The Centers for Medicare and Medicaid Services issued final guidance Monday that sets up a system for reimbursement. Lawmakers set aside $1 billion over four years for the program, created by Medicare legislation passed in 2003.
For hospitals in border states, the additional money can mean the difference between running a profitable business or an unprofitable one, said Don May, vice president of policy for the American Hospital Association.
''I don't know if it will completely change their financial picture, but for those hospitals on the border, this is going to make a difference in ensuring they are there to treat the patients, not just the undocumented ones, but all the patients living in those communities,'' May said.
Two-thirds of the money will be distributed to health care providers based on a state's percentage of illegal immigrants. The other third will go to six states with the largest number of arrests of illegals.
The states receiving the highest amounts in the current fiscal year are California, $70.8 million; Texas, $46 million; Arizona, $45 million; and New York, $12.25 million.
Payments to providers will be made on a quarterly basis and will be adjusted proportionately if the bills exceed the state's allocation.
One group that advocates stricter immigration policies said the government's reimbursement of hospitals was the right thing to do.
''If the federal government has abdicated its responsibility for immigration enforcement, then it's responsible for making those jurisdictions whole,'' said Mark Krikorian, executive director of the Center for Immigration Studies, a think tank based in Washington.
Hospitals are required to provide emergency care to patients regardless of their ability to pay or their status as citizens. May said hospitals were concerned that the federal government could have discouraged illegal immigrants from getting emergency care if information gathered from the patient was then used to deport them, but those concerns have eased.
He said hospitals would ask patients three questions: are they are eligible for Medicaid, has patient received a border crossing card, and is a patient foreign-born.
CMS administrator Mark McClellan told reporters in a conference call that the information would not be used to deport aliens, but in rare circumstances, the information could be used in criminal cases.
CMS assumed some patients would refuse to state their place of birth, so it will allow hospitals to allocate up to 10 percent of their claims to such cases.