U.S. OKs increase in nursing home tax to bring in more Medicaid money

U.S. OKs increase in nursing home tax to bring in more Medicaid money


New funds aimed at undoing legacy of violence in Illinois nursing homes

By David Jackson and Gary Marx, Chicago Tribune reporters
12:01 AM CST, January 24, 2012

Federal authorities have approved a nursing home bed tax that will allow Illinois to collect more than $100 million a year in new Medicaid money that officials say will be used to boost facility staffing levels and implement other safety reforms mandated by a landmark 2010 overhaul, the Tribune has learned.

Gov. Pat Quinn, who is expected to announce the federal approval Tuesday, pushed hard for the tax as a way to hire more state inspectors and finance other reforms in Illinois' troubled long-term care system without dipping into the state's already-depleted coffers.

"This is positive news for people who live in a nursing home or have a loved one living in a nursing home," said a statement from Quinn. "It means that our nursing homes get the funds that they need to continue improving safety and the quality of services."

Still, the AARP and some leading advocates for the elderly and disabled raised concerns about the measure, arguing that it will provide a windfall for substandard, profit-making facilities while not doing enough to move thousands of younger mentally ill adults out of nursing homes and into community settings where they could get better care.

Because much of the bed tax will be returned to the nursing homes via the Medicaid program, which funds health care for the poor, facilities with fewer indigent patients will recoup less money. Illinois' nonprofit nursing homes, which generally serve small numbers of Medicaid clients, argue that the tax will penalize them unfairly.

"It is a bad plan for good homes and a good plan for bad homes," said Kirk Riva, vice president of public policy at the Life Services Network, the association of nonprofit facilities. "We think it's offensive."

In July 2010, Quinn signed a sweeping nursing home safety reform law after a Tribune investigation found many poorly staffed facilities were housing dangerous psychiatric patients alongside geriatric and disabled people, sometimes with deadly consequences.

Since then, staffing levels have been raised at the homes, and officials are preparing standards for new behavior management units for the relatively small number of dangerous patients. State authorities also have signed court decrees mandating that Illinois divert thousands of mentally disabled people from nursing homes into an array of smaller, residential and community-based programs.

To meet the reform law's mandates, the state Department of Public Health has hired 54 nursing home surveyors in the last 18 months and expects to use the additional revenue to hire an additional 160 by July of next year. The 54 workers already on the job are "short of what we had hoped for, but we will continue to hire additional staff," Health Department spokeswoman Melaney Arnold said.

Although the reforms are being rolled out over five years, facilities are generally safer, said AARP Associate State Director David Vinkler. "The enforcement has improved. They have got more surveyors on the street, even if not at the level they should be at yet. The nursing homes also have hired additional staff. ... I think we are moving forward."

With the new federal approval, Illinois will increase the bed tax by $6.07 per resident per day, bringing in an estimated $145 million a year in new revenue. Government health care funding rules allow Illinois to match the portion spent on Medicaid services to generate an estimated $110 million and also to capture additional funds.

According to state officials, approximately 86 percent of the total will be given to the facilities to pay for additional staff. Nursing home operators for years have complained that Illinois provides among the lowest reimbursement rates in the country for government-funded patients.

State authorities would use at least $20 million of the bed tax funds to hire the additional inspectors. Another portion of the funds will go toward increased home-based and community care. Spending on both of those measures could bring in additional matching dollars from the federal government.

Vinkler said the AARP had hoped to see less money flowing back to the nursing homes and more going to the state. The group had wanted stronger assurances that nursing home operators will spend the additional funds on measures that improve safety and the quality of care, he added.

Terry Sullivan, regulatory director of the Health Care Council of Illinois, the state's largest nursing home trade association, called the new tax "a tremendous and necessary support" to homes that serve indigent patients.

Those facilities on average lose $27 per patient each day because Illinois' low Medicaid reimbursement rate does not match the cost of care, Sullivan said.

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http://www.chicagotribune.com/health/ct-met-nursing-home-tax-20120124,0,350701.story

Editor's note: Does this mean the nursing home owners will have to pay bigger kick backs? Lucius Verenus, Schoolmaster, ProbateSharks.com