A Year After SNF Closure, Illinois’s Medicaid Issues Lead to Bankruptcy for Non-Profit Operator

Because of delays by the Illinois government in processing Medicaid coverage applications, the non-profit operator of a skilled nursing facility that closed a year ago is now declaring bankruptcy.

The State Journal-Register reported the news August 16th.

The state of Illinois made headlines last year for a multi-million Medicaid eligibility backlog, and it already had a reputation as being a challenging state when it comes to Medicaid payment and processes.

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For the Pleasant Hill Village facility in Girard, Ill., the challenges of Medicaid remained despite laws that were enacted last year to ease the backlog.

The 98-bed SNF closed in August of last year, and the not-for-profit organization that operated it will be filing for Chapter 11 bankruptcy protection, according to the State Journal-Register. Officials at the SNF said in July of last year that they were waiting on $2.3 million in Medicaid payments.

Pleasant Hill Village filed for bankruptcy to give the organization enough time to find a way to pay the unpaid debts to vendors that served the SNF, and to continue to operate a building with 25 assisted living and 23 independent living apartments, director of operations Dawn Smith told the publication. The case puts lawsuits by two of the unpaid vendors on hold, and it does not imperil the future of the rest of the Pleasant Hill Village complex, according to Smith.

Pleasant Hill Village is still owed almost $1 million by the Illinois Medicaid program, connected to the care of 15 to 20 people who lived in the SNF portion of the facility. Some of the expenses go back to care provided in 2015, and Smith predicted that the facility is unlikely to see at least $600,000 of the unpaid amount.

The backlog in Medicaid applications came partly because of an increase in applications under Illinois’ expansion of Medicaid eligibility, and partly with moves to centralize the processing of long-term care Medicaid applications in some parts of the state, Matt Hartman, executive director of the Illinois Health Care Association, told the Journal-Register.

The Illinois Department of Human Services has reduced the long-term-care application backlog by 15% in the past three months, department spokeswoman Meghan Powers told the publication.

In addition to processing delays, Illinois operators have also had to deal with Medicaid rates that often do not cover the cost of care. Back in April, a nursing home advocacy group determined that 20 properties in the Land of Lincoln have closed since 2014 as a direct result of Medicaid underfunding; the state has since implemented payment increases that will bring $240 million in extra funding to the state’s SNFs in the coming fiscal year.

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