Governor Signs Equity-Based Nursing Home Fee Reform Legislation

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CHICAGO — Governor Pritzker signed equity-based nursing home tariff legislation yesterday in hopes of improving care for nursing home residents across Illinois. The legislation holds facility owners accountable by tying new funding to improving care for vulnerable residents. The funding increase will now be tied to staffing levels as well as a new salary scale for certified practical nurses that increases salaries based on years of experience.

“From day one of my administration, I have made it clear that everyone deserves affordable, quality health care,” Governor JB Pritzker said. “With today’s signing, Illinois will no longer tolerate a focus on profits over people, especially to the detriment of our most vulnerable Illinois.”

Additional funding will be dedicated to addressing increased costs in nursing facilities due to labor shortages and wage increases, with an adjustment of $4 per resident day for facilities that serve a percentage higher than the average Medicaid client. Medicaid funding to support the new salary scale for certified practical nurses will increase salary funding up to $8 per hour, depending on the worker’s role and length of service in nursing homes.

Including federal matching funds, Illinois will invest more than $700 million in Medicaid funding for the nursing home sector through a combination of new revenue generated from tax simplification and tax expansion. assessment of existing nursing homes and allocating additional general revenue funds.

The Medicaid program will reimburse nursing homes that opt ​​in for their share of the cost of the pay scale increase. For some facilities, Medicaid will fund nearly the entire cost of the scale. The scale is structured so that CNAs receive a raise for each year of experience in Illinois nursing homes.

For those with at least one year of experience, their pay will increase by at least $1.50 per hour, and Medicaid will pay its share of that $1.50 increase. The pay raise increases by $1 for each year of experience, reaching a raise of $6.50 per hour for those with six or more years of nursing home experience. The legislation also allows for a $1.50 per hour wage increase to accompany qualifying promotions, which is in addition to experience-based wage increases. Medicaid will also fund its share of this increase, up to 10-15% of nursing home CNAs.

Illinois will become the first state to implement this model of reform, as well as the first to encourage better staffing of nursing homes of this magnitude. For the first time in Illinois, there will be a direct link between funding for the nursing home industry and quality metrics, including staff hiring.

Medicaid clients, and particularly black and brown nursing home residents, are more likely to live in understaffed facilities, making equity a driver of changes to health care reform legislation. nursing home rates. COVID-19 has disproportionately affected nursing homes in vulnerable, often black and brown communities, further exacerbating the inequalities that exist in long-term care. But the need for change in the Medicaid nursing home payment system in Illinois began long before the pandemic.

The Illinois Department of Health and Family Services (HFS) spends more than $2.5 billion annually to care for the approximately 45,000 nursing home residents enrolled in the Medicaid program, which accounts for nearly 70% of state nursing home residents. The legislation ties new funding to the accountability and transparency of nursing facilities by adopting the Federal Patient-Based Payment Model (PDPM), which is designed to more accurately reflect the clinical care needs of residents and requires the disclosure of all individual care home ownership interests.

The law will go into effect July 1, 2022 pending federal approval.