Rauner signs new Medicaid funding plan for hospitals

SPRINGFIELD, Ill. (AP) - Illinois Gov. Bruce Rauner has signed a Medicaid funding plan that changes the way hospitals are reimbursed for treating low-income patients.

The Republican said Monday in Chicago that the proposal is a "major step forward" to ensure that hospitals in impoverished communities are adequately funded.

The legislation changes the state's $3.5 billion hospital assessment program to comply with federal mandates that more patients be covered by cost-cutting managed care organizations. The updated formula also gives additional funding to hospitals whose patients overwhelmingly rely on Medicaid coverage.

But two South Side Chicago hospitals say they will be forced to close from lack of funding under the plan. Legislative leaders in Springfield are working with the hospitals' CEOs for solutions.

The plan is now sent to the federal government for approval.