Federal CMS State Directed Payments Proposed Rule
The federal Centers for Medicare & Medicaid Services (CMS) published “Medicaid Managed Care State Directed Payments and Medicaid Fee-For-Service Targeted Medicaid Practitioner Payments" proposed rule on May 20, 2026. The proposed rule makes numerous changes, including reducing state directed payments from the Average Commercial Rate (ACR) to Medicare rates, with certain grandfathering provisions. IHA is currently reviewing the proposed rule and will provide an overview of the impact the rule may have on hospitals, in addition to a comment letter to federal CMS. Click here to view the CMS fact sheet and click here to view the proposed rule. 

U.S. House Committee Advances Hospital Billing Legislation
The House Education and Workforce Committee yesterday unanimously passed the Transparency in Billing Act (H.R. 8684), which requires off-campus hospital outpatient departments to obtain a separate unique health identifier that must be included on all claims for services billed to commercial group health plans or their enrollees. The measure prohibits the health plan from paying the claim and the hospital from collecting payment from the plan enrollee if the claim does not include the identifier. Civil monetary penalties would be imposed on hospitals that violate the requirement.

State Legislative Update
The Illinois General Assembly has adjourned for the holiday weekend. The Senate was in Springfield Monday afternoon through Thursday, having canceled its scheduled Friday session. The House returned to work Tuesday, conducting legislative business through Friday as scheduled. Both the House and the Senate will return on Monday, May 25 at 4 p.m. and are scheduled to remain in Springfield next week until the scheduled adjournment date of May 31. 

The Senate approved 66 House bills on an agreed bill list. The House did not use an agreed bill list, instead considering each bill individually. This week, the Senate approved 17 Senate bills and 140 House bills while the House approved 108 Senate bills and one House bill. Deadline extensions are expected in both chambers.

There was no formal movement on the budget this week. On May 7, each chamber compiled the Governor’s introduced budget into one amendment in each chamber, positioning it for future consideration. At that time, the leaders issued a joint statement indicating this was to allow time for public review and input. House Floor Amendment No. 1 to HB 131 (Welch) was assigned to the House Executive Committee but has not yet been considered.  Senate Floor Amendment No. 1 to SB 2512 (Sims) was filed but remains in the Senate Assignments Committee.

Procedurally, both bills remain in the first chamber and will require three separate readings in the opposite chamber. It is unclear if either of these bills will serve as the actual vehicle for the final budget. 

Lawsuit Challenges U.S. Dept. of Education Rule Limiting Access to Student Loans
A lawsuit filed this week by 25 states, including Illinois, and the District of Columbia against the U.S. Dept. of Education contends the agency’s final rule establishing new federal student loan limits would harm the healthcare workforce. The rule, issued April 30, narrows the definition of the terms “professional student” and “graduate student,” adding new rules and limiting eligibility in ways not authorized by Congress. Illinois Attorney General Kwame Raoul and other state attorneys general argued that the rule excludes degree programs that qualify under the standards established by federal law. As a result, Raoul said students seeking to enter professional programs that exceed the annual cap will be forced to seek private loans on worse terms or be priced out of higher education entirely. 

“This rule will cut off access for many qualified students and will worsen nationwide labor shortages in vital fields, including nursing and physical therapy. Students interested in pursuing degrees in these critical professions will have to turn to higher-interest borrowing and risky loans, jeopardizing their future economic security,” Raoul said. 

The rule defines “professional students” as individuals enrolled in one of 11 designated professional degree programs: pharmacy, dentistry, veterinary medicine, chiropractic, law, medicine, optometry, osteopathic medicine, podiatry, theology and clinical psychology. Students in those programs would qualify for up to $50,000 in federal loans per year, with a $200,000 aggregate limit, while graduate students would be eligible for up to $20,500 in federal student loans per year, with a $100,000 aggregate limit. The changes are set to take effect on July 1.

State Expands Permanent Supportive Housing Across Illinois
The Illinois Housing Development Authority (IHDA) this week announced $50 million in state and federal funding to support six new permanent supportive housing developments across Illinois as part of an effort to reduce homelessness and expand access to stable housing. The investments will create 142 units of affordable housing paired with on-site services for individuals and families living with disabilities, experiencing homelessness, or at risk of housing instability. Click here for more information about the investment, which was awarded through IHDA’s Permanent Supportive Housing Development (PSH) Program.
 
PSH seeks to advance Illinois’ broader strategy to reach “functional zero” homelessness by expanding proven housing solutions. PSH combines deeply affordable housing with wraparound services such as healthcare coordination, case management, and employment support. The model has consistently been shown to improve long-term housing stability while reducing reliance on emergency rooms, shelters, and other costly public systems.