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Provider Notice Issued 08/26/2021

Date:   August 26, 2021

To:       Enrolled Hospitals:  Chief Executives Officers, Chief Financial Officers, and Patient Accounts Managers

Re:      Repeal of 3.5% Rate Reduction per Public Act 102-0016 Effective July 1, 2021


 This notice informs hospitals of a change in reimbursement policy for Institutional claims. This change applies to claims billed to the Medicaid fee-for-service program and the HealthChoice Illinois managed care plans. Contact the applicable managed care plan for specific claim guidance.

Pursuant to Public Act 102-0016, the Department is repealing the 3.5% SMART Act
(Public Act 97-0689) reduction to reimbursement for hospital services effective with inpatient admissions and outpatient dates of service on or after July 1, 2021. The 2.7% SMART Act reduction applied to renal dialysis drugs on renal dialysis claims has not changed.   
Federal approval is required before implementing any rate change for fee-for-service claims. Until federal approval is received, all fee-for-service claims with inpatient admissions and outpatient dates of service on or after July 1, 2021 will be on hold to prevent incorrect payments and the resulting adjustments. Claims will be identified with Status Code I41, Institutional Claim Hold, on the paper Remittance Advice. Once federal approval is received, claims will be released, processed, and priced accurately. If a claim is rejected, a provider will have 180 days from the date of release to resubmit. 

Questions regarding this notice may be directed to a hospital billing consultant in the Bureau of Professional and Ancillary Services at 877-782-5565. 


Kelly Cunningham, Administrator
Division of Medical Programs


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Illinois Department of Healthcare and Family Services

JB Pritzker, Governor • Theresa Eagleson, Director