Federal Approval of Changes to Illinois' Medicaid Plan to Generate $900 Million

SPRINGFIELD - The Illinois Department of Healthcare and Family Services (HFS) today announced that it has obtained federal approval of a state policy change that will immediately allow $365 million in federal funding to be drawn, and used to pay Medicaid bills. By utilizing the enhanced federal match that is currently available, the state can leverage this funding to generate more than $900 million for Illinois' healthcare providers over the next few months. 

"By working closely with our counterparts on the federal level, we have been able to secure an infusion of federal healthcare funding that will strengthen the finances of our healthcare system and speed up payments to many of our providers," said HFS Director Julie Hamos.

The U.S. Department of Health and Human Services (HHS) recently approved Illinois' State Plan Amendment for the Medicaid program in Illinois. The amendment included a policy change that moved low-income parents from healthcare coverage under the Children's Health Insurance Program to coverage under the Medicaid program. This important federal approval means that HHS will release $365 million to the state to pay Medicaid bills. Previously, the funds were withheld pending approval of the State Plan Amendment.

By using the funds to pay Medicaid claims in the current fiscal year, the state will receive federal matching funds at the American Recovery and Reinvestment Act-enhanced rate of 62 percent.  When the federal matching dollars are received and spent again, the state will generate an additional 62 percent match on the subsequent spending. This will allow the state to leverage a total of more than $900 million in federal funds for outstanding Medicaid claims over the next few months.

The federal funds will help HFS pay current Medicaid bills, and can help to reduce some backlogged bills for many of the state's healthcare providers.