Governor Pritzker Signs Hospital Assessment Program Expansion

Chicago—Governor JB Pritzker today signed HB1950, extending and expanding the Hospital Assessment Program through 2026. The legislation helps ensure cash-flow predictability for hospitals, tying greater funding to higher Medicaid utilization to protect safety net hospitals. It also reclassifies certain hospitals to better align with payment and Medicaid needs, as well as offering tax exemptions and waivers to help hospitals recover from the effects of COVID-19.

"The Hospital Assessment program was an important support to hospital's critically in need of additional funding during the worst of the COVID-19 pandemic," said Governor JB Pritzker. "This extension continues to support them on the path to recovery and offers expanded services and Medicaid support to more hospitals to ensure people across the state have access to affordable, high-quality health care."

 "The work that is being done in safety net hospitals and other hospitals that serve high percentages of Medicaid customers is so critical - particularly for historically under-served communities of color," Illinois Department of Healthcare and Family Services Director Theresa Eagleson said. "The Hospital Assessment program reinforces a more equitable system of health care in Illinois, and ensures more resources are going to the facilities Medicaid customers choose for their care."

The renewed Hospital Assessment establishes refined payment structures for each hospital class and maintains the existing assessment tax structure. The Illinois Department of Healthcare and Family Services (HFS) collects a hospital assessment tax, the federal government provides matching funds, and the dollars are redistributed to hospitals based on the volume and acuity of the Medicaid patients they serve, as well as the class of hospital.

HFS worked with the General Assembly and stakeholders to distribute funding to hospitals across the state and prioritize hospitals that serve a high number of Medicaid patients. In order to come into compliance with a recent federal mandate, the Hospital Assessment program will gradually shift payments so that each year a larger share of the payments to hospitals is tied to the volume and acuity of Medicaid patients.
The continuation of the Hospital Assessment program recognizes the challenges faced by hospitals, especially small and rural hospitals, over the last several years.

To support recovery from COVID-19 losses, the renewed Hospital Assessment program waives $240,000,000 in the assessment imposed on hospitals, an amount replaced by General Revenue funds in the budget adopted by the General Assembly and signed into law by Gov. Pritzker.

The current Hospital Assessment program, signed into law in 2020 to run through calendar year 2022, brought additional funding, and improved Medicaid responsiveness in the areas of Illinois affected most by COVID-19.

The amendments to the act recognize outpatient services to determine qualification as a high Medicaid hospital, allowing more hospitals to qualify. The reclassifications also establish a new class of small government hospitals, to better align their payments with their costs and federal limits. This class would consist of seventeen critical access hospitals and three small, rural hospitals. This is another commitment to expanding rural health care following other actions from the Pritzker administration on that front, including the recently signed bills SB3017 and SB1435.

The Hospital Assessment program also provides for more security and reliability to safety-net hospitals, hospitals primarily serving Medicaid patients, by adding a rate floor for safety net and critical access hospitals ensuring higher payments during periods of higher utilization.

"The Hospital Assessment program brings an additional $3.9 billion dollars into Illinois' Medicaid program," said House Majority Leader Greg Harris. "In addition to providing stability for our healthcare system during these unstable times, we are using these dollars to support trauma services, access to behavioral healthcare and reducing health disparities."

"Safety net hospitals have historically provided excellent medical services despite having fewer resources and greater need, especially during this pandemic," said Lt. Governor Juliana Stratton. "Health care is a right and not a privilege. By expanding the Hospital Assessment Program, Illinois is creating a broader pathway for better health outcomes by ensuring access to equitable, affordable health care." 

"The access that is being provided by hospitals that serve high percentages of Medicaid customers is so critical - particularly for historically under-served communities of color," Illinois Department of Healthcare and Family Services Director Theresa Eagleson said. "The Hospital Assessment program prioritizes Medicaid-serving hospitals, especially safety net and critical access hospitals and also larger hospitals serving significant numbers of our customers, reinforcing a more equitable system of health care in Illinois, and ensuring more resources are going to the facilities which Medicaid customers choose for their care."

"The renewed assessment program will provide greater certainty for hospitals as to the amount of the payment they will receive when they serve a Medicaid customer," said Sen. Ann Gillespie (D-Arlington Heights.) "The assessment program will support continued viability for safety-net hospitals and hospitals serving high percentages of Medicaid patients so they can continue their vital work in the communities they serve for the long term."

"As a safety net hospital, we serve as frontline healthcare providers to some of the most vulnerable populations in Illinois, who often have no other place to turn for their care," said Larry McCulley, CEO of Touchette Regional Hospital. "This legislation provides an increased investment in safety net hospitals, increasing their ability to provide the desperately needed mental and behavioral services in underserved communities. Since the COVID-19 pandemic, safety net hospitals have seen a massive increase in the need for behavioral health services, one that is difficult for providers to sustain. Through this larger investment by the state, safety-net hospitals will be able to deliver greater access to the behavioral and mental health services that our communities critically need."

"Communities we serve on the Northwest side of Chicago are in desperate need of expanded behavioral health services, with at least ten to fifteen patients present every day in the emergency department in need of behavioral health services," said Edward Green, Chairman of the Board at Community First Medical Center. "The legislation signed today will allow our medical center to immediately establish a 24-bed inpatient behavioral health unit to help address the increased need for behavioral and mental health services we are seeing across the city. We want to extend our gratitude to the House and Senate leaders that worked to pass this legislation and to the Governor for his continued prioritization of expanding mental health across the state."

"The hospital funding included in HB 1950 will go a long way to stabilizing hospitals so they can continue to fulfill their mission of caring for their communities. The reauthorization of the hospital assessment program, coupled with pandemic-related financial relief and the Safety Net HEAL program, will preserve access to healthcare and advance health equity in communities across the state," said A.J. Wilhelmi, President & CEO of the Illinois Health and Hospital Association. "I'd like to thank Gov. Pritzker and Illinois lawmakers for their support of Illinois hospitals, ensuring all Illinoisans—and particularly our most vulnerable populations—continue to receive quality, affordable care."

"The updated hospital assessment, in combination with increased investments in safety net hospitals in the recently signed budget, provide a strong step forward in ensuring that community safety net hospitals have the resources necessary to provide essential care," said Anne Igoe, Vice President, Health Systems, SEIU Healthcare Illinois Indiana.