Hospital Assessment Fact Sheet

January 2018

Hospital Assessment Program: Preserve Access to Care,
Modernize the Payment System, Preserve Federal Medicaid Funding

Issue: On June 30, 2018, $3.5 billion in total annual Medicaid funding sunsets under the Illinois law authorizing the Hospital Assessment Program. This funding includes:

  • $2.8 billion for Medicaid hospital services, out of about $6 billion annually; and
  • $750 million for Medicaid non-hospital services.  

IHA Position: IHA is working with its diverse members, the Illinois Department of Healthcare and Family Services (HFS), the bipartisan State Legislative Medicaid Work Group and other stakeholders, to reach consensus on legislation to reform and modernize Illinois’ outdated Hospital Assessment formula. This plan is being crafted for consideration by the General Assembly in January 2018. Legislative action is needed to allow time to obtain federal CMS approval and implementation by July 1, 2018.

Background:

  • Under the current Hospital Assessment Program, hospitals pay an assessment to the State of about $1.4 billion per year. These funds are used to help assure access to services for Medicaid beneficiaries by generating a federal match to produce about $3.5 billion in annual Medicaid funding.
  • The $2.8 billion in Medicaid hospital payments financed by the Hospital Assessment Program consists of: 1) $1.9 billion in hospital access payments under the assessment programs established in 2008 and 2012; and 2) $850 million in hospital ACA access payments, which began in 2014.
  • Illinois receives LESS federal funding per Medicaid beneficiary than any other state in the U.S. The Hospital Assessment Program is critical to supporting the state’s Medicaid program and assuring access to quality care for Medicaid beneficiaries and all Illinoisans.
  • Illinois’ current Hospital Assessment payments are based on outdated data from 2005 and 2009 and this new proposal modernizes and updates the formula utilizing the most recent healthcare utilization data available (2015).
  • Time is of the essence. IHA, HFS and the Legislative Medicaid Work Group are engaged in discussions on a redesigned Hospital Assessment Program, which will require state legislation and approval by federal CMS, which typically takes several months.

Preserve Access to Care and Federal Matching Funding for Illinois
Support a Modernized Hospital Assessment Program