Bill Text: IL SB3116 | 2021-2022 | 102nd General Assembly | Introduced

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Bill Title: Amends the Medical Assistance Article of the Illinois Public Aid Code. Declares that all changes to the existing nursing facility direct care reimbursement rate methodologies and to the bed assessment and collection procedures must be approached with caution, executed deliberately, and held to the highest of standards in order to protect nursing facility residents from disruption in care, protect workers from lost wages and jobs, and protect providers from the increased instability within the industry. Provides that a Nursing Facility Oversight Committee (Committee) shall be named by the 4 legislative leaders to oversee, assess, and provide direction to the Department of Healthcare and Family Services as it relates to long term care services. Contains provisions on the Committee's composition, meetings, proxy voting, and other matters. Requires the Department to seek the advice and consent of the Committee prior to filing emergency or permanent administrative rules with the Secretary of State or submitting Medicaid State Plan amendments and all correspondence to the Centers for Medicare and Medicaid Services. Requires the Department to prepare transition plans for the redesign of the direct care reimbursement rate methodologies and the assessment tax schedule and collection proceedings. Contains provisions concerning advanced notice to nursing facilities of all payment, award, and rate changes; a quarterly direct care per diem reimbursement rate for each nursing facility; direct care reimbursement rate components subject to redesign; establishment of a single quarterly non-Medicare occupied bed varied tax assessment; State Plan amendments to permit expedited implementation of the redesigned bed assessment; compliance requirements for managed care organizations; penalties for non-compliance; and other matters. Effective immediately.

Spectrum: Slight Partisan Bill (Democrat 17-7)

Status: (Introduced - Dead) 2022-04-04 - Sponsor Removed Sen. Doris Turner [SB3116 Detail]

Download: Illinois-2021-SB3116-Introduced.html

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102ND GENERAL ASSEMBLY State of Illinois 2021 and 2022 SB3116 Introduced 1/11/2022, by Sen. Linda Holmes, Michael E. Hastings and David Koehler SYNOPSIS AS INTRODUCED:
305 ILCS 5/5-5.2a new
Amends the Medical Assistance Article of the Illinois Public Aid Code. Declares that all changes to the existing nursing facility direct care reimbursement rate methodologies and to the bed assessment and collection procedures must be approached with caution, executed deliberately, and held to the highest of standards in order to protect nursing facility residents from disruption in care, protect workers from lost wages and jobs, and protect providers from the increased instability within the industry. Provides that a Nursing Facility Oversight Committee (Committee) shall be named by the 4 legislative leaders to oversee, assess, and provide direction to the Department of Healthcare and Family Services as it relates to long term care services. Contains provisions on the Committee's composition, meetings, proxy voting, and other matters. Requires the Department to seek the advice and consent of the Committee prior to filing emergency or permanent administrative rules with the Secretary of State or submitting Medicaid State Plan amendments and all correspondence to the Centers for Medicare and Medicaid Services. Requires the Department to prepare transition plans for the redesign of the direct care reimbursement rate methodologies and the assessment tax schedule and collection proceedings. Contains provisions concerning advanced notice to nursing facilities of all payment, award, and rate changes; a quarterly direct care per diem reimbursement rate for each nursing facility; direct care reimbursement rate components subject to redesign; establishment of a single quarterly non-Medicare occupied bed varied tax assessment; State Plan amendments to permit expedited implementation of the redesigned bed assessment; compliance requirements for managed care organizations; penalties for non-compliance; and other matters. Effective immediately.
LRB102 23754 KTG 32945 b
A BILL FOR
SB3116 LRB102 23754 KTG 32945 b
AN ACT concerning public aid.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Public Aid Code is amended by
adding Section 5-5.2a as follows:
(305 ILCS 5/5-5.2a new)
Sec. 5-5.2a. Nursing facility direct care reimbursement
rates and bed tax methodologies.
(a) This Section may be referred to as the Nursing
Facilities Direct Care Reimbursement Rate and Bed Tax Redesign
of 2022 Act.
The General Assembly declares that the following are in
the best interest of the State:
(1) All changes to the existing nursing facility
direct care reimbursement rate methodologies and to the
bed assessment and collection procedures must be
approached with caution, executed deliberately, and held
to the highest of standards to protect nursing facility
residents from disruption in care, protect workers from
lost wages and jobs, and protect providers from the
increased instability within the industry.
(2) All direct care reimbursements shall be paid on a
per diem basis, except lump sum awards for staff years of

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service and specialized training. Nothing shall preclude
the State from providing additional funding to nursing
facilities for direct care in a form other than a per diem
rate in an emergency.
(3) The Department of Healthcare and Family Services
shall represent the interests of the State and the managed
care organizations in the redesign of the nursing facility
direct care reimbursement rates and bed tax methodologies;
as such, the managed care organizations shall be bound by
the negotiated agreements of the Department.
(4) Managed care organizations under contract with the
State must pay to each individual nursing facility no less
than the Medicaid fee-for-service reimbursement rate
established by the Department in accordance with this
Section, and all subsequent modifications to the Medicaid
reimbursement system, and in effect at the time the
service is provided.
(5) Managed care organizations are expressly
prohibited, at any time and for any reason, from offering,
negotiating, or entering into contracts with a nursing
facility for a level of compensation less than the
Medicaid fee-for-service rate in effect at the time the
service is rendered.
(b) Nursing Facility Oversight Committee.
(1) A Nursing Facility Oversight Committee shall be
named by the 4 legislative leaders to oversee, assess, and

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provide direction to the Department as it relates to long
term care services, including, but not limited to,
Medicaid reimbursement, bed assessments, managed long term
care, and Medicaid and long term care eligibility. The
Committee shall be expressly charged with overseeing,
assessing, and providing leadership to the Department on
the execution of this Section and with the ongoing
evaluation of the effectiveness of any and all provisions.
(2) The Committee shall be comprised of 12 voting
members with each legislative leader appointing 2
legislative members and a member of the general public
recommended by membership-based nursing home trade
associations. Each legislative leader shall identify one
legislative member to serve as a co-chair. Members shall
serve until a replacement is named. Citizen members shall
serve without compensation.
(3) The co-chairs shall call the first meeting within
30 days after the effective date of this amendatory Act of
the 102nd General Assembly, but no later than 10 business
days prior to the Department's initial submission of State
Plan amendments in accordance with this Section.
(4) The Department shall provide copies of all
documents at least 10 days in advance of a meeting at which
the Department is asking the Committee to give comment or
approval.
(5) The Committee shall meet at least monthly during

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the implementation of redesigns, quarterly thereafter, and
more frequently at the call of the co-chairs.
(6) Voting members unable to attend a meeting may
submit comments in writing prior to the meeting. Voting
members may attend and vote in person, by phone or by
teleconference, or may name a proxy to attend and vote in
their place. Proxies shall be named in writing, which may
be submitted by the appointee or by the legislative leader
who appointed them, and delivered to each of the
co-chairs.
(7) The Committee shall hold at least 2 open forums,
one in Chicago and one in Springfield, to accept comments
on implementation of this Section, to host the Department
to respond to questions concerning its implementation
plans, and to encourage members of the public, family
members of nursing home residents, and licensed operators
to share their issues and concerns.
(8) Prior to filing emergency or permanent
administrative rules with the Secretary of State or
submitting Medicaid State Plan amendments and all
substantive correspondence with the Centers for Medicare
and Medicaid Services, the Department shall seek the
advice and consent of the Committee. The Department shall
provide the Committee members with no fewer than 10
business days to review materials and seek additional
information prior to requesting the members' advice and

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consent. The Department shall designate a person to answer
questions and accept comments in advance of the meeting,
at which time a vote shall occur.
(c) Direct care rate methodologies and assessment
schedules and collection procedures.
(1) As used in this Section:
"Direct care" means the direct care component of the
Medicaid reimbursement rate paid to nursing facilities.
"Direct care reimbursement" means compensation for
direct care paid by the Department or a managed care
company to a Medicaid certified nursing facility.
"Nursing facility" means a nursing home that is
licensed under the Nursing Home Care Act.
"Per diem add-ons" means additional direct care
compensation paid to a nursing facility meeting the
standards or benchmarks as specified in this Section as
part of its daily Medicaid rate.
"PDPM" means the Patient Driven Payment Model
developed by the federal Centers for Medicare and Medicaid
Services.
"RUG" means the Resource Utilization Group system for
grouping a nursing facility's residents according to their
clinical and functional status identified in Minimum Data
Set data supplied by a facility.
(2) The Department shall prepare a transition plan for
the redesign of the direct care reimbursement rate

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methodologies and a transition plan for the redesign of
assessment tax schedule and collection procedures, which
shall include projected implementation dates. The plan
shall be submitted to the Nursing Facility Oversight
Committee for its review, comment, and approval; posted on
the Department's website; and provided to the public by
the Department upon request.
(3) Individual nursing facilities shall be notified by
the Department of any and all changes prior to their
taking effect that impact payments, awards, or rates paid
to or paid by individual nursing facilities, including,
but not be limited to, direct care reimbursement rates
methodologies, taxes and assessments, rate add-ons and
adjustments, levels of staffing compliance, directed
payments, incentive payments, lump sum awards, case mix
indices, census, and bed days.
(4) No less than 60 days' notice shall be given by the
Department to nursing facilities before any modifications
to any portion of the reimbursement methodologies and bed
assessment tax schedule and collection procedures become
effective.
(5) No less than 30 days' notice shall be given by the
Department to nursing facilities before any rebasing, rate
adjustments, bed tax adjustment, or Medicaid bed days
become effective.
(6) Notices shall include sufficient information to

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permit the nursing facilities to challenge the accuracy of
the data, the validity of the formulas used, or the
specific calculations. The notice shall include
instructions on how to file an appeal.
(d) Direct care reimbursement rate redesign.
(1) Direct care reimbursement methodologies in place
on the effective date of this amendatory Act of the 102nd
General Assembly and identified for phase-out or
modification shall remain in place in whole or in part
until the replacement methodologies are fully operational
to ensure continuity and to provide a safety net necessary
to achieve the General Assembly's declaration.
(2) The Department shall establish a direct care per
diem reimbursement rate on a quarterly basis for each
nursing facility. The direct care per diem reimbursement
rate shall be inclusive of all compensation paid by the
State for the direct care whether determined by formula,
add-ons or adjustments, awards, or any other type of
compensation. Only funding for years of service and
specialized training shall be paid to nursing facilities
in a lump sum. Nothing precludes the State from providing
additional funding to nursing facilities for direct care
in a form other than a per diem rate in an emergency.
(3) Authorization for the direct care reimbursement
rate redesign provided in this Section shall be dependent
on securing an additional $60,000,000 in General Revenue

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funding for State Fiscal Year 2023. Failure of the General
Assembly to appropriate the additional funds shall result
in the repeal of the authorization, require modification
of the redesign, and necessitate reauthorization by the
General Assembly. The Department shall work with the
Nursing Facility Oversight Committee and membership-based
nursing home trade associations to develop a redesign
consistent with the available funding.
(4) Direct care reimbursement rate components subject
to the redesign shall include all of the following:
(A) A case mix protocol.
(B) A regional wage adjuster per diem add-on.
(C) A direct care base per diem rate.
(D) A staffing per diem add-on.
(E) A special care needs per diem add-on.
(F) A Medicaid access per diem add-on.
(G) A quality incentive performance measure per
diem add-on.
(H) Quality incentive lump sum awards.
(e) Case mix protocol. The current RUGs-based case mix
protocol shall remain operational until replaced by a fully
operational PDPM-based case mix protocol, which shall be
resident-centered, facility-specific, and cost-based. Costs
shall be annually rebased and the case mix index quarterly
updated.
(1) PDPM nursing case mix indices shall be applied to

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all resident classes at no less than 79% of the Centers for
Medicare and Medicaid Services' PDPM unadjusted case mix
values utilizing an index maximization approach. No
resident class shall be held at the level applicable to
the RUG-IV model in effect prior to January 1, 2022.
(2) The per diem rate shall be based on
Medicaid-qualified residents on record as of 30 days prior
to the beginning of the rate period in the Department's
Medicaid Management Information System, or its successor,
as present in the nursing facility on the last day of the
second quarter preceding the rate period based upon the
Assessment Reference Date of the Minimum Data Set (MDS).
Case mix indices and PDPM unadjusted case mix values used
shall be for the same period of time.
(3) A 24-month hold harmless period shall begin with
the first month the PDPM is fully operational. During the
hold harmless period, the Department shall pay each
nursing facility based on its PDPM-based score or its
RUGS-based score, whichever is greater.
(f) Regional wage adjustor. The regional wage adjustors,
as provided in paragraph (3) of subsection (d) of Section
5-5.2, in effect January 1, 2022 shall remain in effect.
(g) Direct care base per diem rate. $5 shall be added to
the base per diem rate produced by the cost-based formula
contained in paragraph (5) of subsection (d) of Section 5-5.2
in effect on January 1, 2022.

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(h) Variable staff per diem add-on.
(1) The direct care staffing add-on shall be replaced
by the variable staffing per diem add-on, which shall be
based on compliance with the Centers for Medicare and
Medicaid Services' RUGs-based staff time measurement
STRIVE study and rebased quarterly using the Payroll Based
Journal report for the same period of time adjusted for
psychiatric services rehabilitation directors,
psychiatric services rehab coordinators, and psychiatric
services rehab aides employed by facilities described in
77 Ill. Adm. Code 300.Subpart S and for acuity. Until the
Centers for Medicare and Medicaid Services releases a PDPM
staff time measurement study and its use for determining
staffing compliance is approved by the General Assembly,
the Department shall maintain the RUGs-based case mix
system for the purpose of determining compliance with the
STRIVE-based staffing requirements.
(2) No nursing facility's variable staffing per diem
add-on shall be reduced by more than 5% in 2 consecutive
quarters.
(3) Variable staffing per diem add-ons shall be
adjusted for each whole percentage point:
(A) $6 for under 70% compliance.
(B) $9 for 70% compliance and adjusted
incrementally for each whole percentage point up to
and including 79% compliance.

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(C) $14.88 for 80% compliance and adjusted
incrementally for each whole percentage point up to
and including 91% compliance.
(D) $23.80 for 92% compliance and adjusted
incrementally for each whole percentage point up to
and including 99% compliance.
(E) $29.75 for 100% compliance and adjusted
incrementally for each whole percentage point up to
and including 109% compliance.
(F) $35.70 for 110% compliance and adjusted
incrementally for each whole percentage point up to
and including 124% compliance.
(G) $38.68 for 125% and above compliance.
(i) Special care needs per diem add-on. A special care
needs per diem add-on shall be applicable for the following
residents:
(1) Alzheimer and other dementia diseases add-on of
$0.89 for residents scoring in I4200 or I4800 on the MDS.
(2) Mental health add-on of $2.67 for residents who
scores either a "1" or "2" in any items S1200A through
S1200I and also scores in a RUGs group PA1, PA2, BA1, or
BA2.
(j) Medicaid access per diem add-on. Nursing facilities
with annual Medicaid bed days between 5,001 to 55,000, which
comprise at least 70% of all annual occupied bed days for the
same period of time, shall receive a $6 Medicaid access per

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diem add-on, which shall be rebased quarterly.
(k) Quality incentive per diem add-ons.
(1) Performance measure per diem add-on. Nursing
facilities shall receive a performance measure per diem
add-on, which shall be adjusted quarterly based on the
Centers for Medicare and Medicaid Services actual quality
star ratings for long term stays contained in the
Five-Star Quality Ratings System for the quarter in which
the per diem is calculated based on the add-on schedule
below:
Five-Star Long Stay Performance Measure
Quality Rating Per Diem Add-on
5 Stars $9.66
4 Stars $6.90
3 Stars $4.14
2 Stars $2.07
1 Star $0
In the first year, the Department shall at the end of
the third quarter proportionately adjust the add-on
schedule for fourth quarter awards to ensure that no less
than $70,000,000 and no more than $70,000,000 is awarded
in the aggregate for the entire year. The Department shall
recalibrate the table above to reflect the actual dollar
values for an entire 12-month period and request the
assistance of the Nursing Facility Oversight Committee to
correct the table in statute.

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In the second and subsequent years, the Department
shall apply the per diem add-on schedule in statute, and
no change to the table shall be requested or made that
would limit the growth of the performance measure per diem
add-on in the aggregate.
(2) Years of services and specialized training lump
sum awards.
(A) Years of service lump sum award. Nursing
facilities shall receive quarterly lump sum awards
based on staff years of service data contained in the
Payroll Based Journal. The incentive calculation shall
be based on hours of service and shall range from $1.50
per hour of service for workers with the equivalent of
more than one year and less than 2 years of service to
$6.50 per hour of service for workers with the
equivalent of 6 or more years of service.
(B) Specialized training lump sum award. The
Department shall assist nursing facilities in
providing specialized training for qualified staff.
Cost sharing awards shall be based on annual reports
filed with the Department detailing specific costs and
employees participating in the training program and
the facility's percentage of Medicaid bed days. In the
first year the State's share shall be no greater than
50% of the cost of the training attributed to Medicaid
bed days with the State's share growing to 80% over 5

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years.
(l) Bed assessment redesign. The existing non-Medicare
occupied bed flat tax assessment and the licensed bed fee
shall remain operational until a replacement is approved by
the Centers for Medicare and Medicaid Services and is fully
operational. Both levies shall be replaced by a single
quarterly non-Medicare occupied bed varied tax assessment. The
tax schedule shall be based on Medicaid bed days and levied
against all non-Medicare occupied beds. One-fourth of the
annual Medicaid bed days in the table below shall be
attributed to each quarter for the purposes of determining an
individual facility's tax for a specific quarter. The tax
schedule as it appears below shall remain in effect until it is
modified by the General Assembly.
Annual Medicaid Bed Days Tax
No certified Medicaid beds $7
1-5,000 $10.67
5,001-15,000 $19.20
15,001-35,000 $22.40
35,001-55,000 $19.20
55,001-65,000 $13.86
greater than 65,000 $10.67
(1) To expedite collection and distribution of the
enhanced revenue generated by the bed assessment redesign,
the Department shall submit to the Centers for Medicare
and Medicaid Services a State Plan amendment providing for

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an immediate start date for the collection of the enhanced
assessment and distribution using the existing direct care
reimbursement methodology with a gradual phase-in of the
reimbursement rate redesign.
(2) In the first year, it is assumed the new
assessment, which shall be calculated and paid on a
quarterly basis, will generate an amount approximately
equal to 6% of revenues annually. All funds generated by
the bed assessment redesign shall be used exclusively to
increase the funding for nursing facilities in Illinois.
(3) Medicaid bed day calculation shall be based on
Medicaid-qualified residents on record as of 30 days prior
to the beginning of the assessment quarter in the
Department's Medicaid Management Information System, or
its successor.
(4) Prior to the collection of the enhanced bed
assessment, the Department shall attest that all managed
care companies are paying no less than the fee-for-service
rate in effect when a service is rendered.
(m) Centers for Medicare and Medicaid Services approval.
The Department shall submit initial State Plan amendments to
the Centers for Medicare and Medicaid Services no later than
60 days after the effective date of this amendatory Act of the
102nd General Assembly. All amendments and substantive
correspondence shall be posted on the Department's website
with copies sent to the 4 legislative leaders and members of

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the Nursing Facility Oversight Committee. The State Plan
amendment shall permit an expedited implementation of the
enhanced bed assessment provisions distributed initially
through the existing reimbursement system with distribution
shifting to the redesigned direct care methodologies when the
redesigned methodologies are fully operational. Failure of the
Centers for Medicare and Medicaid Services to approve any
portion of the reimbursement rate redesigns shall constitute a
withdrawal of the General Assembly authorization and
necessitate reauthorization prior to moving forward with
implementation.
(n) Managed care organization compliance.
(1) The Department shall be responsible for and
actively oversee managed care organization compliance and
must attest to managed care organization compliance with
all provisions of this Section prior to implementing the
enhanced bed assessment. The Department shall perform
quarterly audits of each managed care organization's
business practices to ensure they align with the
provisions of this Section. The Department shall
immediately modify all contractual arrangements with each
of the managed care organizations in conflict with the
provisions of this Section. Failure of a managed care
organization to agree to all necessary amendments to its
contract with the State shall constitute the company's
notice of withdrawal from the medical assistance program.

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(2) A sanction of $20,000 per incident shall be levied
against a managed care organization for failure to comply,
which shall double for each subsequent incident of the
same or similar violation. All fines shall be deposited
into the Long-Term Care Provider Fund. Use of the funds
shall be limited to expenditures that qualify for federal
matching funds, promote quality of resident care, and have
the approval of the Nursing Facility Oversight Committee.
Legislative approval, where needed, shall be requested
with approval of the Nursing Facility Oversight Committee.
(3) A managed care organization's participation in the
medical assistance program shall be terminated for failure
to make all necessary changes to business practices in
conflict with this Section.
Section 99. Effective date. This Act takes effect upon
becoming law.