SPRINGFIELD, Ill. — Illinois lawmakers’ plan to redesign the way the state draws Medicaid health care funding from the federal government means at least two hospitals serving impoverished communities will close, threatening a deal that’s taken them a year to negotiate with health care lobbyists.

Roseland Community Hospital and South Shore Hospital, on Chicago’s South Side, could both be shuttered, officials said, under the current plan to redraw the hospital assessment program in response to tightened federal guidelines and pick up $360 million extra available for Illinois.

“The reassessment design is Roseland’s obituary,” Roseland CEO Tim Egan said.

The House Appropriations-Human Services Committee delayed a vote on the plan Tuesday. Members said they are still working on the proposal, designed to address federal requirements that more Medicaid clients be covered by cost-cutting managed-care systems.

Most hospitals fare well under the new system and the Illinois Health and Hospital Association promises to prioritize the $360 million federal boost to safety-net hospitals, where 50 percent or more of the patients are on Medicaid, which doesn’t cover all costs. But South Shore will receive no new funding, while CEO Tim Caveny said it needs $3 million more to break even. Roseland will face a more than $6.5 million cut.

Rep. Camille Lilly, a Chicago Democrat, told committee members that she would not abide any safety-net closures.

“When we are doing our work, we end up again creating disparities for a population that cannot care for themselves because there is nothing remaining there,” Lilly said.

Hospital association CEO A.J. Wilhelmi acknowledged that “this is not a perfect model” but that the goal is “preserving access to quality health care for all Illinoisans — especially for vulnerable populations.”

To make up for Medicaid’s funding gaps, the state has hospitals pay an assessment that is matched by the federal government and redistributed to hospitals according to a formula based on patient data at least 10 years old. The redesign uses 2015 Medicaid utilization data, which the hospital association maintains better reflects where money should follow services.

But Egan said the new data don’t consider patients who have their claims denied under the managed care system and urged lawmakers to increase oversight of the private insurers that run it.

Lawmakers not only need to agree on a plan, but also get a federal OK by July 1.

Workers for the threatened hospitals, supported by their union, SEIU Healthcare Illinois-Indiana, responded with a rally Tuesday outside the Illinois Capitol to save the safety-nets.

“Roseland community already struggles with poverty, substance abuse, high rates of violence and a lack of good jobs with fair wages,” said Onzell Brown, who’s worked at Roseland Hospital for seven years. “Why should our community be the one to suffer when we are doing everything we can to survive?”


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