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April 8, 2008

Gov. Blagojevich signs law to provide additional funding for Illinois hospitals
Legislation will trigger $600 million in federal matching funds for hospitals statewide

SPRINGFIELD – Governor Rod R. Blagojevich today congratulated lawmakers and signed legislation that will provide federal matching funds to hospitals throughout Illinois. Senate Bill 1863, sponsored by State Sen. Jeff Schoenberg (D-Evanston) and State Rep. Barbara Flynn Currie (D-Chicago), will help Illinois secure $600 million in new federal funding to support critical healthcare and Medicaid services throughout Illinois.
“It is essential that our hospitals have the resources necessary to provide healthcare to people throughout Illinois.  We have already achieved two successful hospital assessment programs during recent years, and they have helped hospitals continue to provide affordable healthcare to children from low-income families, people with disabilities and seniors,” said Gov. Blagojevich.  “I would like to thank the sponsors for their hard work, and I would like to congratulate lawmakers for recognizing the importance of this bill and working together to pass it.  I am pleased to sign this legislation.”
SB 1863, is the final piece of a three-year hospital assessment program that generated $600 million in federal matching funds each year. With the signing of SB 1863, Illinois will be in position to bring the amount secured to a total of $1.8 billion in federal matching funds for healthcare.  To date, $1.2 billion in new federal funding has been generated through the program. The Department of Healthcare and Family Services is already working with numerous parties to develop another hospital assessment program for the coming years.
“This critical infusion of federal dollars will help hospitals and other health care providers ensure accessible, affordable and quality healthcare services for those who live in underserved communities across Illinois,” said Sen. Schoenberg, “Without these resources, hospitals serving residents of predominantly lower- and lower-middle-income communities in the Chicago area and those Downstate would be threatened with closing their doors or drastically cutting services to stay alive.”
“This law is critically important to hospitals all over Illinois as they work to provide affordable healthcare to our children and working families,” said Rep. Currie.  “I am proud of this bill, and I am delighted the Governor is signing it.”
“I would like to thank lawmakers for moving this important bill forward, and I also thank Governor Blagojevich for his work in achieving not one, but two hospital assessment programs so far during his administration. Before his tenure, there had not been a hospital assessment passed in more than 10 years,” said Barry S. Maram, Director of the Department of Healthcare and Family Services, which runs the state’s Medicaid program.
A hospital assessment program is a federally permissible method for states to leverage their resources, through an assessment on hospitals, in order to attract additional federal matching funds into their state healthcare systems. Revenue generated by the assessment will boost the amount the state receives in matching funds from the federal government. Each region of the state receives a substantial share of the benefits of this program, which is designed to help hospitals recoup some of the costs for providing healthcare to poor and low-income families and individuals.
In Central Illinois alone, area providers will see $60,564,040 in new funding under the law.  After this third cycle, the total for Central Illinois is over $181 million.
Federal approval for any hospital assessment program must be secured from the Center for Medicare and Medicaid Services (CMS) in the U.S. Department of Health and Human Services, in order to generate the federal matching funds. During the last hospital assessment program, Illinois leveraged additional federal resources of $600 million each year, starting in 2006, to the state’s healthcare network. The state’s hospitals benefited from $470 million per year. Additionally, the state used $130 million per year to help with additional Medicaid healthcare needs such as funding for nursing homes, people with developmental disabilities and other Medicaid services. The current assessment plan will end on July 1, 2008.
Before Gov. Blagojevich took office, it had been more than 10 years since Illinois submitted a hospital assessment plan to the federal government for approval, in turn forgoing hundreds of millions of federal healthcare dollars from coming into the state of Illinois.  The Blagojevich administration was able to forge a broad-based, bi-partisan coalition in 2003 that led the effort to getting the first assessment plan for $430 million in 2004 approved by the Illinois General Assembly and the federal government. That assessment ended on July 1, 2005.


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