Illinois hospitals recognize the state faces a budget crisis without easy fixes. But the idea of moving large numbers of Medicaid beneficiaries into HMOs is not a solution, but an outgrowth of myths about Medicaid. Here are some of the myths and the facts.

Myth: Moving Medicaid beneficiaries into HMOs will save hundreds of millions of dollars.

Fact: Medicaid payments to hospitals and doctors are already low. Hospital inpatient base rates have been frozen since 1995, and without the Hospital Assessment Program, cover only 75% of costs. To save hundreds of millions of dollars means eliminating children, families, and the newly unemployed from Medicaid, resulting in more uninsured.

Myth: Illinois pays too much for Medicaid.

Fact: Illinois ranks 42nd in the country in spending per Medicaid patient. Costs have risen primarily because more people are covered due to unfunded policy choices made by a former Governor and the legislature.

Myth: Medicaid spending for hospitals is a drain on the state.

Fact: 25 percent of Medicaid payments to hospitals come from the state; 75 percent come from the Assessment Program (hospitals pay a tax to generate federal matching funds) and other federal funds.

Myth: Only hospitals benefit from the Assessment Program.

Fact: $2.5 billion in federal and nonstate funds are generated by the assessment program over five years for non-hospital services like nursing homes and developmental disability services. Moving Medicaid beneficiaries into HMOs could jeopardize those funds.

Instead of imposing desperate measures like HMOs for Medicaid, hospitals support greater use of responsible and workable approaches the state has implemented to make Medicaid more cost effective. Such approaches include finding medical homes so patients receive timely preventive and primary care and helping people with chronic conditions such as diabetes. These prevent unnecessary ER visits and hospitalizations, and last year, saved more than $100 million.

Ken Robbins

President

Illinois Hospital Association

Naperville