Illinois Department of Health and Family Services officials say they made “significant progress” last week in reaching agreement on a plan to overhaul how nursing homes are reimbursed by through the state Medicaid program, according to a letter obtained by Capitol News Illinois.
It’s something Gov. JB Pritzker’s administration has been working on for the past two years to ease the severe staffing shortages that exist at many long-term care facilities across the state. An estimated 45,000 Illinois Medicaid recipients live in approximately 700 nursing homes across the state.
In its budget proposal in February, Pritzker proposed a $500 million plan to increase reimbursement rates for facilities that increase staffing to certain targets. Some of the money would also be used to fund pay increases for certified practical nurses as they gain more experience in their jobs.
The money for that would come from a bed tax the state levies on nursing homes, which would result in additional federal refunds.
This plan had strong support from seniors advocacy group AARP Illinois and some segments of the nursing home industry. But he faced resistance from the state’s largest nursing home industry lobby group, the Health Care Council of Illinois.
But HFS officials believe the impasse may have been resolved earlier this week.
On March 29, HFS officials met with HCCI board members and finally reached what could be a deal. In an emailed letter two days later to HCCI executives, HFS Director Theresa Eagleson summarized the proposed deal.
According to the letter, a copy of which was obtained by Capitol News Illinois, HCCI agreed to a tax that would be set by the department and incentive payments based on nursing home staff hours.
But the letter says HCCI is seeking additional provisions at a cost of about $200 million that HFS has apparently decided to leave to the state’s regular budgeting process.
These include the transition to the new formula over an 18-month period, a “transitional prepayment” for new hires for six months, and an additional payment for nursing homes above the Medicaid average that would not be not linked to improving the quality of care. .
The letter said the agency “cannot speak to the availability of funds” beyond the $500 million included in Pritzker’s budget proposal, which “would cover the cost of substantial changes and result in quality improvements long-awaited” in nursing homes.
“We view this total package, with or without the additional base rate funding, as an important and intensely needed step in improving care for residents of Illinois nursing homes,” Eagleson said in the letter. “We are delighted with the progress made this week in reaching agreement on these much-needed reforms, and we look forward to working with you and other industry groups to codify these substantial changes.”
The letter also said HCCI was asking for an additional $25 million for an increase in the base reimbursement rate, unrelated to quality improvements.
An HCCI spokesperson did not confirm that those agreements had been reached or provide further details, and lawmakers involved in the health budget negotiations did not respond to requests for comment.
Capitol News Illinois is a nonprofit, nonpartisan news service covering state government and distributed to more than 400 newspapers statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.