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IHA Urges Lawmakers to Reject $463M in Medicaid Cuts

John Commins, for HealthLeaders Media, May 12, 2011

Illinois state lawmakers are being urged to reject $463 million in proposed cuts to Medicaid payments that the Illinois Hospital Association says would cripple healthcare delivery and jeopardize patient access to care.

"These drastic cuts are wrong and unnecessary, and will only harm patients, hospitals, and the healthcare delivery system," IHA President Maryjane A. Wurth said in a media release. "Many hospitals across the state are already struggling to survive in the current economic downturn." The cuts are detailed in House Amendment #1 to House Bill 3717 – which was filed late Tuesday.

Late Wednesday the Illinois House Appropriations-Human Services voted 13 to 1 (and one present) to send its human services budget proposal, House Bill 3717, to the House floor. The proposal (which is a total of just under $12 billion) includes the Medicaid cuts.

Wurth pointed to a recent IHA survey that found that 90% of hospitals would be challenged to meet day-to-day operations, and nearly two-thirds would have to cut services and lay off staff if $300 million in Medicaid cuts were imposed under Governor Pat Quinn's budget plan. Quinn, elected in 2010, is a Democrat.

Illinois lawmakers are scrambling to fill a budget shortfall of between $1.5 billion and $2.4 billion by the end of May. A Senate budget bill calls for about $300 million in Medicaid cuts.

An IHA analysis this week found that the Medicaid cuts of $463 million, coupled with a $200 million cut to hospitals through proposed reductions to the workers' compensation medical fee schedule would increase by nearly 40% the number of hospitals operating in the red. That would mean nearly half of Illinois' 200 hospitals would be operating at a loss, IHA said.

The Medicaid cuts would be in addition to the $8 billion in federal Medicare reductions to Illinois hospitals that began last year under the healthcare reform law and that continue for another nine years, IHA said.

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