Medicaid funding shortfalls causing Illinois nursing homes to close: report

SHARE Medicaid funding shortfalls causing Illinois nursing homes to close: report

Steve Dean, mayor of the 3,500-population McLean County city of LeRoy, stands on the grounds of the now-closed LeRoy Manor and Liberty Village nursing home. The facility is one of 20 state-licensed nursing homes that have closed since 2014. | Jerry Nowicki/Capitol News Illinois

SPRINGFIELD — Twenty state-licensed skilled-care nursing homes have closed for financial reasons since March 2014, while many of those continuing to serve the state’s neediest elderly populations face staffing shortages and operating deficits caused by diminishing state government investment.

Nursing home advocates warn this trend could lead to a lack of available care for Illinois’ aging population within a decade.

“These facilities are closing, and I can tell you more are going to close,” said Pat Comstock, executive director of the Health Care Council of Illinois, a nursing home advocacy group. “It’s happening because we have a situation in Illinois where they can no longer financially survive.”

The pace of closures has quickened in recent years, with five skilled-care nursing facilities – those that house the sickest and most vulnerable – closing from 2014 to 2016, six closing in each of 2017 and 2018, and three already shutting their doors in 2019, according to the Illinois Department of Public Health.

A study commissioned by the Health Care Council concluded Illinois ranks 49th in the nation for Medicaid reimbursement rates, and nursing homes lose about $15,000 per year – or an average of $41 per day – for each Medicaid-funded patient. Those shortages create a $649 million shortfall yearly for the industry in Illinois.

“One of the really sad things about this is that when you close facilities, you create access problems for the elderly and you create additional challenges for families,” Comstock said.

The senior advocacy group AARP detailed in its own report earlier this year that Illinois nursing homes have the worst patient-to-staff ratio in the nation, leading to the second-worst rate for administering antipsychotic drugs to sedate patients without a psychiatric diagnosis.

“Inadequate staffing at many Illinois nursing homes leaves residents neglected, malnourished, suffering from bed sores or worse,” said Ryan Gruenenfelder, director of advocacy and outreach for AARP.


Lawmakers push for Medicaid managed care reform

AARP-backed bill would penalize nursing homes for staff shortages

Aldermen move to create senior and nursing home ‘safety zones’

The poor staffing ratio persists despite state mandates on minimum hours of care per patient at state-licensed nursing facilities. Senate Bill 1510, which passed the Senate by a 39-19 vote on April 10, would establish fines for nursing homes that fail to meet mandated staffing levels.

But the Health Care Council said the legislation fails to address the root cause of staffing shortages.

“Medicaid rates have failed to keep pace with the actual cost of care in Illinois,” said Amanda Ginther, vice president of the nursing home group.

The state provides 27 percent of funding for the roughly 740 intermediate- and skilled-care homes it licenses. The facilities themselves provide 23 percent of their funding through a pair of taxes on beds, which legally cannot be passed on to residents. The federal government provides the other half of funding by matching state and provider contributions.

But the state’s share of the funding is shrinking, because Illinois’ structural reimbursement rate is based on years-old market costs for nursing (2014), support (2004) and capital (1999) expenses.

Comstock said the industry “never really recovered” from a multi-year state budget impasse that included a temporary funding cut by former Republican Gov. Bruce Rauner’s administration in 2015.

Historically, the losses incurred by caring for Medicaid patients have been at least partially offset by private payers living at the same facility. But the number of those patients living at nursing homes is shrinking.

“Nursing homes are no longer like the old-age homes that one would think of, they’re no longer grandma in the corner knitting and grandpa playing pinochle with his buddies,” Ginther said. “They’re incredibly sick, fragile people that require medically complex care around the clock.”

The HCCI has proposed a series of legislative fixes, the cornerstone of which is a $100 million increase in state funding to skilled- and intermediate-care nursing homes for the upcoming fiscal year. The federal government would match that number, bringing the total added investment to $200 million.

The HCCI is optimistic about that request, as Democratic Gov. J.B. Pritzker’s proposed budget includes an estimated $390 million in added revenue from a tax on managed care organizations that would bring more money into the Medicaid system.

The Latest
People who read don’t censor books, writes Natalie Moore, who talked with the former head of the American Library Association about the current wave of book bans across the country.
The Platform Committee — some 200 Democrats from 57 states and territories — will hold a virtual hearing on July 9.
Count Fedde among GM Chris Getz’s most valuable commodities.
The All-Star Game, which will feature Team USA and a team of WNBA All-Stars, will be played in Phoenix on July 20.