CHICAGO -- The Illinois Health Facilities Authority is not the only agency in the state looking to pool state Medicaid receivables and use them to back short-term debt issues, state officials said this week.

The Illinois Development Finance Authority's executive director, Ronald Bean, said his agency was exploring ways to provide financing for pharmacies that are holding state receivables.

He said the possibilities being explored by his agency were similar lt the program approved last week by the health facilities authority. That program calls for the agency to issue up to $100 million of commercial paper, backed by a pool of state Medicaid receivables from hospitals and nursing homes and secured with the state's pledge and other credit enhancements.

Legislation that would enable pharmacies to sell their receivables to the development finance authority was passed by the General Assembly earlier this month and is expected to be signed into law by Gov. Jim Edgar, according to Arnold Kanter, the governor's chief counsel. Legislation allowing the health facilities authority to purchase receivables was signed into law earlier this year.

The new legislation resulted from the fact the state currently takes 100 days to pay its bills, leaving many Medicaid providers scrambling for money. State officials have blamed the delay on a backlog of fiscal 1991 Medicaid bills and unexpected weakness in state revenues.

"This is more or less a furtherance of the state's efforts to provide liquidity to recipients of state payables," Mr. Bean explained. "But this is not a substitute for what the state is trying to do to speed up the payable cycle."

Mr. Bean said the authority was in the process of determining how the deal could be structured, probably using taxable commercial paper or notes. So far, he said, the authority is not working with any investment banking firm on the project.

"We're doing a lot of research in house," he added.

Mr. Kanter pointed out that whatever the authority issues would not constitute new state debt. Under the health facilities authority plan, only so-called adjudicated receivables or bills certified by the state a spayable would be eligible to be sold to the agency, which will use the state's pledge to pay those bills as security for the paper.

Mr. Bean said the plan was to sell the receivables sometime in January.

"If the need is as great as we think it is, we want to do it as swiftly as we can," he stated.

According to the Illinois Pharmacists Association, the need is great.

"We're forced to watch pharmacies close," said Mike McDermott, the association's director of governmental affairs.

The association, which has endorsed the program as a kind of "lender of last resort" for pharmacies, is preparing a survey of its members to see how many would participate, he said.

Mr. McDermott estimated it would take $38 million to bring the state's payment cycle to pharmacies down to 60 days.

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