Medicaid payment backlog cripples supportive living centers.
By DEAN OLSEN (
dean.olsen@sj-r.com)
The Associated Press
Posted Jan 02, 2012 @ 11:00 PM
Last update Jan 03, 2012 @ 05:49 AM
Medicaid payment delays of up to six months are causing fits for supportive living centers throughout Illinois, and some owners are worried they may have to close if the situation doesn’t improve soon.
“It’s a crisis for us because reserves and lines of credit are being exhausted,” Wayne Smallwood, executive director of the Springfield-based Affordable Assisted Living Coalition, said last week. “This is the worst we’ve seen, and there’s no relief in sight.”
Illinois’ festering budget problems, the sagging economy and the end of the federal economic stimulus program in June have contributed to growing payment delays that also hamstring nursing homes, hospitals, doctors and other medical providers.
Gov. Pat Quinn’s proposed borrowing plan has failed to gain traction in the Illinois General Assembly, but the Quinn administration is working with the Illinois Finance Authority on a voluntary program that could provide temporary relief for Medicaid providers.
The Medicaid Vendor Payment Program, which could begin in January or February, would allow private investors to “buy” up to $2 billion in outstanding Medicaid bills. The investors would be repaid by the state later — with interest — while Medicaid providers would receive quick infusions of cash.
“We are hoping to have established a vendor payment program for the Medicaid-based vendors in about a month’s time, but obviously there are several steps along the way,” said Alka Nayyar, spokeswoman for the Illinois Department of Central Management Services.
$2 billion behind
The Illinois Department of Healthcare and Family Services has delayed payment of about $2 billion in payments to Medicaid providers since the fiscal year began July 1.
The delay followed the end of the economic stimulus program, which sent more than $3 billion in additional federal Medicaid funds to Illinois over a 27-month period and required the state to pay Medicaid providers promptly.
Quinn decided to delay Medicaid payments, rather than cut Medicaid rates 6 percent in the current fiscal year, as part of a deal with supportive living centers, hospitals, nursing homes and other vendors.
But the agreement doesn’t shield vendors from the financial suffering, Smallwood said. Most of the state’s 133 supportive living centers haven’t received any Medicaid payments since June and don’t know when those payments will resume, he said.
Nursing home industry spokeswoman Pat Comstock, executive director of the Health Care Council of Illinois, said a notice from state officials Friday indicates many nursing homes may receive checks in January for services rendered to Medicaid patients in July.
That’s good news, Comstock said, but there’s no guarantee that monthly checks — even for services provided six months earlier — will be sent in February and beyond. Nursing homes are owed a total of $800 million in Medicaid payments, she said.
“It’s a challenging situation for everyone, but we feel like we should be a partner with the state,” Comstock said.
Can’t borrow more
Dr. Robert Russell, a Springfield plastic surgeon, isn’t so understanding. He is part-owner of three nursing homes — in Mowequa, Centralia and Pinckneyville — and the Mowequa home hasn’t received Medicaid payments for six months.
“It’s criminal,” he said. “We can’t borrow any more to keep these open. We have to find a way for the state to pay its bills.”
Russell said the homes in Mowequa and Pinckneyville have struggled to pay their workers, and a bank has refused to further extend a line of credit because of the state’s financial situation.
Lincoln resident Joyce Pinney, chief executive officer of the three nursing homes, said she is discouraged.
“The state of Illinois doesn’t care,” she said.
Springfield’s three supportive living centers — Mary Bryant Home for the Blind and Visually Impaired, Timberlake Senior Living and Springfield Supportive Living Center — receive “expedited” Medicaid payments, which have been three months late, because 80 percent or more of their residents have low incomes and are covered by Medicaid.
Without the expedited payments, “we wouldn’t be open,” said Chuck Sheets, a Chicago lawyer and managing partner of Springfield Supportive Living, 2034 Clear Lake Ave.
“We’re very fortunate,” he said.
Sheets handles legal work for several Illinois nursing homes and supportive living facilities that haven’t been paid in six months.
“They’re dying,” he said.
Tim Searby, director of not-for-profit Castle Manor Supportive Living in Lincoln, said not being paid by Medicaid for six months “makes it hard.” About half of the facility’s 53 residents are covered by Medicaid.
Castle Manor opened less than a year ago and still has some cash reserves, Searby said, but he worries that the payment delay will get worse.
1 of 3 hospitals in red
The six-month delay also is a concern at Knollwood Retirement Village in Jacksonville, according to Springfield resident Linda Renee Baker, a consultant for the supportive living facility.
Knollwood hasn’t had to lay off staff or delay issuing paychecks to employees, at least not yet, said Baker, a former director of the Illinois Department of Human Services.
“As the payments get slow, the day of reckoning comes,” she said.
Illinois hospitals are hurting, too, said Danny Chun, spokesman for the Illinois Hospital Association, but they know not a lot can be done.
“The state has no money,” Chun said.
One of every three Illinois hospitals is operating in the red, and officials at many of those hospitals say Medicaid delays add to their financial burden.
St. John’s Hospital, one of the hospitals losing money on patient care, is owed $21 million from Medicaid and $13.6 million from insurance plans covering state employees, retirees and their dependents, according to St. John’s spokesman Tim Butler.
Memorial Medical Center is operating in the black, but is owed about $13 million from Medicaid, said Mitch Johnson, Memorial Health System senior vice president.
Memorial is owed another $43 million from insurance plans covering state employees, retirees and dependents, Johnson said.
1 percent monthly late fee
The state’s supportive living program, which began in 1999, uses Medicaid dollars to subsidize the care of 60 percent of the 9,000 people at supportive living centers throughout the state, Smallwood said.
Supportive living centers provide limited nursing care and are similar to private-pay-only assisted-living centers. Supportive living centers in Illinois never have encountered the current level of delays, Smallwood said. The centers are collectively owed about $50 million from Medicaid.
Many of the centers would participate in a state-administered vendor payment program if they couldn’t be assured of receiving regular monthly Medicaid payments for the remainder of the fiscal year, he said.
The Illinois Finance Authority already has given the payment program approval, and Wells Fargo has been tentatively selected as the program’s administrator, according to IFA executive director Christopher Meister.
The incentive for investors to participate would be the 1 percent-per-month late fees the state must pay Medicaid vendors whose bills are paid more than 90 days late. Investors, rather than Medicaid vendors, would receive those fees.
Late fees currently being paid to Medicaid vendors, based on provisions of the state’s Prompt Payment Act, are running about a year behind, according to Illinois Comptroller Judy Baar Topinka’s office.
http://www.sj-r.com/thedome/x352566413/Vendor-payment-program-could-ease-states-Medicaid-crisis
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