Lawmakers on Tuesday will again hear the case for overhauling how nursing homes in Illinois get paid — and the case against Gov. JB Pritzker’s exact plans for how the system should change.
The state’s largest nursing home industry group, the Health Care Council of Illinois, agreed to the concept in principle in late October following months of negotiations. But talks have again broken down in the weeks since, with the two sides blaming each other for a failure to come to a compromise.
Illinois’ other two major nursing home industry groups months ago negotiated HFS’ proposal to a version they’re comfortable with, and are now staking out the other side in a fight that could come to a head as soon as lawmakers head back to Springfield in early January.
Carrots and sticks
Pritzker’s Department of Family and Healthcare Services is proposing a more-than-$600 million increase in nursing home Medicaid reimbursement rates, some of which would come from an increase to the state’s nursing home bed tax in order to attract more federal Medicaid reimbursements.
The reimbursement increase to nursing homes would be the latest in a string of funding hikes to the industry since 2014 meant to increase staffing in facilities — a long-standing issue exacerbated by the pandemic. But for reasons HFS and the state’s largest nursing home industry group disagree on, staffing levels did not substantially improve after those reimbursement increases.
So the agency’s proposal would tie the new Medicaid reimbursements to facilities’ staffing levels and other metrics, including safety. For years, Illinois nursing homes have ranked the lowest among states for its staff to patient ratios, with some of the lowest staffing levels in homes that are consistently rated poorly by both CMS and patient satisfaction surveys — the same facilities that are also most likely to house the most Black and brown residents, who died from COVID at disproportionate rates compared to white nursing home residents in Illinois.
But HCCI, which has the largest membership of nursing homes that accept Medicaid patients, places the blame for perpetually inadequate staffing levels and high turnover on the state. HFS, the group says, has not responded to its members’ needs for increased Medicaid reimbursements.
“Really every nursing home in the state of Illinois is experiencing a staffing crisis,” HCCI Executive Director Matt Pickering told NPR Illinois. “They're experiencing a funding crisis. And they are really at their tipping point.”
HFS spokeswoman Jamie Munks, however, redirected the debate over staffing levels to the agency’s recent history increasing Medicaid reimbursements to the tune of $330 million in eight years.
“In the past, increased funding has not always been used by long-term care providers to improve care, and HFS believes that additional funding must be tied to quality improvements to patient care, especially in light of the pandemic shining a light on the disparities in care being provided across facilities,” Munks said in a statement. “The Department believes it is critical that additional funds for nursing homes go to increase staff and improve care, and not to executive profits.”
A report commissioned by the state’s Department of Public Health last year gave HCCI more cover in its campaign to deflect blame from its members; the independent report found IDPH had not exercised its power to enforce skilled nursing facility staffing ratio requirements and left key regulatory roles unfilled.
HCCI’s members are the facilities most affected by an overhaul to Medicaid reimbursements. The group has wielded this fact to slow negotiations, saying a pandemic is the worst possible time to put extra costs on its members, which have already borne significant costs due to COVID. Those costs range from personal protective equipment to a wave of wrongful death litigation after Pritzker reversed an early pandemic order granting nursing homes legal immunity from COVID-related cases.
In a letter to HFS Director Theresa Eagleson last month, HCCI said the agency’s Medicaid overhaul plans would cause cause an “adverse [financial] impact” to 130 nursing homes in Illinois.
But the other two large nursing home industry groups in Illinois claim HCCI is inflating its numbers to further delay a deal on the overhaul.
Illinois Health Care Association Executive Director Matt Hartman told NPR Illinois that HCCI’s members will not be the big “losers” that HCCI is claiming, and rejected the binary notion that facilities would be locked into being either a “winner” or loser” once the overhaul is in place.
"Frankly they’re losing because they’re not providing the...staffing or quality of care that they should be providing,” Hartman said. “So they have the opportunity to change those things under in this model to see additional funding, which will help them to stay afloat. And if they aren't staying afloat, do we want providers in the system who aren't going to provide the quality of care that their residents need?"
Closures loom — but no agreement on scope of problem or who’s to blame
HCCI claims 50 of those 130 nursing homes the group identified for HFS are in danger of seeing an “adverse impact” of “an average of approximately $500,000,” which could spell closures for those facilities.
The group has been warning of a wave of nursing home closures for months, and point to two Springfield-area facility closures announced this fall. The second-largest nursing home in Springfield, Heritage Health, will close this week after announcing in October, displacing more than 100 residents and 180 employees. And St. Joseph’s Home of Springfield, a not-for-profit home operated by the Sisters of St. Francis of the Immaculate Conception for more than 100 years also closed this month.
Both facilities cited staffing issues in their closure notices — an issue that predated COVID but was exacerbated by the pandemic. According to the national Staff Time and Resource Intensity Verification, or STRIVE Project, Illinois accounts for 47 of the 100 most understaffed facilities in the nation when comparing actual staffing levels against their target levels within STRIVE.
In its letter to HFS last month, however, HCCI panned the agency’s STRIVE-related goals as impossible and punitive to the 50 homes in most danger of closure.
“Loss of these facilities would create an access problem for 5,000 residents residing mostly in rural and minority communities,” the letter said.
Pickering said he did not believe HFS had a plan for how to re-house thousands of nursing home residents if their facilities closed due to Medicaid reimbursements.
The agency, however, dismisses HCCI’s claims that 50 facilities are on the chopping block — and so do the state’s two other nursing home groups.
Hartman told NPR Illinois his group has looked into HCCI’s membership and found those facilities Pickering claims are in danger are actually fine. He cites the fact that many of the nursing homes on HCCI’s list have recently been bought by chains that have been expanding their portfolios.
But Hartman agreed that Illinois’ nursing home industry would see a spate of closures — just not for the reasons HCCI claims.
“Closures have escalated since the beginning of the [pandemic],” Hartman said. “They haven’t slowed down. So if we want to avoid closures — which is one of the contentions of HCCI, is that doing this would cause closures — we’re already seeing closures. Our staffing concerns are already in a horrendous place. If we don’t do this, those problems will worsen.”
Hartman said his group has tried reaching out to HCCI to get an agreement among all parties, especially as every quarter the proposal isn’t implemented, HFS estimates the state is losing out on an additional $75 million in increased federal Medicaid matching dollars.
HCCI maintains that as the group representing facilities with the most Medicaid beds, its members have the most to lose.
Further, Pickering said he’s been asking third parties — including legislators — to ask for objective feedback on what HCCI is asking HFS for.
“We needed to know, ‘Are we being reasonable here? Are we missing something here?’” Pickering said. “And everyone who is not in the heat of battle in this situation has told us that that is completely reasonable to ask for…So if you're going to completely change a reimbursement system for every nursing home in the state of Illinois, you must have transparency.”
