Several Illinois hospitals that focus their care on low-income patients tentatively back an unfolding Medicaid plan by Gov. Pat Quinn, after previously blasting the governor’s attempts to cut $2.7 billion in yearly Medicaid spending.

“The bill as presented is something that would work for us,” said Sister Sheila Lynne, president of Mercy Hospital in Chicago, which is part of the Association of Safety Net Hospitals. Lynne appeared at a Chicago City Council meeting today that focused on how state Medicaid cuts will impact local community providers.

Advocacy groups for Medicaid patients also consider Quinn’s proposal better than a prior plan, but are still frustrated with the governor’s focus on austerity.

Quinn worked with Illinois House Democrats to introduce a bill yesterday that maintains $2.7 billion in cuts. But the bill spares rollbacks in what the state reimburses safety net hospitals, which are community hospitals that mostly serve either patients without insurance or the 2.7 million poor, elderly, or disabled Illinois patients on the federal-state Medicaid program.

The bill or a version thereof could clear the General Assembly by Thursday, as the state legislature is on a frenetic schedule. Quinn and the General Assembly want to pass big changes in Medicaid and public employee pensions by next Thursday, and also pass an annual state budget in the nine-day window.

The timetable concerns Mark Newton, executive director of Swedish Covenant Hospital in Chicago. Newton notes that the bill is almost 500-pages long, and could go through numerous changes in the next 48 hours. “This legislation will certainly have unintended consequences,” Newton said at the council meeting.

The legislation works from a plan hatched by Quinn in April to slice provider payments, cut or wipe out 59 different Medicaid programs, including elimination of a senior prescription drug program, and also drum up revenue by hiking the cigarette tax by $1-a-pack.

Under the new bill, provider payments are cut by $240 million a year instead of $675 million in the first proposal – and safety net hospitals are spared from provider reductions. Before, community hospitals like Holy Cross in Chicago sounded the alarm bells that provider cuts could force them to shut down.

Dennis Ryan, vice president of community and external affairs at Holy Cross, said today that the bill is “a good improvement of what had been proposed initially,” adding that Quinn is, “Definitely moving in the right direction.” But Ryan said that, “It is too complicated now to tell whether the bill will affect our essential and critical services.”

One reason for the complexity is that it is not clear how the state will make up the savings lost in reducing provider cuts from $675 million to $240 million.

That equals $335 million the state must come up with to achieve the desired $2.7 billion in savings (The $2.7 billion includes both $1.4 billion in state savings and $1.3 billion in federal Medicaid reimbursements Illinois would no longer receive). Quinn spokesman Mike Claffey acknowledged that the governor’s office is still figuring out exactly where these savings would occur.

Larry Joseph, fiscal policy director of Voices for Illinois Children, is completing an analysis of the bill. According to Joseph, some savings will be realized in fairly benign ways such as moving around as much as $300 million that went unused in this year’s state budget toward paying backlogged Medicaid bills.

However, the legislation also includes yet more cuts to Medicaid programs. These include capping the number of prescription drugs a month that Medicaid provides to parents and children, and putting income restrictions on which disabled children may receive expensive medical equipment like ventilators.

Joseph said that the new Medicaid plan is better than the old one, precisely because it spares community hospitals and also spares cuts in reimbursement rates to physicians. But he was still unhappy with the final product.

Jim Duffet, executive director for Campaign for Better Health Care, also felt that “things were moving in the right direction.” But he wishes Quinn would discuss other tax options in addition to the cigarette levy. Duffet mentioned other revenue enhancers from a graduated income tax to even throwing support behind a gambling expansion bill.

Duffet anticipates that a bill will clear the General Assembly by Thursday. He says that progressive advocates can claim a partial victory if the cigarette tax hike is included. The tax hike is currently part of the bill, but it might become its own piece of legislation.

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