Governor Quinn Signs Legislation to Reform Illinois’ Medicaid System

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Landmark New Law Modernizes Outdated Medicaid System, Restores Dental and Podiatric Care to Patients, Supports Affordable Care Act

CHICAGO – Governor Pat Quinn today signed legislation to modernize and improve Illinois’ Medicaid system. The new law will benefit Illinois’ three million residents who currently receive Medicaid, as well as the state’s 141 hospitals and 1,200 nursing homes by restoring adult dental and podiatric care, providing increased protections and more. The legislation is part of Governor Quinn’s agenda to ensure all people have access to quality healthcare and improve the health and wellbeing of the people of Illinois.

Under Governor Quinn’s leadership, more than 566,000 people across Illinois now have healthcare coverage through the Affordable Care Act (ACA). This includes more than 349,000 people enrolled in Medicaid under the ACA expansion.
“This legislation is a critical step forward as we continue to reform our Medicaid system,” Governor Quinn said. “The reforms will help us modernize and streamline our Medicaid system to ensure we are working efficiently and effectively on behalf of taxpayers. Millions of Illinois residents depend on Medicaid for their healthcare needs and this law will help ensure we provide the services and protections they deserve.”

Sponsored by State Senator Donne Trotter (D-Chicago) and State Representative Greg Harris (D-Chicago), Senate Bill 741 reforms Illinois’ nearly 20-year-old Medicaid system over a four-year transition period. The new law restores previously authorized adult dental care and podiatry services, and establishes new protections for clients and healthcare providers. It also codifies policy guidance to provide stability for hospitals and nursing homes.

The legislation also aligns Illinois law with federal law, providing Medicaid coverage for children who have been without private insurance for three months. Previously, Illinois left children without health insurance for 12 months before Medicaid coverage was allowed.

Under this law, the Quinn Administration will submit a plan for approval by the federal government to provide approximately $400 million annually in new federal dollars for hospitals serving newly eligible Medicaid recipients. The $400 million will be distributed to hospitals throughout the state and will mirror the two current hospital assessment distributions.

Over the past three years, Governor Quinn and the Illinois Department of Healthcare and Family Services (HFS) worked with healthcare providers and legislators to update Medicaid’s outdated hospital payment system, which did not keep up with the changing healthcare landscape. The legislation makes important reforms by creating uniform requirements for Managed Care Organizations and Accountable Care Entities, providing stability for hospitals and nursing homes and giving a huge boost to the redesign of Medicaid.

“This law was crafted with the input of everyone it affects,” HFS Director Julie Hamos said. “It’s a modernization of an old system: it gives much greater protections for our clients, streamlines hospital and nursing-home reimbursement and clarifies the relationships among managed care entities.”

The law includes an additional $10 million to support Illinois’ safety net hospitals during the transition. The safety net hospitals are a critical piece of the Medicaid system and often serve as anchors for low-income communities.

“We thank the Governor for signing Senate Bill 741 and commend the Administration and legislators who worked tirelessly on this important legislation,” Maryjane Wurth, President and CEO of the Illinois Hospital Association said. “This significant legislative package makes a critical investment in healthcare in Illinois that will create jobs and help grow our economy. This is a very good day for healthcare, for patients and for our economy.”

The law’s hospital rate reforms establish a new rate methodology effective July 1 of this year, and sets aside $290 million to help hospitals transition to the new rate system. It also extends the hospital assessment programs for another four years to July 1, 2018, continuing $2 billion in payments to hospitals to ensure their stability.

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