In wake of COVID-19 s impact, Illinois lawmakers to consider nursing home funding plan aimed at increasing staffing, improving care

Illinois officials are calling for a fundamental shift in how the state pays nursing homes, a move they say will increase staffing and improve care -- instead of increasing profits.

The effort is also aimed at reducing disparities by which the COVID-19 pandemic hit Black and Latino Medicaid patients disproportionately among nursing home residents, who overall made up more than 40% of all COVID-19-related deaths.

A proposed law to require the changes was introduced Wednesday in the General Assembly. Advocates hope to pass the bill before the spring session concludes at the end of May, but a group representing nursing home operators has raised concerns about the measure.

The stakes are high for both the health care of vulnerable residents and for tax dollars spent. Each year, Illinois spends about $2.5 billion to help take care of 45,000 nursing home residents. Medicaid, by far the largest single payer, covers about 60% of nursing home care.

Theresa Eagleson, director of the Illinois Department of Healthcare and Family Services, which funds the nursing homes, said the state has a "moral obligation" to ensure more accountability for the care of all residents.

"This is for people who don't normally have a voice," Eagleson said. "We think it's well past time to start demanding real change for those people."

But the ongoing pandemic highlighted disparities in who gets adequate care.

The state agency reported that 60% of COVID-19-related deaths in nursing homes between March and July 2020 occurred in bedrooms where at least 10% of resident lived in rooms with three or more people. Black and brown Medicaid patients also were 40% more likely to die with COVID-19 than white residents.

Part of the disparity, regulators said, was also due to understaffing. Yet the most profitable nursing homes, they said, were those with more Medicaid patients that were staffed below federal guidelines.

As an example of the profits some homes make, state regulators cited one unnamed large for-profit group that made almost $18 million from homes that had high Medicaid populations and understaffing, compared with a $1 million loss at homes that had more private payers and proper staffing. In other words, regulators said, the current payment model rewards understaffing.

To address overcrowding, the bill would end payments for rooms with three or more roommates.

Agency officials also proposed changing nursing home compensation to increase as homes hire more nurses and aides, and as they handle more needy patients, such as those with Alzheimer's disease.

The bill would also change the funding formula to be based on a Patient-Driven Payment Model, or PDPM, the new Medicare standard, rather than payments based on the number of services performed.

The proposed changes would be paid for by increasing the assessment fees paid by nursing homes to generate $155 million, of which about $50 million would go to other long-term care needs, including supportive living and home care, Eagleson said. The increased funding would generate an equal amount in matching federal funding, generating about $200 million for payments back to nursing homes.

The bill would enable the department to make that proposal, but specific dollar amounts would still be subject to appropriation.

However, the Health Care Council of Illinois, which represents more than 300 skilled nursing facilities in the state, raised concerns about the proposal with regulators and lawmakers.

The council's executive director, Matt Pickering, issued the following statement: "The fact is we share the same values and goals (the Department of Healthcare and Family Services) does in enhancing care, improving infection control and increasing staffing, but now is not the time to introduce dramatic policy changes that would significantly disrupt the delivery of care while the pandemic is still active."

The trade group warned that many homes are on the brink of closure due to COVID-19 costs and a big drop in occupancy, coupled with Illinois being among the lowest in Medicaid funding.

The Health Care Council of Illinois proposed an alternative approach, including a one-time payment per bed to help facilities recover, while also increasing the nursing home bed tax to the federal maximum. The additional money would go to direct care for staffing, recruitment, wages and other items. The group also asked for a guaranteed rate floor for managed care.

Three times in recent years, Illinois has increased funding for nursing homes to improve staffing. Yet as of 2019, Illinois ranked last in nursing home staffing.

Last year, the state also paid nursing homes an additional $880 million for COVID-19-related costs, not counting the federal Paycheck Protection Program. State officials believe that any additional COVID-19-related funding should address specific safety and quality efforts benefiting residents directly.

State Rep. Anna Moeller, a Democrat from Elgin who is sponsoring the bill in the House, said the pandemic revealed long-standing problems like crowding too many patients into a room with too few workers to take care of them.

"I support making sure we have accountability attached to additional funding for the most vulnerable people in our state," she said.

State Sen. Ann Gillespie, a Democrat from Arlington Heights, who sponsored the nursing home funding bill in the Senate, also issued a statement calling for accountability in nursing home staffing.

(C)2021 Chicago Tribune. Visit chicagotribune.com. Distributed by Tribune Content Agency, LLC.