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Illinois Nursing Homes File Lawsuit Against the State Alleging Delayed Medicaid Reimbursements Could Cause Closures

5 nursing home-related companies have banded together to file a lawsuit against Felicia Norwood, Director of the Illinois Department of Healthcare and Family Services, alleging that the state quietly slashed Medicaid reimbursement rates, a move that shuns a federal law requiring such decisions be made in a public forum.

The lawsuit also states that due to the reduced reimbursements, facilities may have to limit the number of Medicaid patients it accepts, as well as reduce therapies and services provided to residents whose care is funded by Medicaid. The lawsuits asks for a renegotiation of reimbursement rates, with talks to include participation by nursing homes.

The 5 companies involved in the lawsuit are:

  1. Carlyle Healthcare Center in Carlyle, IL
  2. Clinton Manor Living Center in New Baden, IL
  3. Extended Care Clinical (a healthcare consulting firm based in Evanston that currently works with 18 Chicago-area facilities)
  4. Generations Healthcare Network in Lincolnwood, IL, and
  5. St. Vincent’s Home in Quincy, IL

Illinois Owes Nursing Homes Billions in Back Medicaid Payments
According to Skilled Nursing News, the state of Illinois is seriously behind on Medicaid reimbursements. In July, a federal judge ordered the state to repay $586 million a month to attempt to cut the $5 billion currently owed to nursing homes. Illinois is also in trouble with state-funded insurance plans for state employees. In late July, the Chicago Tribune reported that multiple insurance companies were owed hundreds of millions each by the state, forcing employees to prepay for their treatment and even be sent to collections for unpaid bills. Some doctors have begun requiring upfront payments or are refusing to see patients who have state-funded insurance plans who are behind on payments.

As of late June, Cigna was owed $857 million + interest in back payments, Coventry was owed $278 million, Healthlink Open Access Plan (an Anthem subsidiary) was owed $778 million + $56 million in interest. Delta Denta was owed $169 million. The problem is that the longer the debt sits, the more interest it accrues, pushing the state into a spiral of debt from which it may be nearly impossible to recover. Already most of the debt is said to stretch back as far as 2 years.

Cutting Medicaid reimbursements for those in nursing homes and failing to pay doctors for health care according to contracted rates is simply inexcusable. Those who need care the most are at risk of being denied access to nursing homes and therapies and services they desperately need. Rumors have swirled that a standoff between Governor Bruce Rauner (Rep.) and IL Speaker of the House Mike Madigan (Dem.) are to blame for our ballooning debt and inability to figure out a fix. Illinois, it’s time to put party politics aside and work together to find a solution.