Elmhurst Memorial Healthcare Lobbying Hard for Tax-exempt Status, Reductions in Medicaid Cuts

Two major issues drew leaders from Elmhurst Memorial Healthcare to Springfield this week: Gov. Pat Quinn's proposed $2.7 billion Medicaid cut and the hospital's desire to re-instate its .

Both issues are taking center-stage at the same time Elmhurst Memorial is facing due to the construction of its new facility on Brush Hill Road. The hospital also is in talks with Northwestern Memorial Healthcare about a possible merger.

'Rendezvous With Reality'

EMHC representatives met with state legislators Wednesday to discuss the consequences of Gov. Pat Quinn's proposed 23 percent Medicaid cut. The cuts are so drastic, they say, it would force hospitals across the state to reduce or eliminate health care services or jobs or both, reducing patients’ access to the health care they need.

“We recognize that the state faces serious financial challenges,” EMHC President and CEO W. Peter Daniels said in a prepared statement. “However, blunt Medicaid cuts will hurt the most vulnerable populations in our community, hospitals and the health care delivery system. We need a thoughtful, multi­year strategy to transform the Medicaid program to make it as cost effective as possible.”

The governor’s Medicaid proposal includes a rate cut to hospitals of about $350 million, or about 8 percent, and about $150 million in other reductions targeted at hospitals, according to the statement. Representatives from EMHC met with Republican Sens. Carole Pankau, Kirk Dillard and Ron Sandak, and  Reps. Dennis Reboletti and Chris Nybo, among others.

Republican members of the General Assembly have stressed, however, that the state must reduce Medicaid's unsustainable growth. Fiscal year funding for Medicaid will have to increase nearly $3 billion next year just to maintain the original bill backlog of $2.4 billion,

In his February budget speech, Quinn said, "Our rendezvous with reality has arrived."

Regaining Tax-exempt Status

With the question of Illinois hospitals' property tax-exempt status shifting from the Illinois Revenue Department to the state legislature, EMHC representatives and other hospitals are lobbying lawmakers to enact a legislative solution favorable to them.

EMHC's senior vice president Jim Doyle said hospitals already are doing their part to help the state.

“Hospitals are the fourth largest contributor of revenues to the state, paying $900 million under the Hospital Assessment Program and generating $900 million in federal matching funds for Medicaid," Doyle said in a prepared statement. "That brings the state more net revenue than the state lottery. Imposing massive Medicaid cuts or new taxes on hospitals are not meaningful, workable solutions to our state’s challenges, but will cause irreparable harm to patients and our community.”

According to an April 17 article in Crain's Chicago Business, five downstate hospitals have dropped their pursuit of tax exemption status; 20 requests, including EMHC, are still pending.

Elmhurst Unit District 205 is one of the local taxing bodies in DuPage County closely watching the issue. The hospital already has paid property taxes to the district, and if it regains tax-exempt status, the district will be liable to pay back about $950,000. The refund is not projected in the School District's budget and would result in a $950,000 shortfall, according to the minutes of the district's Finance and Operations Committee's April 18 meeting.

New information is coming out of Springfield almost daily, School Board President Jim Collins said at the April 24 board meeting.

"There is a law firm working with the county to uncover all of the nuances of this," he said. "Right now, it's looking like it's not in favor of the (School District)."

The issue will be on the School Board's May 8 agenda for more detailed discussion.