Provider Notice Issued 05/14/2025

This notice informs hospitals of data that must be submitted to the Department of Healthcare and Family Services (HFS) to maintain hospital funding levels under the Hospital Assessment Program.

Federal Medicaid policy limits the rates that can be paid for Medicaid services, including hospital inpatient and outpatient services. Under the fee-for-service (FFS) Medicaid program, the upper payment limit (UPL) is based on Medicare cost principles. Under Medicaid managed care, states can pay above the FFS UPL up to the average commercial rate (ACR). Illinois payments through managed care, including base payments and directed payments, exceed Medicare cost principles. As a result, the federal Centers for Medicare & Medicaid Services (CMS) requires the state to demonstrate that payment levels do not exceed the ACR to continue to make directed payments for the calendar year starting January 1, 2026.

The ACR demonstration is done on a class-by-class basis according to the classes defined in HFS' Directed Payment Preprints. To be clear, the limit is applied to hospital classes, not individual hospitals. But to develop and demonstrate the ACR for each class, HFS must collect data from each individual hospital.

To ensure HFS has time to analyze the data and provide it to CMS, HFS is starting the ACR demonstration process now. Early collection and analysis of the data will give HFS time to take steps necessary to maintain funding levels for all hospital classes in 2026 and beyond.

HFS has retained its actuarial services firm, Milliman, to collect and analyze the data. HFS has worked with the Illinois Health and Hospital Association (IHA) to develop the template for submitting the data and Milliman has established a secure portal that allows each hospital to submit the data directly to them. The template is here.

Data must be submitted for the five highest volume commercial payers for each hospital. Data must be available for audit in the hospital's paid claims data, if requested. Data from Medicare, Medicare Advantage, Medicaid managed care organizations (MCOs), worker's compensation or other payers not subject to market conditions should not be used.

IHA, with participation from HFS and Milliman, will conduct two webinars for hospitals to further explain the process and answer questions hospitals may have. Hospitals need only attend one.  The webinars will be held on May 22, 2025, at 11:00 a.m. and on June 3, 2025, at 12 p.m. IHA will provide information on how to join the webinars to all hospitals.

HFS and Milliman have established a secure data portal for hospitals to submit data. Any hospital accessing the portal to submit data will not be able to see data submitted by any other hospital. Only Milliman will have the ability to download and view data submitted through the portal. Working with IHA, HFS will register each hospital's Chief Financial Officer (CFO) to be able to access the portal using their email address. Upon request, hospital CFOs will be able to delegate their access to another employee of their hospital. To ensure security, access to the portal is limited to the CFOs and specific delegated employees at each hospital. Instructions for accessing the portal will be communicated to these individuals. 

Please submit the data by June 25, 2025.  Questions may be submitted to HFS.Hospitals@illinois.gov

Kelly Cunningham, Administrator
Division of Medical Programs