June 10, 2019

Illinois Nursing Homes to Receive Long Overdue Funding Increase

By Donna Zoellick, Senior Manager, Advisory Services

Illinois Nursing Homes to Receive Long Overdue Funding Increase

Nursing homes in Illinois have historically experienced some of the lowest Medicaid reimbursement rates in the country. The Illinois operators received some good news last week. On June 5, Illinois Governor J.B. Pritzker approved a funding boost that will provide an additional $240 million to nursing homes beginning July 1, 2019. Of this $240 million, $70 million will be allocated to help nursing homes meet minimum staffing requirements. The remaining $170 million will be used to update the support portion of the Medicaid reimbursement rates to nursing facilities.

The Illinois Department of Healthcare and Family Services (HFS) will develop a formula to determine how the $70 million for nurse staffing will be distributed. The formula will be based on the Medicaid bed days therefore bringing more funding to those facilities with a greater number of Medicaid licensed beds. Facilities will be required to submit reports to HFS on a quarterly basis to demonstrate that the additional funds are being properly used. HFS would issue fines to any home that does not meet the required staffing levels. These fines would begin to be issued in 2021.

It was recently uncovered that due to the understaffing of nursing homes, there was an overuse and reliance on psychotropic drugs. There will now be a consent required from either a patient or their guardian before administering any psychotropic drug.

Currently the support portion of a nursing home’s rate is based on the filed cost report dating back to 2004. The support rate includes the reimbursement for items such as food, laundry, maintenance and various administrative costs. It has not been determined how the $170 million increase to the support rates to more current levels will be distributed throughout the State’s nursing homes, but it is suspected that a more current annual cost report will be used to update that portion of the rate.

These increases are long overdue and will provide some much needed relief to the nursing homes in Illinois, especially as the minimum wage increases phase in and other significant costs, including liability insurance escalate at significant rates.

Please contact your Marcum Healthcare professional with any questions.

Related Industry

Healthcare