I’m sure that layoffs would happen and cuts in crucial … services will happen,” Greenwood said.
“They’ve been able to provide quality health care in our neighborhood so to lose that or to threaten to reduce the services that’s offered to communities like ours, I think it would be devastating,” she said. “I just think it’s vital to keep that operating and get the funds that they need to stay in operation.”
Touchette has 540 employees and has an estimated $67 million direct impact on the local economy, McCulley said. The hospital receives about 65 percent of its money from Medicaid payments.
The Association of Safety-Net Community Hospitals is calling for state lawmakers and Gov. Bruce Rauner to take action immediately since the assessment program ends June 30 and previously it took the federal government over a year to approve the matching funds for Illinois.
The association urged lawmakers and Rauner to do the following:
▪ Agree on a renewed hospital assessment that also includes a much-needed funding increase for safety-net hospitals.
▪ Provide a “bridge” from the current assessment to the new one that covers the time it takes for the federal government to approve the new one.
▪ If those two requests cannot be met, provide a safety net for the safety-net hospitals to prevent widespread layoffs and closures.
Rachel Bold, a spokeswoman for Rauner, said John Hoffman, a spokesman for the Illinois Department of Healthcare and Family Services, would address questions about the assessment program.
Hoffman said his agency has been meeting regularly with the Illinois Health and Hospital Association, which developed the hospital assessment program model now under consideration.
The Rauner Administration is a strong advocate of our safety-net hospitals and will work to ensure their viability to support our communities in the years ahead.
John Hoffman, spokesman for the Illinois Department of Healthcare and Family Services
“The Rauner Administration is a strong advocate of our safety-net hospitals and will work to ensure their viability to support our communities in the years ahead,” Hoffman said in an email.
Hoffman said the Department of Healthcare and Family Services is “committed to drawing down as much federal revenue as it can, within the boundaries of what is permissible under federal law, to support our hospitals.”
The House Appropriations-Human Services Committee is scheduled to discuss the assessment program on Tuesday in Springfield. McCulley has been in Chicago and Springfield advocating for Touchette and the continuance of the safety-net funding.
Roseland Community Hospital, a safety-net hospital in Chicago, laid off 35 employees and reduced pay for its nonunion staff earlier this month, the Chicago Tribune reported.