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SB 1391

MEDICAID-HOSPITAL RATES

104th Regular Session Introduced by Kimberly Lightford

Summary — SB 1391 (Illinois, 104th General Assembly, 2025) Topic: Medicaid / Hospital Reimbursement Rates OverviewSB 1391 increases Medicaid reimbursement rates for hospital inpat

Senate Committee Amendment No. 1 Rule 3-9(a) / Re-referred to Assignments
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Bill Summary · SB 1391

Summary — SB 1391 (Illinois, 104th General Assembly, 2025)

Topic: Medicaid / Hospital Reimbursement Rates

Overview

SB 1391 increases Medicaid reimbursement rates for hospital inpatient and outpatient services by 10%, effective for dates of service on or after January 1, 2026, subject to federal approval. The bill directs the Illinois Department of Healthcare and Family Services (HFS) to take all necessary steps — including publishing notices, seeking Title XIX (Medicaid) State Plan amendments, and adopting administrative rules where required — to implement the rate increases.

Key provisions

  • Hospital rate increases (effective for dates of service on and after January 1, 2026, subject to federal approval):
    • Inpatient services: increase by 10% over rates in effect January 1, 2025 under the All Patient Refined–Diagnosis Related Groups (APR-DRG) system.
    • Outpatient services: increase by 10% over rates in effect January 1, 2025 under the Enhanced Ambulatory Procedure Grouping (EAPG) system.
  • Two placements of the 10% increases:
    • As an amendment to the Medical Assistance Article specifically for "Safety‑Net Hospitals."
    • As a separate new section in the Hospital Services Trust Fund Article that applies generally (subject to the same federal approvals).
  • Administrative requirements: HFS must publish all appropriate public notices, apply for federal approval of State Plan amendments, and promulgate rules if necessary to ensure the increases take effect January 1, 2026.
  • Effective date provision: the Act takes effect upon becoming law.

Definitions / Eligibility (Safety‑Net Hospital)

  • A Safety‑Net Hospital must:
    1. Be licensed by the Illinois Department of Public Health as a general acute care or pediatric hospital; and
    2. Be a disproportionate share hospital as described in federal Social Security Act §1923; and
    3. Meet either:
      • Medicaid Inpatient Utilization Rate (MIUR) ≥ 40% and charity percent ≥ 4%, or
      • MIUR ≥ 50%.
  • MIUR is calculated using inpatient days from the hospital fiscal year ending three years before the rate year; the "rate year" begins October 1.

Who is affected

  • Primary: Illinois hospitals that qualify as Safety‑Net Hospitals and hospitals receiving payments from the Hospital Services Trust Fund.
  • Secondary: Department of Healthcare and Family Services (administration and rulemaking), Medicaid managed care plans (administration of payments), and indirectly Medicaid beneficiaries and hospital operations statewide.
  • Federal involvement: Centers for Medicare & Medicaid Services (CMS) must approve State Plan amendments for the changes to take effect.

Implementation & timeline

  • Target effective date for rate increases: dates of service on/after January 1, 2026.
  • HFS must complete federal State Plan amendment requests, public notices, and any necessary rulemaking in time to implement the increases by that date.
  • The Act becomes effective upon becoming law; however, increases are contingent on federal approval.

Procedural status (as of documents provided)

  • Introduced by Sen. Kimberly A. Lightford (and others listed as sponsors).
  • Bill text includes an amendment (Senate Amendment 001). The Act states it takes effect upon becoming law.
  • Companion: HB 1072.

Fiscal note / considerations

  • The bill does not specify the total state or trust-fund dollar amounts. The fiscal impact will depend on:
    • The number of hospitals qualifying (safety‑net status and those under the Trust Fund),
    • The volume of Medicaid inpatient and outpatient services,
    • Whether increases apply cumulatively across both provisions or replace existing supplemental payments,
    • Federal approval of State Plan amendments (which can affect matching federal funds).
  • HFS and budget analysts would be responsible for estimating net state and federal costs prior to implementation.

Compiled from official sources — confirm details with the bill’s official record.

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