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Obamacare leaves nursing homes waiting for millions of dollars

The massive expansion of Medicaid under Obamacare had an unintended consequence in Illinois, leaving nursing homes in the lurch as the state sits on a mountain of unpaid bills.

The state doesn't know how much it owes nursing homes and other long-term care facilities, some of which have gone a year or more without getting paid. But the figure is likely in the hundreds of millions of dollars.About $129 million that's owed has been approved and is waiting to be paid by the Illinois Comptroller's Office. Another estimated $185 million in bills is being processed at the Illinois Department of Healthcare and Family Services, which oversees Medicaid.

But the total amount likely is much higher due to a backlog of pending applications still making their way through the system. There are about 1,100 long-term care providers in Illinois.

People who qualify for Medicaid and need long-term care must undergo a more stringent review than typical enrollees. But the state doesn't have enough caseworkers—or the money to hire more—to get the job done in a timely manner, particularly as it also is dealing with a crush of 359,000 people who joined the Medicaid rolls due to Obamacare.

That's left nursing homes on the hook as they let residents with pending applications live in their facilities essentially at no charge and hope that the backlog eases.

“There's no question it's going to be a challenge,” says Pat Comstock, executive director of the Health Care Council of Illinois, a nursing home lobbying group.

BACKUP OF CASES

Long-term care recipients represent only about 50,000 of the 2.9 million Medicaid enrollees in Illinois. But estimates of the number of pending long-term care Medicaid applications range from 10,000 to 18,000. The Illinois Department of Human Services, which determines who is eligible for services, only recently created a database to track the pending applications.

State Sen. Donne Trotter, D-Chicago, is a chief sponsor of a new law designed in part to help ease the backlog. He says it's been a headache for years that escalated amid budget cuts and inadequate staffing. The problem wasn't a priority as the state focused on expanding Medicaid and rooting out waste and fraud in the program, he says. The new law calls for simplifying the eligibility process and issuing up to $50 million in loans to nursing homes with big outstanding bills due to pending applications.

The DuPage Convalescent Center, a skilled nursing facility in west suburban Wheaton with about 330 residents, averages about 50 people a month with pending Medicaid applications for long-term care, Director Jennifer Ulmer says. That's worth about $260,000 in monthly revenue. It takes an average of about 11 months for residents' applications to get approved and payments to the facility to begin.

Though it doesn't happen often, “we've had times when patients were admitted to the facility but passed away before their application was approved by the state,” DuPage County board member Robert Larsen says.

Susan Simonsen owns Lydia Healthcare in south suburban Robbins, which has about 400 residents. She stopped taking people with pending long-term care applications about four years ago. She says she was tired of waiting to get paid and estimates that she lost about $1 million over several years.

“They were living here for years for free,” Ms. Simonsen says of residents whose applications were caught up in the backlog.

The application process is twofold. A person has to qualify for Medicaid, then for long-term care services. The typical Medicaid application can take 30 minutes to process. But for long-term care, the state looks at a person's assets going back five years to make sure he or she didn't illegally give away money to qualify—a big part of the bottleneck. And if a denied application is appealed, the process can drag on even longer.

'EVERYTHING ELSE FALLS APART'

Jennifer Wagner, an associate director in the state human services department, blames the backlog largely on historic understaffing and budget cuts. The same caseworkers tasked with determining eligibility for Medicaid and long-term care also decide the fate of who gets food stamps or welfare services.

“What we try to be careful of is—if you focus exclusively on one thing, everything else falls apart,” Ms. Wagner says.

She oversees nearly 2,600 caseworkers with an average caseload of 652. She wanted to hire about 425 more caseworkers to chip away at the pending long-term care Medicaid applications, but she didn't get the funding.

Instead, Ms. Wagner has deployed the 300 caseworkers who are trained in long-term care to focus on the backlog.

As they plow through, “that's how we'll determine the scope of the problem,” says Michael Casey, finance administrator at the Illinois Department of Healthcare and Family Services.

"Obamacare leaves nursing homes waiting for millions of dollars" originally appeared in Crain's Chicago Business.
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