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May 19, 2006

Gov. Blagojevich signs law directing Treasurer’s office to release hundreds of millions of dollars for Medicaid providers, reduce payment cycle by 20 days
If Treasurer’s Office releases additional funds budgeted for Fiscal Year 2006, the state can generate a total of $900 million for providers before June 30th

CHICAGO – Governor Rod R. Blagojevich signed Senate Bill 14 into law today requiring the Illinois State Treasurer’s Office to stop holding up hundreds of millions in fund transfers that were approved a year ago to pay down bills owed to state Medicaid providers.  The fund transfers that have been blocked by the State Treasurer qualify for federal matching funds and would generate a total of $900 million for payments to Medicaid providers, and would bring down the payment cycle by 20 days to approximately 56 days. 
“Medicaid providers across Illinois are providing critical healthcare to working parents, children and seniors and shouldn’t have to wait any longer to receive the payments they’re owed,” said Governor Blagojevich.  “Holding up these funds has put an unnecessary squeeze on providers and jeopardized the patients they serve. Our doctors, nursing homes and hospitals in Illinois deserve better.”
The new law directs the Treasurer’s Office to immediately release $250 million in fund transfers from fiscal years 2005 and 2006, which will generate a total of $500 million through federal matching dollars. The fiscal year 2006 budget contains an additional $200 million in fund transfers, which – if Treasurer Topinka does not hold up – will generate another $400 million, for a total of $900 million for Medicaid providers to be paid out before the end of the current fiscal year. 
In fiscal year 2005, the General Assembly voted nearly unanimously to transfer surplus money from various special funds to help balance the state’s budget. The General Assembly also approved such transfers in fiscal year 2006. These transfers were intended, in part, to pay down bills owed to Medicaid providers. By holding up these transfers, the Treasurer’s actions have threatened to throw the state’s budget out of balance, while placing an undue burden on Medicaid providers throughout the state.
“The Treasurer has placed an unfair burden on Medicaid providers across the state by holding up the fund transfers that should be made available now,” said Rep. Jay Hoffman of Collinsville, the sponsor of the bill.  “With the Governor’s signature today, we are one step closer to releasing the funding that with a federal match will bring $500 million in payments to providers for the care they have given to Illinoisans.”
When a health care provider gives services to a Medicaid beneficiary, that provider bills the Department of Healthcare and Family Services (HFS) either electronically or on paper, submitting a claim through the department.  The payment cycle begins when HFS receives a completed claim either electronically or in hard copy.  After processing, the claims are held until HFS has the resources through appropriations and can voucher it for payment by the Comptroller.   When payment goes out by the Comptroller, the payment cycle ends.

$900 Million in Fund Transfers will Pay Down Medicaid Bills
The signing of Senate Bill 14 and remaining FY06 fund transfers will enable Illinois to pay down $900 million in Medicaid Bills.
Dollars in Millions
Senate Bill 14
Remaining FY06 Fund Transfers
State Funds
 $              250
 $            200
 $        450
Federal Match
 $              250
 $            200
 $        450
Total Funds for Medicaid Providers
 $             500
 $           400
 $       900


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