Illinois Could Owe Nursing Homes $300M Due to Medicaid Eligibility Backlog

Illinois could be on the hook for approximately $300 million in nursing care expenses due to a backlog in determining residents’ Medicaid eligibility — all while the state’s providers have been footing the bill in the interim.

The Office of Illinois Comptroller Susana Mendoza released a report Thursday that found a sizable logjam of pending Medicaid eligibility determinations for long-term care patients that are more than 90 days old.

The Associated Press first reported on the price tag for the backlog.


As of the end of May of this year, there were 16,378 pending admissions, according to a new report from the comptroller’s office, though pending applications and admissions have declined to 3,462 and 14,572, respectively this month.

The cost of the pending admissions varies depending on estimates, but the AP said private Illinois nursing homes are fronting $300 million for residential care because of how far behind the state has lagged. The release from the comptroller’s office cited the AP estimate when noting how much the 16,378 pending admissions would cost.

Issues coming to a head


Whatever the exact number, the bill from the Medicaid eligibility backlog has been a long time in coming. States usually are required to determine eligibility for Medicaid within 45 days, and Illinois has struggled for a long time to meet this timeframe, according to Matthew Werner, a consultant who works with LeadingAge Illinois, the Illinois Health Care Association and the Affordable Assisted Living Coalition on Medicaid and other health care issues.

Because the state has not made determinations on eligibility, 14,572 people in nursing homes and supportive living facilities are being cared for without the state reimbursing the operators for their services.

A ruling by federal Judge Joan Gottschall on March 29 ordered Illinois to determine the eligibility of pending Medicaid applications by this Thursday or pay the long-term care and other Medicaid benefits for those whose applications still awaited response past the 45-day deadline.

Illinois has asked the judge to reconsider, but while Gottschall accepted its briefings, she has not yet made a ruling on that request, Werner said.

“During the course of this last [legislative] session here in Illinois, in the spring session, $300 million is the back-of-the-napkin kind of calculation that everyone carried buried in their heads,” he told Skilled Nursing News.

It would be a new fiscal blow for a state that’s already sustained several such hits over long-term care costs. In July 2017, the state was ordered to pay its Medicaid bills to the tune of $586 million per month. In January of this year, a group of five nursing home providers sued the state in federal court over low Medicaid reimbursement rates.

“Say we can all bill tomorrow — then there’s suddenly $300 million of liability on the state’s books that wasn’t there before,” Werner said.

That said, the members of the state’s General Assembly have accounted for this expense in the budget, and there’s legislation pending on Gov. Bruce Rauner’s desk that would force the state to cover the costs of care for Medicaid applications that are pending past the 45-day deadline, Werner said.

Medicaid remains the largest payer for skilled nursing services nationally, with a 62% share of all residents according to the Kaiser Family Foundation.

Nursing homes waiting for answers

Petersen Healthcare, which has dozens of locations — mostly in Illinois — and about 5,200 skilled nursing beds, has felt the impact of the pending applications. The company is currently caring for 838 residents whose Medicaid applications are pending, vice president of operations Greg Wilson told SNN.

But those are just current residents: The company has seen about 3,000 cases in which it has cared for Medicaid patients awaiting authorization, and the Illinois Department of Healthcare and Family Services hasn’t made a determination on the applications, Wilson added.

The financial impact has forced Peterson to defer maintenance and other expenses in order to offset the effect on its cash flow.

“We’re big enough and diversified enough that we’re able to take care of our residents and meet our obligations and pay our staff,” he said. “But we might want to replace roofs on certain buildings and have to hold off … it just makes us wait on dealing with the wear and tear on certain buildings.”

He declined to say how much Illinois currently owes the company, but said the amount fluctuates in the “tens of millions” range.

Written by Maggie Flynn

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