Bruce Rauner

Illinois' Medicaid hospital-funding plan gets federal OK

The federal government has agreed to match billions of dollars in Medicaid funding for Illinois hospitals around the state.

Gov. Bruce Rauner said Thursday that Washington approved the state's Medicaid funding model known as the hospital assessment program. The program requires hospitals pay a tax to the state that is then matched by the federal government. That generates $3.5 billion for the state that is then distributed to the hospitals.

Illinois revamped the program this year to answer federal requirements that more Medicaid patients be covered by cost-cutting managed-care organizations. The redesigned program also funnels most of the money to hospitals in low-income...