‘Things will get bad’ State owes millions to suburban hospitals, and tab threatens to grow rapidly

Hospitals are among the biggest businesses in the suburbs and, as such, hold some of the biggest IOUs from the state of Illinois — a tab that threatens to quickly grow much bigger.

Illinois’ deliberate policy of not paying its overdue bills for months at a time leaves it more than $12 million in debt to Advocate Health Care, which has hospitals in Barrington, Libertyville, Park Ridge, Downers Grove, Chicago and other locations.

Alexian Brothers Health System, with hospitals in Elk Grove Village and Hoffman Estates, is owed $2.2 million. Central DuPage Hospital in Winfield and Sherman Health in Elgin are each owed about $1.8 million. And the list goes on.

But an industry official says the suburbs have not yet seen the full impact of the state’s failure to pay.

“Things will get bad,” said Danny Chun, spokesman for the Naperville-based Illinois Hospital Association.

Most of the bills are reimbursements for when the hospital cares for the poor — people who use the Medicaid program.

But the state hasn’t been behind on the payments until just recently. Up until June 30, Illinois was required to pay hospitals within 30 days in order to qualify for increased federal stimulus funding. But that program has expired.

That means, Chun says, that hospitals haven’t had to really cut back yet, even though the state’s tab with them is running up quickly.

“That’s what hospitals are grappling with now,” he said. “It’s going to build up over time.

Advocate hasn’t cut back the services it offers. But Gregory Harden, Advocate’s vice president for finance, said a delay in reimbursements for the care they provide means the hospital system will be more cautious about further development. “The delay in payments has resulted in a reduction in capital spending and investment in a number of our clinical programs,” he said.

To what extent a hospital is hurt depends on each one’s financial picture and how much it’s owed, Chun said.

Hospitals have another possible problem looming.

Gov. Pat Quinn cut $276 million in hospital reimbursements from the state budget. Hospital supporters will be fighting that cut as lawmakers return to Springfield later this month.

That reduction in the state budget, Chun says, doesn’t change that the state still owes the hospitals. But it’ll almost certainly delay how long it takes for hospitals to get paid.

“The net impact of that is further delays,” Chun said.

Hospitals have tried to learn to deal with the ongoing late payments from the state, Chun said. But Quinn’s move is something they’ll fight.

“It’s challenging,” he said. “So you don’t make the problem worse.”