(Story updated at 1:30 p.m. ET Thursday, Feb. 23.)

Illinois healthcare providers ripped Gov. Pat Quinn's plan to cut $2.7 billion from the state's Medicaid program.

Quinn didn't say where exactly those cuts would come from during his fiscal 2013 budget speech. He did say that last year state legislators couldn't cover the cost of Medicaid in Illinois, falling short by $1.9 billion. He added that Illinois is the only state that “intentionally kicks its current Medicaid bills into future fiscal years,” and that the practice needed to cease. He cited a report by the Civic Federation, a Chicago-based government watchdog, finding that the state would have $21 billion in unpaid Medicaid bills by 2017 if general fund appropriations for Medicaid increase 2% annually.

“I have the utmost respect for the doctors, clinics, hospitals, nursing homes, and pharmacists who provide care under the Illinois Medicaid program, often under very challenging circumstances,” Quinn said. “But it is respect for these providers that motivates me to act to save the entire program from collapse.”

The Illinois Hospital Association said the $2.7 billion in cuts represent 18% of the state's Medicaid spending and if approved would “harm all Illinois residents.” While the IHA consents changes need to be made, it added that any changes or cuts can't all be made in one year. The $2.7 billion figure comes from what Quinn's staff projects as the cost of Medicaid liabilities in the coming year for the state if no changes are made to the program, IHA President Maryjane Wurth said.

“There's not a lot of detail in what that number involves and entails,” she added. “What's the hospital figure in that? We don't know what their proposals are as far as what the administration suggests as ways to reduce that liability. We are trying to understand more what is behind that devastating figure.”

Quinn's camp first announced the cuts earlier this month, but on Wednesday he said the system needed to be fixed and said there's a group of four state legislators who will work with Healthcare and Family Services Director Julie Hamos to identify what areas could be cut.

Quinn's proposed cuts would force layoffs and elimination of programs, the IHA added. Three of the ways association suggested the state's Medicaid woes could be solved in ways that don't harm providers or beneficiaries, such as expanding the existing hospital assessment program to draw additional federal dollars, enhancing the state's Primary Care Case Management program, and supporting different models of care coordination.

The IHA, meanwhile, is working with Quinn's staff to clarify what makes a not-for-profit hospital exempt from paying property taxes. Those recommendations are due by the end of the month, and talks are trending in the right direction, Wurth added.

The Chicago-based Illinois State Medical Society also opposes the cuts and issued a statement noting that Illinois ranks 41st for Medicaid payment rates: “Medicaid is drastically underfunded to the point of being broken—gutting it further is reckless and irresponsible.”