SB2736 99TH GENERAL ASSEMBLY

LRB099 19806 MJP 44205 b

99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
SB2736

Introduced 2/16/2016, by Sen. Jacqueline Y. Collins

SYNOPSIS AS INTRODUCED:

New Act
30 ILCS 105/5.875 new

Creates the Nursing Home Accountability Act. Defines terms. Requires certain nursing facilities to report specified information concerning wages of their employees as part of an annual cost report. Requires the Department of Public Health to compare the information to the living wage certification standards. Contains provisions concerning the reporting, determinations, posting, and effect of such certification. Contains penalty, inspection of records, and rulemaking provisions. Requires the Department of Healthcare and Family Services, based on required reports by facilities, to determine if an employee of a facility is a recipient of public assistance for the purpose of imposing an employer responsibility penalty. Contains provisions concerning medical assistance information, prohibited practices, employee remedies, administrative appeals, and confidentiality. Establishes the Employer Responsibility for Public Assistance Fund as a special fund in the State treasury (and makes a conforming change in the State Finance Act). Provides that the Department of Healthcare and Family Services may use money in the Employer Responsibility for Public Assistance Fund for specified purposes. Provides for a direct service minimum that sets a 50% direct service worker expenditure threshold that covered facilities shall meet using their medical assistance program funds. Contains provisions concerning reporting requirements, the calculation and determination of the direct service minimum, and repayment of medical assistance program payments in the event a facility does not meet the direct service minimum. Provides that the provisions of the Act are severable. Effective 90 days after becoming law.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning regulation.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

ARTICLE 1

GENERAL PROVISIONS

Section 1-1. Short title. This Act may be cited as the Nursing Home Accountability Act.

Section 1-5. Legislative findings. The General Assembly finds the following:

(1) Illinois has a large and growing population of seniors and individuals with disabilities who may at some point require nursing facility care.

(2) Nursing facilities are predominately taxpayer-funded through reimbursements from the medical assistance program and Medicare program.

(3) The State of Illinois should have assurances that taxpayer funds are being used by nursing facilities engaged in good care practices and workforce practices rather than for the profit of nursing facilities.

(4) Nursing facilities that receive public money have a responsibility to report to their residents, the families of their residents, and the taxpayers of this State about the minimum hourly wage rates paid to their employees and the number of their employees receiving public assistance, so that the public may make informed decisions about the quality and administration of nursing facilities.

(5) According to 2014 Long-term Care Facilities' Cost Reports data, the average hourly wage for nurse assistants in Illinois is $11.82, the average wage for cooks is $10.76, and the average wage for housekeepers is $10.38. In many facilities, the average wages for these and other job titles is below $10 per hour. Many long-term care facilities do not pay nurse assistants, cooks, or housekeepers a living wage of $15 per hour.

(6) Nursing facilities that pay a living wage of $15 per hour should be recognized with a certification from the State that can be prominently displayed on-site and on their publicly accessible Internet website.

(7) The high rate of staff turnover is a chronic problem in nursing facilities. Turnover of certified nurse aides is particularly high. Studies have addressed the importance of continuity of care and the need to stabilize the work force in nursing facilities to improve quality care. Higher wages may actually help nursing facilities reduce turnover and fill vacancies and can lead to greater worker productivity by improving morale and overall job satisfaction.

(8) Nursing facility employees deserve affordable, comprehensive, employer-provided health insurance coverage. Unfortunately, federal law imposes no penalty on employers who fail to offer affordable, comprehensive health coverage to employees and whose employees receive coverage through the taxpayer-funded medical assistance program.

(9) An employer who fails to provide affordable, comprehensive coverage to low-wage workers covered by medical assistance shifts the cost of health care coverage from the employer to the taxpayer. Controlling health care costs can be more readily achieved if a greater share of working people and their families have employer-provided health benefits so that cost shifting is minimized.

(10) Nursing facility payment rates under Illinois Medicaid are set based on the expectation that most of the payments will be used to provide services to nursing facility residents to maintain and enhance their well-being. Specifically, the nursing component of a facility's rate is set based on the expected cost of registered nurses, nurse aides, and several other staff types providing the hours of care determined necessary for the well-being of facility residents. The support component of a facility's rate is intended to pay for dietary, housekeeping, and other support services for residents.

(11) In State-funded home care programs, the State requires participating home care agencies to show that they have spent 77% of program revenue on direct service worker wages and benefits. This has been an effective policy tool ensuring State funds are used as intended in home care, which, alongside nursing facility care, is the other major long-term care service in Illinois Medicaid.

(12) While the Department of Healthcare and Family Services collects extensive financial reporting data from each nursing facility participating in Illinois Medicaid each year, the Department does not take similar measures to ensure nursing facilities use State funds on the direct service workforce.

(13) The State should act to ensure that taxpayer dollars spent on care in nursing facilities are actually used for the direct services to residents that they are intended to provide.

Section 1-10. Purposes. The purposes of this Act are to:

(1) create a living wage certification program for each nursing facility that provides a base hourly wage of $15 per hour for each directly employed or subcontracted employee of the nursing facility;

(2) encourage the provision of a living wage to each nursing facility employee by providing information to each nursing facility resident and the public on the wage rates being paid to the employees of the nursing facility;

(3) ensure that each nursing facility pays a nursing facility employer responsibility penalty for health coverage received by each employee of the nursing facility through the medical assistance program and other public assistance programs fully or partially funded by the State, with that penalty based on the costs incurred by the State for providing these benefits to the employee of the nursing facility;

(4) ensure that each nursing facility employee who receives public assistance is protected from possible retaliation by the nursing facility for seeking or obtaining that assistance; and

(5) establish a direct service worker minimum percentage for nursing facilities participating in the medical assistance program to encourage the facilities to spend medical assistance program funds providing service to residents, and require repayment of a portion of medical assistance program funds if they do not.

Section 1-15. Definitions. As used in this Act, unless the context clearly requires otherwise:

"Base hourly wage" means the hourly wage of an employee that is exclusive of:

(1) deductions for payroll taxes, benefits, or other employment charges; and

(2) adjustments for overtime compensation.

"Covered employee" means an employee who:

(1) is a recipient of public assistance;

(2) works an average of 20 hours or more per week for the nursing facility; and

(3) works more than 45 days during the calendar year for the nursing facility.

"Covered employee" includes an individual who is a leased employee or otherwise under the direction and control of the nursing facility.

"Direct service worker" means registered nurses, licensed practical nurses, certified nurse assistants, therapists, rehabilitation aides, therapy aides, psychiatric service aides, activity aides, social service workers, dietary aides, housekeepers, and laundry employees. This is the workforce that, primarily through interpersonal contact with residents, helps maintain resident well-being and provides the type of services the medical assistance program pays for through the nursing component rate for nursing facilities, as well as certain services of the type the medical assistance program pays for through the support component rate for nursing facilities, described in Sections 5-5.4 and 5-5.4d of the Illinois Public Aid Code.

"Direct service worker percentage" means a nursing facility's direct service worker wages, benefits, and payroll taxes per patient day divided by its Medicaid revenue per patient day.

"Employee" means an individual who is employed directly or subcontracted by the nursing facility on a full-time, part-time, temporary, or seasonal basis.

"Fund" means the Employer Responsibility for Public Assistance Fund established under Section 10-40 of this Act.

"Living wage certification standard" means the base hourly wage of $15, which shall be adjusted annually by the Department of Healthcare and Family Services in consultation with the Illinois Department of Labor to reflect any increase in the appropriate regional Consumer Price Index.

"Medical assistance program" means the program established in Article V of the Illinois Public Aid Code.

"Nursing facility" means both:

(1) a long-term care facility as defined in the Nursing Home Care Act; and

(2) each member of a controlled group of corporations, as defined in Section 1563(a) of the Internal Revenue Code.

"Public assistance" includes, but is not limited to, assistance under the medical assistance program, cash assistance, or another benefit under a program that is wholly or partially funded by the State. "Public assistance" does not include the assistance provided under the federal Children's Health Insurance Program, Supplemental Nutrition Assistance Program, or Low-Income Home Energy Assistance Program.

ARTICLE 5

NURSING FACILITY

LIVING WAGE CERTIFICATION

Section 5-5. Reporting requirements.

(a) Beginning 90 days after the effective date of this Act, each nursing facility that is certified to participate in the medical assistance program shall provide the following information on an annual basis as part of its cost report under Sections 5-5.7 and 5B-5 of the Illinois Public Aid Code:

(1) the minimum base hourly wage paid for each job classification at the nursing facility, categorized by full-time, part-time, temporary, and seasonal employees, and including the total number of employees for each category;

(2) the number of employees for each job classification at the nursing facility, categorized by full-time, part-time, temporary, and seasonal employees, and including the total number of employees; and

(3) the total number of employees who receive a base hourly wage at, above, and below the living wage certification standard at the nursing facility, categorized by full-time, part-time, temporary, and seasonal employees, and including the total number of employees.

(b) Information provided under subsection (a) shall be based on payroll records and other data in a uniform format that is verifiable and able to be audited.

Section 5-10. Determination and certification.

(a) The Department of Public Health shall determine whether a nursing facility qualifies for a living wage certification by comparing the information provided under Section 5-5 of this Act to the living wage certification standard for the corresponding period.

(b) The Department of Public Health shall issue a certification document to each nursing facility whose employees all meet the living wage certification standard. The document shall detail the nursing facility's certification as an employer that provides wages to its employees that meet the living wage certification standard.

(c) The analysis of information provided and the issuance of a certification document under this Section shall occur annually.

Section 5-15. Posting of information.

(a) The Department of Public Health shall post the following on its publicly accessible Internet website, including the page dedicated to long-term care facility information, or other appropriate websites of the State:

(1) The information provided under Section 5-5 of this Act.

(2) The list of nursing facilities that have received a certification document under Section 5-10 of this Act for the current year.

(b) Each nursing facility shall post the following in a publicly accessible area of the nursing facility:

(1) The information provided under Section 5-5 of this Act.

(2) The certification document under Section 5-10 of this Act that the nursing facility received for the current year, if it received one.

Section 5-20. Effect of certification. Nothing in this Article shall require a nursing facility to provide wages to some or all of its employees in an amount equal to or exceeding the living wage certification standard.

Section 5-25. Inspection of records and data. The Department of Public Health shall inspect payroll records and other data under Section 5-5 of this Act during the annual inspection of the nursing facility to verify that the information provided under Section 5-5 of this Act is complete and accurate.

Section 5-30. Administration by Department of Public Health. The Department of Public Health shall adopt rules necessary to implement this Article.

Section 5-35. Civil penalties.

(a) The Department of Public Health shall impose a civil penalty upon a nursing facility that fails to:

(1) provide complete, accurate, timely, or properly formatted information that is required under Section 5-5 of this Act; or

(2) submit the information under Section 5-5 of this Act for inspection as required by Section 5-25 of this Act.

(b) The Department of Public Health shall determine the appropriate amount of the penalty imposed under subsection (a) of this Section.

ARTICLE 10

NURSING FACILITY

EMPLOYER RESPONSIBILITY PENALTY

Section 10-5. Reporting requirements. Each nursing facility shall annually provide information required by the Department of Healthcare and Family Services to administer and enforce the provisions of this Article, including, but not limited to:

(a) the Social Security number of each employee of the nursing facility;

(b) the number of hours that the employee worked at the nursing facility during the fiscal year; and

(c) the number of days that the employee was employed at the nursing facility during the fiscal year.

Section 10-10. Determinations. The Department of Healthcare and Family Services shall match Social Security numbers of recipients of public assistance with the information provided under Section 10-5 of this Act, to determine if the nursing facility is subject to an employer responsibility penalty under this Article.

Section 10-15. Employer responsibility penalty.

(a) A nursing facility shall be subject to an employer responsibility penalty if it employs an employee who is a recipient of public assistance.

(b) The amount of the penalty shall be determined as follows:

(1) The amount of the employer responsibility penalty shall be based on the actual cost of providing public assistance to each covered employee for the most recent fiscal year.

(2) The employer responsibility penalty for each covered employee shall be determined by multiplying the actual cost of providing public assistance to the covered employee by a fraction, the numerator of which is the amount of annualized hours worked by the covered employee per year and the denominator of which is 1,820 hours per year.

(3) An employer responsibility penalty may not exceed 100% of the actual cost of providing public assistance to the covered employee.

(c) The Department of Healthcare and Family Services shall annually send a notice of the following to each nursing facility that is subject to an employer responsibility penalty under this Article:

(1) The amount of the employer responsibility penalty imposed.

(2) The date on which payment is due.

(d) A nursing facility shall pay any employer responsibility penalty imposed under this Article to the Department of Healthcare and Family Services for deposit into the fund established under Section 10-40 of this Act.

(e) Interest shall be determined as follows:

(1) Interest shall be assessed at 10% per annum on an employer responsibility penalty that is not paid on or before the due date of the payment.

(2) Interest under this subsection (e) shall begin to accrue the day after the due date of the employer responsibility penalty.

(3) Interest under this subsection (e) shall be deposited into the fund established under Section 10-40 of this Act.

(f) If an employer responsibility penalty is not paid within 60 days after the due date of the payment, an interest penalty equal to the interest charged under subsection (e) shall be assessed and due for each month, or part thereof, that the employer responsibility penalty payment is not received.

The additional interest penalty under this subsection (f) shall be deposited in the fund under Section 10-40 of this Act.

(g) If a nursing facility is a medical assistance provider or is related through common ownership or control, as defined in 42 CFR 413.17(b) (relating to cost to related organizations), to a medical assistance provider and the nursing facility fails to pay all or part of an employer responsibility penalty within 60 days after the due date of the payment, the Department of Healthcare and Family Services may deduct the unpaid penalty and any interest owed on the penalty from any medical assistance program payment due to the nursing facility until the full amount due under this Section is recovered.

A deduction under this subsection (g) may be made:

(1) only after written notice to the nursing facility under paragraph (1); and

(2) in amounts over a period of time, taking into account the financial condition of the nursing facility.

(h) Within 60 days after the end of each calendar quarter, the Department of Healthcare and Family Services shall notify the Department of Public Health of each nursing facility with penalty or interest amounts that have remained unpaid for 90 days or more.

The Department of Public Health may not renew the license of a nursing facility unless:

(1) the Department of Healthcare and Family Services notifies the Department of Public Health that the nursing facility has paid any outstanding amount due under this Section in its entirety; or

(2) the Department of Healthcare and Family Services agrees to permit the nursing facility to repay the outstanding amount due under this Section in installments and that, to date, the nursing facility has paid the installments in the amount and by the date required by the Department of Healthcare and Family Services.

(i) After a nursing facility changes ownership or control, the successor shall be liable for the outstanding amount due under this Section from the nursing facility before the change of ownership or control.

Section 10-20. Information regarding medical assistance.

(a) Each nursing facility shall provide information to each newly hired and existing employee regarding the availability of medical assistance coverage for a low-income employee.

(b) The Department of Healthcare and Family Services shall develop a simple, uniform written notice containing the information required under this Section.

Section 10-25. Prohibited practices. A nursing facility may not:

(1) designate an employee as an independent contractor, reduce an employee's hours of work, or terminate an employee if the purpose of the action is to avoid the obligations under this Article;

(2) request or otherwise seek to obtain information on the income, family income, or other eligibility requirements for public assistance regarding an employee, other than the information about the employee's employment status otherwise known to the nursing facility and consistent with federal and State law;

(3) require as a condition of employment that an employee not enroll or withdraw from enrollment in public assistance;

(4) encourage or discourage an employee to enroll in public assistance for which the employee is eligible, but the nursing facility may provide information on public assistance as otherwise provided by federal or State law; or

(5) discharge or in any manner discriminate or retaliate against an employee who enrolls in public assistance.

Section 10-30. Employee remedies. An employee of a nursing facility who is discharged, threatened with discharge, demoted, suspended, or in any other manner discriminated or retaliated against in the terms and conditions of employment by the nursing facility because the employee has enrolled in public assistance shall be entitled to reinstatement and reimbursement for lost wages and work benefits caused by the acts of the nursing facility.

Section 10-35. Administrative appeal. A nursing facility that is aggrieved by a determination of the Department of Healthcare and Family Services under this Article may file a request for review of whether the Department of Healthcare and Family Services correctly determined the number of covered employees that are the subject of the penalty through the Department's administrative procedures for appeals.

Section 10-40. Employer Responsibility for Public Assistance Fund.

(a) There is created in the State treasury the Employer Responsibility for Public Assistance Fund.

(b) The Employer Responsibility for Public Assistance Fund shall receive money from the employer responsibility penalty, interest, and other penalties under Section 10-15.

(c) The Department of Healthcare and Family Services may use money in the Fund to pay:

(1) the State's share of public assistance costs for covered employees; and

(2) the costs to implement and administer this Article.

Section 10-45. Confidentiality. Each document and record that contains personal or identifying information and results from the operation of Sections 10-5 and 10-10 of this Act shall be subject to the confidentiality requirements and privacy standards under the Health Insurance Portability and Accountability Act of 1996.

Section 10-50. Administration by the Department of Healthcare and Family Services. The Department of Healthcare and Family Services shall adopt rules necessary to implement this Article.

ARTICLE 15

DIRECT SERVICE MINIMUM

Section 15-5. Reporting requirements.

(a) Beginning 90 days after the effective date of this Section, each nursing facility that is certified to participate in the medical assistance program shall provide as part of its financial reporting under Sections 5-5.7 and 5B-5 of the Illinois Public Aid Code information necessary for the Department of Healthcare and Family Services to administer and enforce the provisions of this Article.

(b) Information provided shall be subject to the audit provisions under Section 5-5.7 of the Illinois Public Aid Code and comply with any uniform standards and charting of accounts developed under Sections 5-5.7 and 5B-5 of the Illinois Public Aid Code.

Section 15-10. Calculation and determination.

(a) The Department of Healthcare and Family Services shall examine information on medical assistance program revenue and the split between spending on direct service worker costs versus other items (including, but not limited to, administrative expenses, capital expenses, and owner profits), provided under Section 15-5 of this Act, to determine if the nursing facility's direct service worker percentage is at or above 50% or not.

(b) A nursing facility's direct service worker spending per patient day will be calculated by dividing the sum of direct service worker wages, benefits, and payroll taxes by total patient days.

(c) A nursing facility's Medicaid revenue per patient day shall be calculated by dividing total Medicaid revenue by Medicaid patient days.

Section 15-15. Repayment of medical assistance program payments.

(a) If a nursing facility's direct service worker percentage is determined to be below 50% under Section 15-10 of this Act, the nursing facility shall repay a portion of its medical assistance program payments based on how far its direct service worker percentage is below this minimum percentage. The amount of repayment shall be determined by multiplying total medical assistance program payments times the difference of 50% and the facility's direct service worker percentage.

(b) The Department of Healthcare and Family Services shall send notice to a nursing facility subject to repayment stating:

(1) the amount that must be repaid; and

(2) the date on which payment is due.

(c) If a nursing facility fails to pay all or part of a repayment within 60 days after the due date of the repayment, the Department of Healthcare and Family Services may deduct the unpaid amount from any medical assistance program payment due to the nursing facility until the full amount due under this Section is recovered.

A deduction this subsection may be made:

(1) only after written notice to the nursing facility; and

(2) in amounts over a period of time, taking into account the financial condition of the nursing facility.

(d) Within 60 days after the end of each calendar quarter, the Department of Healthcare and Family Services shall notify the Department of Public Health of each nursing facility with repayment amounts that have remained unpaid for 90 days or more.

The Department of Public Health may not renew the license of a nursing facility unless:

(1) the Department of Healthcare and Family Services notifies the Department of Public Health that the nursing facility has paid any outstanding amount due under this Section in its entirety; or

(2) the Department of Healthcare and Family Services agrees to permit the nursing facility to repay the outstanding amount due under this Section in installments and that, to date, the nursing facility has paid the installments in the amount and by the date required by the Department of Healthcare and Family Services.

(e) After a nursing facility changes ownership or control, the successor shall be liable for the outstanding amount due under this Section from the nursing facility before the change of ownership or control.

(f) Other Department of Healthcare and Family Services repayment procedures shall be broadly consistent with Part 140 of Title 89 of the Illinois Administrative Code regarding nursing facility payment and Department practices.

Section 15-20. Administration by the Department of Healthcare and Family Services. The Department of Healthcare and Family Services shall adopt rules necessary to implement this Article.

ARTICLE 90

AMENDATORY PROVISIONS

Section 90. The State Finance Act is amended by adding Section 5.875 as follows:

(30 ILCS 105/5.875 new)

Sec. 5.875. The Employer Responsibility for Public Assistance Fund.

ARTICLE 99

SEVERABILITY; EFFECTIVE DATE

Section 99-97. Severability. The provisions of this Act are severable. If any provision of this Act or its application to any person or circumstance is held invalid, the invalidity shall not affect other provisions or applications of this Act that can be given effect without the invalid provision or application.

Section 99-99. Effective date. This Act takes effect in 90 days after becoming law.