SPRINGFIELD, IL -- Comptroller Dan Hynes today urged changes in the state's short term borrowing laws saying the move would ensure access to enhanced federal funding from the stimulus package and also tap additional federal monies available from the Hospital Assessment Program.

In testimony before the Senate Executive Committee, Hynes said SB324 would allow state officials to temporarily borrow a maximum of $1.5 billion that would be paid back with federal stimulus and Medicaid funds. He also said the cash would be necessary to meet new federal prompt payment guidelines.

"This is a narrowly focused, fiscally responsible proposal that allows the state to maximize federal dollars and meet its obligations," Hynes said. "Lawmakers should act quickly to pass the measure to obtain those monies within the next few weeks."

Hynes said that without additional borrowing authority the state may be unable to fully access $2.9 billion in additional federal Medicaid funds during the next two years authorized by the President's stimulus initiative. To qualify for the extra funding, the state is required to pay doctors, hospitals and nursing homes promptly, within 30 days. The state is currently holding an estimated $2.2 billion in unpaid Medicaid bills, some of which date back to services provided in September.

"By any standard," Hynes said, "the 30-day prompt payment requirement is not currently being met." Hynes has been a long-time advocate of timely bill payments, as a matter of fairness and to ensure the financial viability of health care providers and public access to health care services.

The borrowing change also would allow the state to keep its commitment for the five-year, $3.8 billion Hospital Assessment Program. The program provides critical funding to the state's hospitals for a variety of programs and up to an additional $1.3 billion to the state for health care spending during that time.

Hynes predicted vendors of all types might have to seek reimbursement for hundreds of millions of dollars in services through the Court of Claims because the state will have insufficient revenues to pay the bills by Aug. 31, the end of this fiscal year's lapse period. In addition to Medicaid bills, there currently is another $2.3 billion worth of non-Medicaid bills awaiting payment, dating back to November of 2008.

SB324 is sponsored by Sen. Jeffrey M. Schoenberg, D-Evanston.

"This proposal is critical if we are to provide the more than 200 hospitals across Illinois who depend on these additional funds with the certainty that they need to meet the critical health care needs in their communities," Schoenberg said.