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SB 3587

MEDICAID-SNH-LOW VOL ADJUSTER

104th Regular Session Introduced by Emil Jones and 1 co-sponsor

SB3587 adds a $200 per inpatient day low-volume add-on for safety-net hospitals (2024-2026, sunset removed) to strengthen Medicaid reimbursements.

Rule 3-9(a) / Re-referred to Assignments
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Bill Summary · SB 3587

Summary of SB3587 (104th General Assembly, Illinois)

Overview

  • Bill: SB3587
  • Jurisdiction: Illinois
  • Session: 104th General Assembly
  • Introduced: February 5, 2026
  • Primary Sponsor: Sen. Emil Jones, III
  • Co-sponsors: Sen. Ram Villivalam
  • Title: MEDICAID-SNH-LOW VOL ADJUSTER
  • Purpose: Amend the Hospital Services Trust Fund provisions within the Illinois Public Aid Code to provide an additional safety-net hospital (SNH) add-ons for inpatient care, including a low-volume add-on, and to extend/adjust various hospital rate updates and add-ons.

Main Purpose and Intent

The bill aims to adjust Medicaid hospital reimbursement in Illinois by:
- Providing a low-volume add-on payment of $200 per inpatient General Acute and Psychiatric day of care for safety-net hospitals (SNHs) that meet defined criteria.
- Extending the timeline for the low-volume add-on (removing the current sunset).
- Maintaining alignment with other rate adjustments and add-ons through 2026 and beyond, subject to federal approval and state plan amendments.

Key thrust: bolster funding and incentives for safety-net hospitals, particularly those with lower inpatient volumes, while continuing to implement broader hospital rate updates and add-on structures.

Key Provisions and Changes

  1. Low-Volume Add-On for Inpatient Days

    • Effective July 1, 2024 through December 31, 2026 (subject to federal approval), the bill adds:
      • A safety-net hospital low-volume add-on payment of $200 for each inpatient General Acute and Psychiatric day of care, excluding Medicare-Medicaid dual eligible crossover days.
      • Target: safety-net hospitals defined in Section 5-5e.1 of the Illinois Public Aid Code.
    • The add-on is in addition to other payments and not counted toward the 90% minimum rate threshold (i.e., it’s an extra payment separate from the base rate adjustments).

  2. Targeted Eligibility Criteria for the Add-On

    • Applies to SNHs defined under Section 5-5e.1 of the Code.
    • The add-on uses base period admissions data to determine eligibility for the 2024-2026 period and uses 30-month look-back for calendar year 2026 (per the statute’s description of the base period methodology).

  3. Disposal of Sunsets

    • The December 31, 2026 sunset on the low-volume add-on is removed, effectively continuing the add-on beyond 2026, contingent on federal approvals and implementation steps.

  4. Other Hospital Rate Provisions (as background and context)

    • The bill references ongoing adjustments established in the Public Aid Code:
      • Inpatient general acute care: 10% increase to statewide-standardized amounts and per diem rates for hospitals exempt from APR-DRG (effective for dates of service on/after Jan 1, 2024; subject to federal approval).
      • Inpatient psychiatric and rehabilitative services: 10% increases in various per diem rates, with minimums and safeguards for safety-net hospitals (e.g., 90% of minimum rates for safety-net hospitals).
      • Outpatient services: 10% increases to statewide-standardized amounts for general acute, psychiatric, and rehabilitative services.
      • Additional add-ons for inpatient General Acute and Psychiatric days (e.g., add-on of at least $210 per inpatient day starting July 1, 2024 through Dec 31, 2026, for safety-net hospitals; separate from the low-volume add-on).
    • Administrative and regulatory actions:
      • Department of Healthcare and Family Services (HFS) must implement and publish rate changes, secure federal approvals, and publish rate sheets 30 days prior to effective dates.
      • Emergency rulemaking authority is provided to implement these changes promptly, deemed an emergency and necessary for public welfare.

Affected Entities

  • Primary Impact: Safety-net hospitals (SNHs) defined by Section 5-5e.1 of the Illinois Public Aid Code.
  • Beneficiaries: Medicaid patients served by SNHs, particularly in inpatient General Acute and Psychiatric settings.
  • State Agencies: Illinois Department of Healthcare and Family Services (HFS) responsible for rate setting, notices, and implementing emergency rule changes, and for applying for federal approval of amendments to the Illinois Title XIX State Plan.

Procedural and Timeline Notes

  • Effective Date: Act takes effect upon becoming law.
  • Implementation Window: The low-volume add-on applies to inpatient days from July 1, 2024, through December 31, 2026, with continued consideration beyond 2026 subject to federal approval and statutory amendments.
  • Federal Approval: Several rate changes are subject to federal approval from the Centers for Medicare and Medicaid Services (CMS) as part of the state plan amendments.
  • Rate Sheets: The Department must publish updated rate sheets or add-on amounts 30 days before the effective date or within 30 days after federal approval, whichever is later.
  • Administrative Flexibility: Emergency rulemaking authority is granted to implement the changes, with the usual 24-month emergency rule limit not applying to these rules.

Summary Outlook

SB3587 strengthens Medicaid payments to Illinois safety-net hospitals by adding a $200 per inpatient day low-volume add-on (July 2024–Dec 2026, with sunset removed). It also weaves this add-on into a broader framework of hospital rate updates and additional add-ons for inpatient and outpatient services, subject to federal approval and state plan amendments. The policy aims to improve financial viability for SNHs that treat higher shares of Medicaid/low-income patients, while ensuring transparent rate adjustments and timely implementation through rate sheets and emergency rulemaking provisions.

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

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