FOR IMMEDIATE RELEASE
February 28, 2002

The Governor's proposed budget includes an 8.8% cut to Medicaid funding to Illinois nursing homes, totaling $171 million, along with a complete elimination of bedhold payments in Medicaid. Bedhold payments are monies paid to nursing facilities to hold a bed for a resident while this person is at the hospital.

If the proposed Medicaid cuts go through, the state will needlessly lose federal funds in the process. A $171 million cut will lead to $85.5 million in federal matching funds being lost. Illinois will end up losing 50 cents of federal funds for every dollar decreased for nursing home payments.

These proposed cuts come at a time when Illinois already lags behind the national standard for Medicaid funding for nursing homes. Currently, the average Medicaid rate paid to Illinois nursing homes ranks 46^th in the nation. Average costs at Illinois nursing homes have increased 51 percent over the last eight years, while the Medicaid rates paid to these facilities have increased only 29 percent.

"As 79 percent of a nursing home’s budget goes to payroll, cuts in Medicaid reimbursement will make it virtually impossible for nursing facilities to attract and retain quality staff members in today’s highly competitive labor market," said Terrence Sullivan, executive director of the Illinois Council on Long Term Care. "Thousands of nursing home staff members at Illinois nursing homes will end up losing their jobs as a result of these cuts to Medicaid, and resident care will suffer as a result."

"The State of Illinois has the moral obligation to maintain the safety net of long term care facilities for some of the state’s most frail and vulnerable citizens," adds Sullivan. "Our society has the responsibility of properly caring for those who cared for us. The proposed 8.8% cut to Medicaid funding poses a terrible threat to the health, independence, and well-being of the more than 50,000 Illinois nursing home residents dependent on Medicaid. Increasing the provider license assessment is the most practical solution to maintaining the safety net of long term care for our state's elderly citizens."

An additional burden looms with the return of a Medicaid reimbursement methodology that has not been used since 1994, called the DPA 2700 Inspection of Care (IOC) system. The state is bringing back this reimbursement system for the sole purpose of cutting Medicaid rates, resulting in countless hours of staff time for completing unnecessary paperwork, in addition to the lost federal dollars.

"The combined effect of all of these measures will be absolutely devastating for nursing home residents and the Illinois nursing home profession," states Sullivan. "With two-thirds of our state’s nursing home population dependent on Medicaid, it is crucial that the State provides adequate funding to meet their health care needs."

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