Provider Notice issued 08/04/11

Medical Assistance Budget Management Policies

A. HFS paid down outstanding Medical Assistance bills on June 30th to maximize enhanced ARRA federal match.

B. The FY12 Medical Assistance budget enacted by the General Assembly contains $1.4 billion in an unfunded spending gap compared to the Governor’s introduced budget.

C. For the period from July-December, with limited resources to pay all outstanding FY11 bills for the State, the Comptroller has notified HFS it will pay bills only up to $100 million GRF (gross) each month for July-August, and $300 million (gross) GRF for each month from September-December. Since July 1, two weeks of payments have been made to all expedited providers ($75 million in gross spending). A total of $125 million (gross) is remaining to August 31.

D. With the Comptroller’s spending cap and other unfunded budget pressures, HFS has developed the following budget management plan:

a) For all providers not referenced (in b – e) below, the payment cycle (i.e. voucher release) will be held for the first 120 days;

b) For all hospitals:

1) Assessment-related payments will be accelerated to make 12 months of assessment-related payments in 6 months;

2) One month of supplemental payments will be made during the month of August to hospitals with 40% or more revenues coming from Medical Assistance;

3) In the long term, HFS plans to make all supplemental payments on a monthly basis.

4) For non-expedited hospitals, the claims-based payment cycle will be held for the first160 days.

c) For expedited hospitals:

1) Schedule has been developed to make 1 or 2 additional payments in August (in addition to 2 paid in July);

2) The policy thereafter will be as follows:

i. Payments will be made weekly for claims aged at least 12 days for hospitals with 40% or more revenues from the Medical Assistance program:

ii. Payments will be made weekly for claims aged at least 60 days for other expedited hospitals qualifying under 89 Ill Adm. Code 140.71(b);

iii. Only hospitals fully qualified under 140.71(b) will be placed in expedited status;

iv. A provider’s expedited parameter will not be lowered, unless specifically authorized in writing, by the Director of HFS or the Medical Administrator.

d) For practitioners:

1) Expedited practitioners will receive four more weekly payments prior to August 31st; HFS plans to make weekly payments to these providers as the Comptroller spending cap increases;

2) Non-expedited medical practitioners will receive two additional payments during the month of August.

e) For other expedited providers:

1) Schedule has been developed to make 1, 2 or 4 additional GRF payments in August (in addition to 2 paid in July), targeted to smaller providers that serve the highest percentage of Medicaid clients (i.e. providers who have limited abilities to cost shift to other payers, e.g. community health centers, hospice and medical transportation providers);

2) Nursing homes with 40% or more revenues from the Medical Assistance program will be paid via the Long-Term Care Provider Fund;

3) Expedited pharmacies will be paid weekly via the Drug Rebate Fund;

4) The policy thereafter will be as follows:

i. Payments will be increased by 10 days over their original setting (excluding decreases for end of FY11 claims);

ii. Only providers fully qualified under 140.71(b) will be placed in expedited status;

iii. A provider’s expedited parameter will not be lowered unless specifically authorized in writing, by the Director of HFS or the Medical Administrator.