Lawmakers push for nursing home reforms this spring; nursing home industry group still pushing back on payment changes

SPRINGFIELD – Several Illinois lawmakers said this week they are determined to pass a bill in the spring that would overhaul the way nursing homes are paid through the state’s Medicaid program to address critical staffing shortages, but the state’s largest nursing home industry group is still pushing back against the proposed changes.

“We need to have something happen this spring, for the sake of the most vulnerable in our state,” Rep. Anna Moeller, D-Elgin, said during a committee hearing Tuesday. “And the point of these hearings is to bring that to light to bring the reality of what people are living through to light.”

Illinois has many of the most understaffed nursing homes in the nation. According to a report by the state Department of Healthcare and Family Services, Illinois consistently ranks last among states in staffing, as measured using the national Staff Time and Resource Intensity Verification, or STRIVE Project, with 47 of the 100 most understaffed facilities in the country.

Mark Cooper, a nursing home resident who declined to identify the facility where he lives, told the committee about the conditions he deals with daily.

“Lately in this particular home, especially in the last year, after apparently this nursing home was bought up by some other owners, there have been filthy conditions, food on the floor, excrement in shower stalls, residents being offered half-filled bowls of Froot Loops as the morning cold cereal option,” he said. “Resident-called lights going on are unanswered for a half hour or more.”

Illinois Medicaid Administrator Kelly Cunningham noted the state has increased funding for nursing homes three times in the past several years for the purpose of increasing staffing, but the shortages persist, particularly with certified nursing assistants, or CNAs.

“Because Medicaid is the single largest purchaser of CNA services, we are in a unique position to influence the purchase of this critical service,” she said. “It’s clear that we need to directly link any new funding to this industry to staffing and quality care improvements in order to bring about the change we’re seeking to give all nursing home residents the quality of life that they deserve.”

Tuesday’s hearing was a joint meeting of four House committees that deal with health care issues. They  are considering a proposal by DHFS to overhaul the way nursing homes are reimbursed by increasing funding and tying payments directly to staffing levels and performance measures.

DHFS Deputy Director Andy Allison said the plan calls for roughly a $400 million increase in Medicaid nursing home funding that would be tied to reaching certain staffing benchmarks, increasing wages for CNAs and achieving higher quality standards.

That would be funded through an increase in the nursing home assessment tax, which generates a pool of money that is used to draw down additional federal Medicaid reimbursements.

“For a facility that’s 100 percent Medicaid, we would come darn close to fully paying for the increased hiring. It was designed in that way,” he said.

But the plan is still facing stiff resistance from the state’s largest nursing home industry group, the Health Care Council of Illinois.

HCCI Executive Director Matt Pickering told the committee that if the agency’s proposed new payment system were enacted, 130 nursing facilities in Illinois would see an overall cut in revenues, with as many as 50 being pushed to the point of insolvency. Those 50 facilities, he said, serve more than 5,000 residents, mainly in rural and minority communities.

Pickering said the nursing home industry in Illinois is already facing financial strains, much of which he blamed on the state’s privatized Medicaid system in which for-profit insurance companies, known as managed care organizations, are in charge of reimbursing providers and managing each patient’s care.

“These challenges have coalesced into what we’ve called the perfect storm for our industry,” he said. “Compounding our financial burdens are the managed care organizations that routinely deny reimbursements to providers who treat low income patients.”

Allison, however, noted in his testimony that the 50 facilities identified by HCCI were all earning high profits before the COVID-19 pandemic and were “exceptionally low staffed, even in comparison to other for-profit homes.”

“The foremost issue for these homes is whether they can staff up,” he said. “So we looked at the cost of staffing up, and even if we were to assign, for example, what  likely is an overstated cost of $29 an hour for the additional hours of nurse staffing that would be required in these homes to get them up to minimal levels as a group, even with those costs under the proposed reforms, in aggregate, these homes would still earn a profit.”

Meanwhile, Rep. Moeller said she argued that it is time for the state to stop funding nursing facilities that provide substandard levels of care.

“I don’t want to continue to subsidize these homes where … fellow nursing home residents have to take care of other residents because there aren’t enough CNAs or nurses on staff,” she said. “We are paying hundreds of millions of dollars to subsidize these homes that that are providing that level of care. That’s obscene. So something needs to change.”

Rep. Deb Conroy, D-Elmhurst, noted that the committees have been working on nursing home payment reform for several months and at one point this fall had what many believed was an “agreed bill” that all of the stakeholders could accept. She said she believes it’s time for the General Assembly to act.

“Might I suggest that the agreed-upon legislation that we had a few months ago be filed, and then those who have issues or would like to see changes, file amendments,” she said. “That way, everyone can see clearly where the issues are. I think it’s important because this has become such a contentious issue. I think it’s very important that all of our colleagues understand exactly what is going on.”

Lawmakers return to Springfield Jan. 4 for what is scheduled to be an abbreviated 2022 session. They hope to wrap up their business by April 8.