Old folks. Who cares?
New state funding helps. But it’s not enough.
For senior care advocates in Illinois, a state funding increase is a reason for optimism after a prolonged period of government disinvestment. The financial crisis was marked by a crippling two-year state budget impasse which continues to leave its mark on social service providers.
But advocates for nursing homes and home-based senior care agree there is a long way to go to ensure long-term sustainability for Medicaid-funded senior care programs, especially as the baby boomer generation continues to age into long-term care systems.
“The last four years were particularly hard on our members, and many of them worked with their financial institutions on lines of credit or any sort of loans that could keep the business operational and providing care and services for seniors,” said Liz Vogt, who represents the advocacy group Illinois Association of Community Care Program Homecare Providers, which is headquartered in Springfield.
“Unfortunately, there were several that did close during the budget impasse because they exhausted resources and couldn’t continue on. So, the fact that we have a budget and providers are being paid in a timely manner and the fact that there was an increase approved this year are just hugely beneficial to the overall sustainability of this program,” she added.
The Community Care Program, which offers non-medical in-home care, is on one end of a continuum of senior care providers in the state. On the other end are skilled-care and intermediate-care nursing homes, which house the state’s sickest and most vulnerable elderly populations. Other programs include medical in-home services and light-care, non-medical living facilities.
Advocates from the Health Care Council of Illinois, a group that represents nursing homes, described the industry as “already in crisis” before new funding was received this year to make up a little more than one-third of an anticipated $649 million industry-wide single-year funding shortfall.
“This money means survival,” Pat Comstock, executive director of the nursing home advocacy group Health Care Council of Illinois, said in a June interview. “Our members are thrilled, but they’re also relieved because these dollars are going to provide some much needed relief from the struggles to survive that members are experiencing.”
The Community Care Program is an age-in-place service that assists seniors in maintaining their independence through non-medical care, such as providing meals and other support services. Participants must be over the age of 60 and possess less than $17,500 in countable financial resources excluding their home.
Per the new operating budget, the CCP and all associated services will receive approximately $960 million in funding this fiscal year, up from $870 million the year before.
Part of the additional money will go to increasing the Medicaid reimbursement rate that pays for the CCP, first with a 10.9 percent increase in September to support a $12 hourly wage for workers, then with a 7.7 percent increase on top of that in January 2020. The second raise is pending federal government approval and would support a $13 hourly wage. Currently, the reimbursement rate supports an $11 hourly wage, Vogt said.
Per state law, 77 percent of the reimbursement funding must be paid to direct support staff, while the rest goes to administrative costs, supplies, facilities and other associated expenditures.
“I would say that we are coming to a point where stability is the word that we would probably use,” Vogt said. “Once that enhanced rate starts coming in, I think providers will feel a lot better about their situation.”
Vogt also represents the Illinois Homecare and Hospice Council, an advocacy group for medical home health care providers, which is also headquartered in Springfield. That group represents home health agencies, which provide skilled nursing services in the home and are covered by Medicaid.
Currently, home health providers are reimbursed on a per-visit basis at a rate of $72, while the cost of care is actually around $160. A $5.2 million increase to the program beginning Jan. 1, 2020, will allow the Illinois Department of Healthcare and Family Services to increase the rate. The amount of the increase is yet to be determined.
Vogt said hospice care, which is home care for end-of-life situations, is generally funded through Medicare and has not faced the same struggles as Medicaid-funded senior care services.
While at-home care programs allow seniors to stay in their own homes until later in their lives, there often comes a time when more skilled, around-the-clock care is needed and placement in a skilled- or intermediate-care nursing facility becomes necessary.
As the baby boomer generation ages into long-term care and Illinois’ elderly population is set to triple in the next 30 years, nursing home advocates are hopeful that new state funding can stem a tide of facility closures that has been rising since March 2014.
Skilled-care and intermediate-care homes will see an increase of $240 million this fiscal year – $120 million from the state and $120 million from the federal government. Of that money, $70 million will be directly appropriated to help nursing homes meet minimum staffing requirements, while $170 million will update the reimbursement formula for support costs such as food, utilities, maintenance and equipment.
But according to a study commissioned by HCCI and conducted by the business advisory firm Plante Moran, the $240 million makes up only slightly more than one-third of an anticipated $649 million single-year industrywide funding shortfall caused by inadequate Medicaid reimbursement rates.
“Certainly we aren’t out of the woods yet, when you consider that the Plante Moran study found that we were over $600 million underfunded and this gets us about a third of that,” Comstock said in June. “So it’s something that we’re going to have to continue to talk about as we move forward.”
The Supportive Living Program is another Illinois senior care program which houses Medicaid recipients. It offers apartment-style living with intermittent nursing services, meals and other services for persons age 22 to 64 who have a physical disability or persons age 65 or over.
It will see increased funding as well, with new money dedicated to keeping the homes funded at 60 percent of nursing home funding.
Continued financial strains
While Comstock said added funding could help stop or slow the pace of nursing home closures, for several homes and communities, the increased state investment is too late.
The number of nursing homes that have closed since March 2014 grew to 23 last month. The latest three were closed in Amboy in April, Champaign in May, and Bethalto on July 24.
The board of Pleasant Hill Village, a state-licensed Girard nursing home which closed its doors in August 2018 “under the burden of $2 million of non-compensated care,” recently filed for chapter 11 bankruptcy, citing in a news release “unprecedented and sustained non-payment from Illinois Medicaid.”
Pleasant Hill Village was established in 1905 as a home for orphans and the elderly and is a ministry of the Church of the Brethren. It operated a state-licensed nursing home since 1975. Its board is seeking bankruptcy protection in the interest of sustaining its senior independent and assisted living facilities, which are also located on the Girard campus.
Pleasant Hill is also still seeking payment from the state for care already provided at the now-closed nursing home.
“The thing is, we’re trying to settle some accounts. We provided years of care for these residents without reimbursement, and that’s why we had to close the nursing home in August 2018,” said Allen Krall of Springfield, president of Pleasant Hill’s board of directors. “That’s why, a year later, we still have so much outstanding debt that we filed chapter 11 bankruptcy.”
Krall said the plight of nursing homes over the past five years was felt especially strongly in smaller, nonprofit homes such as Pleasant Hill, which was licensed for 99 beds.
Krall said that’s because bigger companies, which often own multiple facilities, can staff larger departments to deal with state reimbursement issues, while facilities like Pleasant Hill cannot afford large billing or administration staffs.
“You know, a small standalone charitable operation like Pleasant Hill, we have one person to do that. And the administrative burden, the bureaucratic burden, was more than we could deal with,” he said.
Krall said that nursing homes with higher Medicaid populations have a harder time staying afloat financially because of the Medicaid reimbursement shortfall.
Because Pleasant Hill was a ministry aimed at providing for the neediest and most vulnerable in the Girard area, Medicaid-based losses and funding delays became unsustainable for the organization, Krall said.
Senior care advocates are also optimistic that some of the bureaucratic burden will be alleviated through a new Medicaid managed care reform aimed at bridging the communication gap between providers and insurers.
Under the managed care system, insurance companies are paid a flat, per-patient monthly fee to manage the care of most Medicaid recipients. These Managed Care Organizations (MCOs) are required to reimburse health care providers and make sure patients receive follow-up care.
The package of reforms passed in Senate Bill 1321 gives the Department of Healthcare and Family Services a greater role in coordinating claims and providing a one-stop database that will help determine what is causing denials; lays out parameters of a DHFS-run complaint portal where providers can challenge denials; requires DHFS to work with stakeholders to “enhance and improve operational performance” of the managed care system; and creates a dispute resolution process in which DHFS has final say over whether a claim denial is permissible.
It also creates an “expedited provider list” to speed payments to health care providers with the greatest financial needs, establishes late payment interest penalties when an MCO does not pay a provider within 30 days of receipt of the claim, and requires the DHFS and MCOs to work toward the creation of consistent billing practices to be applied across MCOs.
“We are hopeful the recent Medicaid omnibus legislation that passed the Illinois General Assembly will increase MCOs’ accountability to the state,” the IACCPHP said in a statement. “Over 30,000 CCP clients are currently enrolled with an MCO, and this number is expected to double in the near future as Medicaid fee-for-service clients transition to managed care. It is more important than ever that the MCOs have clear and transparent policies, procedures and processes in order for providers to efficiently serve CCP (Community Care Program) clients. Our goal is to facilitate meaningful conversation between CCP providers and MCOs during this transition.”
While the new funding outlook is encouraging for those in the industry, advocates said the added money to account for an increasing minimum wage does not solve the issue of staffing difficulties for senior care providers.
That’s because there’s a statewide shortage of health care professionals, leading to shortages in several areas, according to the HCCI, often making it necessary for providers to pay sign-on bonuses.
The HCCI is hopeful that nursing home staffing pressures will be somewhat relieved through added funding and another new program which would be established by a bill awaiting Gov. J.B. Pritzker’s signature.
That bill, Senate Bill 1573, would use half of penalties paid by nursing homes for state violations to fund scholarships and other financial aid for persons wishing to become certified nursing assistants, licensed practical nurses or registered nurses to help fill industry workforce shortages. This would be accomplished by a partnership between the Department of Public Health and state community colleges and universities.
Vogt said she expects staffing to remain a difficulty for the home-care industry as long as the reimbursement rate is tied to the minimum wage. That’s because, she said, less strenuous work is often compensated at the same rate as senior care work, which can be more taxing.
“It’s often difficult work, and if you can get paid the same amount somewhere for work that’s not as physically taxing, it’s hard to compete with that,” she said.
On top of that, Vogt said, the Medicaid reimbursement rate will have to be continually reexamined since it is tied to the minimum wage, and further state government action will likely be necessary.
“Any changes or increases or acceleration in the minimum wage will necessitate a larger investment by the Illinois General Assembly to provide funding for the community care program,” Vogt said. “This is just sort of one step in a process in educating and working with partners in the General Assembly and at state agencies to make sure that the program is sustainable in the long term.”
Contact Jerry Nowicki at Jnowicki@capitolnewsillinois.com.
Fletcher Farrar, editor of Illinois Times, is a member of the board of Pleasant Hill Village, the nonprofit senior care facility described in this report.