Kacich: Letter to governor hints at nursing home peril
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In a letter to Gov. Bruce Rauner, Champaign County Board Chair Pattsi Petrie warns that unless the county nursing home gets some cooperation from the state with its negative cash flow, “the decision of last choice may have to be to close the home sometime in 2017.”
Her letter, dated Friday, is the first time in recent years that any county official has suggested the facility might have to be closed.
Petrie wrote of the “dire financial condition” of the county-owned home that is owed $1.5 million by the state in late Medicaid payments.
Further, she said, “the timely processing of Medicaid applications is nonexistent, meaning that the number of open applications right now is costing the home $180,000 a month.”
She wrote that the nursing home is a “safety net” facility for many in Champaign and surrounding counties, that 70 percent of its residents are on Medicaid and that Medicaid reimbursements are inadequate.
“The county citizens already subsidize the home at 3 percent per $100 property tax assessment,” she wrote. “This is not sufficient to carry the home through the tremendous cash flow deficiencies from the state.”
She also suggested a number of ways the state could ease the nursing home’s burden, including assigning more caseworkers to review Medicaid applications.
In an interview Tuesday, Petrie, a Champaign Democrat, said she wrote the letter because she was so frustrated with the lack of progress on payments owed the nursing home.
“We’ve gone through many steps of contacting our local legislators and working through lobbyists for the nursing home association. They have been trying to move things along and nothing has happened,” she said. “It isn’t as if I jumped the gun and we hadn’t tried all the other courses. This is sort of a step of last resort.”
She said she sent copies of her letter to other county board members and to members of the nursing home advisory board after she wrote it. She said she did not discuss the likelihood of closing the facility next year without more financial aid.
“It’s all a culmination of where the finances are and the cash flow situation and how much the nursing home owes to its vendors ($3.4 million) and that some of that is money they owed to the county too in (pension) payments,” she said.
She also said the letter to Rauner wasn’t a ploy to call more attention to a quarter-cent sales tax increase proposal for county facilities on next month’s election ballot. Among the projects on the county’s to-do list is about $2 million for work at the nursing home.
“It is not a ploy about the quarter-cent. The timing just turns out to be that way,” Petrie said. “But we’re so strapped for money there that it came to a point where the governor had to be written.”
Cathy Emanuel, who chairs the nursing home advisory board, said Petrie did not review the letter with her before she sent it to Rauner. But she didn’t disagree with its tenor.
“I have not heard publicly or privately” about the possibility of closing the nursing home in 2017, Emanuel said. “I think she is just sort of taking it to its furthermost conclusion.
“In fact, the nursing home advisory board recommended that we not consider closing. And I have not even heard the county board discussing that. I think she is just saying that if we can’t get any other solution, we’re going to have to figure out what we’re going to do. We are looking at all sorts of other things, including the quarter-cent sales tax. There’s a group organizing called the Friends of Champaign County Nursing Home, looking at trying to raise funds for the nursing home, not for operations but capital.”
But, she said, “I have heard the point that she is making about finances. I imagine she is sort of painting the most dire circumstance.”
Furious fundraising
Since Oct. 1, the Democratic Party of Illinois, led by House Speaker Michael Madigan, has reported $966,000 in itemized campaign contributions ($1,000 or more), in an effort to keep up with the contributions of Rauner and his allies to the state Republican Party.
The DPI reported 81 itemized contributions since Oct. 1, including $10,000 from state Rep. Carol Ammons, D-Urbana.
Seventeen other House Democrats contributed between $53,900 (state Reps. Marty Moylan of Des Plaines and Natalie Manley of Joliet) and $5,000 (Rep. Chris Welch of Hillside) since that time for a grand total of $397,300.
No People’s Map expenses
The Chicago-based group that successfully won a legal battle to keep a redistricting reform question off next month’s ballot in Illinois didn’t report a single contribution or expense from July 1 through Sept. 30.
That was during the period that the reform opponents, represented by a group called The People’s Map, used a high-powered elections law expert to argue their case to the Illinois Supreme Court.
So there’s still no evidence, based on The People’s Map’s latest quarterly filing with the State Board of Elections, who paid Michael Kasper, the Chicago lawyer and ally of Madigan, who was the lead attorney in the case. Madigan’s spokesman has insisted that neither the speaker nor the Democratic Party of Illinois is behind the group.
In fact, the only evidence of any contributions to the group in its 14-month history are five financial transfers totalling $10,000 made by labor unions — the Illinois Education Association, the Laborers’ Political Action and Education League, the Illinois AFL-CIO, the Illinois State Conference of Electrical Workers and the Illinois Pipe Trades political committee — more than a year ago.
In four cases, the contributions were sent to a post office box in Chicago, but in one case $2,000 was sent to 534 S. Second St. in Springfield, the address of the state AFL-CIO.
Tom Kacich is a News-Gazette reporter and columnist. His column appears on Wednesdays and Sundays. He can be reached at 217-351-5221 or at kacich@news-gazette.com.
Good to see that the Unions are so interested in keeping old Mike Madigan happy, directly or indirectly, by keeping things just the way that they are in this state.... miserable and corrupt.
Thanks to all of those hardworking union members, who helped support this continued corruption with their dues. The rest of us that you're helping to hold hostage, really appreciate it.
For public consumption, here is the memo to the governor, sans county letter head because I could not figure out how to include that.
7 October 2016
To: Governor Rauner
From: Pattsi Petrie, Chair, Champaign County Board
Re: Champaign County Nursing Home and Medicaid cash flow issues
The point of this memo is to bring to your attention the dire financial condition of the Champaign County Nursing Home (CCNH) because the home is presently owned 1.5 million dollars by the state in back Medicaid payments. This is not all that is owed. In addition, the timely processing of Medicaid applications is nonexistent, meaning that the number of open applications right now is costing the home $180,000/month. And there are several applications that are over two years old.
To be specific, Champaign County Medicaid applications are processed by the Macon hub rather than the Chicago hub. Chicago has a staff of 130; whereas, Macon has 70 with 34 vacancies. Even with full staffing, the volume of applications at the Macon hub still cannot be efficiently processed. The cause is a 14% application increase between January-July 2016 and another 31% increase between July-September. This translates to a 100 applications per caseworker in Macon as compared to 15.4 per in Chicago.
Since all 243 beds in the home are Medicaid approved, the home is the safety net for this county and surrounding counties. Right now 70% of the residents are on Medicaid. And the fact is that Medicaid under pays per cost of care per day by $40-75. The county citizens already subsidize the home at three cents per $100 property tax assessment. This is not sufficient to carry the home through the tremendous cash flow deficiencies from the state. One last aspect, a county nursing home, unlike a private one, cannot borrow money as a financial bridge.
Possible strategies to assist the home:
The reality check is that the Medicaid cash flow delays have created a situation that the decision of last choice may have to be to close the home sometime in 2017; thus the urgency of the memo. And where will the 70% Medicaid residents find an alternative nursing home.
Warm regards,
Pattsi Petrie
Ms. Petrie's is right. The shortage of Human Service Caseworkers in the Macon County long term care HUB is detrimental. However, an arguably larger and almost completely unpublicized problem relates to the concept of "task based casework" IDHS is using for long term care and assisted living cases. Instead of assigning caseworkers to nursing homes and assisted living facilities, IDHS is using a method which requires the "next available" worker to answer a call or perform an action for given case / application. IDHS' rationale is that it permits a greater level of productivity. The concept of "task based casework" may be good for community based cases, but it is proving to be an absolute unmitigated disaster for long term care and assisted living cases which are very labor intensive and require frequent adjustments as well as frequent communications with stakeholders such as family members, guardians, attorneys, facility bookkeepers and administrators. IDHS should not subject long term care and assisted living cases to "task based casework" and should immediately reassign caseworkers to these facilities. However, IDHS will likely oppose efforts to reassign long term care and assisted living cases to caseworkers as doing so would reflect poorly on those involved with the decision to adopt "task based casework" for these types of cases. It would also lend further credence to increasing criticisms being directed at the colossal failure known as the Integrated Eligibility System (IES). IDHS is doing everything possible to justify this expensive and difficult to use system for which a significant expenditure was made...and costs continue to increase as problems with the IES are being discovered on an almost daily basis. Simply put, the IES doesn't work well for any type of case, but especially for long term care and assisted living cases. The Illinois General Assembly should address the relevancy of "tasked based casework" and the effectiveness of the IES for long term care and assisted living cases with a sense of urgency. I strongly urge stakeholders in the classes I previously identified to contact their State Representatives and Senators about this.
More detailed information is very useful. Thank you for filling out the picture.
Brief history lesson:
The nursing home has lost money (run a deficit) almost every year of its existence, for decades.
In 2002, the Champaign County Board, in response to one of the perennial CCNH budget crises, board members rejected the idea of selling the alligator that periodically tries to eat the county alive to a private developer. I suggested giving it away, if necessary, to eliminate the perpetually radioactive budget sinkhole from the County's books.
Instead, the County Board held a referendum to build a new nursing home, and, rather than making it smaller (reducing the County's economic risk), they made it even bigger. And they asked for and got voter approval for approximately $1 million/year subsidy for operations.
But even with the subsidy, the CCNH budget deficit ballooned to more than $100,000/month by 2008, and it continues to be an enormous drag on the County's finances requiring periodic loans and bailouts.
In 2012, the County Board again declined an effort to put the option of either increasing the property tax subsidy or selling CCNH on the ballot. The County's general corporate fund bailed out CCNH again, further straining the rest of the County's finances.
Things have gotten so bad that it is, once again, time to panic.
Warning: This is sarcasm --> The good news is that the 1/4-cent referendum would possibly cure the CCNH financial woes forever, as it would raise so much more than is needed for the current building projects that the excess money might eventually allow CCNH to take patients for free (remember: the court house bonds being paid for the existing 1/4-cent will be paid off in a decade, freeing up an additional $3.5 million+ per year forever, too). This much-needed release from any reason to have any fiscal discipline whatsoever will come as a huge relief to County Board members who don't want to make difficult financial decisions and don't understand the county's budget/finances.
Back to sober reality --> Champaign County voters should vote no on the quarter-cent, forcing the County Board to sell (or pay someone to take over) CCNH to eliminate that perpetual hole in its budget. The monies needed for the other repairs that need to be done can be obtained by leveraging the County's strong bond rating and issuing zero-coupon bonds tied to the revenue ($3.5 million/year) that will be freed-up when the court house bonds are paid off in 2027/2028.
Are you going to have Pickup Granny Day on Mondays, and Fridays? Do the deceased have to be put on the street, or could they be picked up at the door?
People who are rich, and poor die everyday. Prior to that, they usuallly need care. Your money management does not take in the human factor. Nursing homes are all facing the same problem with Medicaid. Assuming that a corporate nursing home would buy, or lease the current facility is dicey. Is .0025% of a dollar too much?
Why don't you and all your friends that want to give money to the nursing home do so. Why do you insist everyone else follow along coerced via property tax? Furthermore, are you honestly claiming that a government entity will be the most effective manager of a long term care facility? How did that work for the myriad mental assylums and state homes of the past? What about the VA? What incentive would they have to operate within their means if they know people like you are more than happy to collect other people's money on their behalf? The only way that nursing home will ever make sense is if it has 70-80% paying residents and only 20-30% Medicaid paid residents....that may still be a stretch since Medicaid is such a colossal failure in its own right.
What you are saying is that Medicaid, elderly people have no right to die as peacefully as possible. Only those who have big incomes are allowed to die in nursing homes? If you cannot find it in your heart to pay 1/4 of a penny toward the equality in death, you are cheap......
Cleary you misread or misunderstood all of my post....I said it was a failing model to silo 100% Medicaid patients in one place and that government agencies were not equipped nor designed to operate health care facilities.
As far as the $$, there used to be a thing called charity and it worked well until you cash grabbing big government types sought out ways to justify increasing the taxes. Then more spending, then more taxes.... vicious cycle.
I choose my charities based on their performance metrics. You want to eliminate that choice and just take it. Like I said, there is no incentive for a government facility to operate fiscally well.
Voters should consider voting for only Republicans for the legislature. The Democrats have held the majority for many years and we see where we are after many years. For several years the Democrats also held the Governor's office and so they got us in this jam which our current Governor is trying to resolve.
What do we have to lose? Dictator Madigan will not budge and holds Illinois residents hostage. All area Democratic legislators have continued to vote for Madigan as Speaker of the House even though he is a complete failure excepts to those living in Chicago.
Elect a Republican majority in both houses and see how quickly things can be improved financially with the current Governor. We will continue to go down hill financially with the Democrats holding both legislative leadership positions and the majority in both houses.
What does the nursing home issue have to do with your Rauner boot licking?
Dear Pattsi:
Thanks for taking the time to write your letter, but you sent it to a vulture capitalist who bankrupted a nursing home that his company owned, before he transferred ownership of that nursing home to someone who was penniless and almost senile.
The man who allegedly governs our state doesn't care if the Champaign County Nursing Home goes broke. Union members laid off? He considers that a win! Another victory towards implementing his "turnaround" (run aground) agenda, that's going to make Illinois a great state again when all union members are deprived of their hard-earned contracts and meaningful employment. (He can't identify any benefits of his agenda for 98.6% of the current state residents, but we need to enact it to enrich him and his crony capitalist buddies.)
So you can hope that your letter spurs some sort of action in Springfield, but in all likelihood you'd be better off figuring out where you're going to send all the residents to when the county nursing home closes, after it goes completely broke and eats the county budget alive. But hey, at least you're not responsible for providing all county residents ages 5-18 with a free and appropriate public education....
Or you and the county board cut your losses now and find someone to lease the nursing home to.
Best wishes and good luck; you're going to need them...
I agree moving the CCNH to a susainable situation is a challenging task. But one I am working on and toward, not only for the county residents, but also the staff. I can not change the past history that has caused the present situation, what we have to do is work from this point forward.
So there are several hurdles to explain. The county can not just sell the nursing home. We need to ask the citizens first to sell or lease via a referendum. If the vote is "yes," then the CB must vote by a super majority to do so. Then an RFP must be issued to find out if there are interested parties. If there are and a sale is done, next the county has to work with Urbana to subdivide the county property. If and when all of this is accomplished, the new owner is in the position to open negotiations with the union employees. It is hard to know how this will progress--whether the union continues or not. And the final, but most important aspect, is the price received for the sale and will such pay off the nursing home bonds. If not sufficient, then the citizens will continue to pay property taxes toward the retirement of the bonds. Unfortunately, nothing is simple.
Now to Mr. Tapley's suggestion of zero coupon bonds with scheduled payment to begin when the last of the public safety bonds are paid off There are 5 different bond issues for the court house project. The payment of these bonds is accomplished with the quarter cent public safety sales tax. Note these monies can only be used for public safety, not general maintenance. So the money freed up as bonds are retired over the years does not necessary provide money for general maintenance. Next pushing off the beginning payment of bonds until 2029, just costs the taxpayers even more money in interest.
Whereas passing a quarter cent facility tax right now saves the taxpayer moniesin two ways. The generated monies will pay for maintenance project via cash without bonds and interest. The jail renovation is the only project that will need bond money. Second like all maintenance issues, the longer the work is put off, the more expensive it becomes.
So where is the logic of urging citizens to vote "no" when a no vote just means more cost to the citzens?
P.S. I have asked for counsel from my CB colleague who is an expert on bonds, teaching such in the UIUC School of Business. The advice is that zero coupon bonds are NOT a beneficial tool for the county.
Pattsi,
I will respond as though you genuinely do not understand (i.e., aren't intentionally trying to deceive).
The County's budget contains millions of dollars of funding for the Sheriff's Office and other line items that qualify as "public safety" in nature. The existing Public Safety Quarter-Cent tax dollars can be used to fund those expenses. Such a "swap" of revenue sources would free up non-sales tax revenues currently paying the Sheriff's expenses to be used for any non-public safety projects or spending.
In regard to issuing zero coupon bonds, I understand why other financial expert(s) might characterize their issuance as "sub-optimal" (due to interest paid, term structure, etc.); however, helping the County out of its current fiscal jam without raising taxes would be definitively "beneficial" for both taxpayers and the County. In addition, if property tax bonds were issued for the projects, the tax funding the projects would automatically go away when the bonds were retired.
The County is scheduled to receive a giant windfall of tax dollars (about $3.5 million/year) which will begin to cascade into the County's coffers in 2028 and 2029, when the Public Safety Quarter-Cent-Funded bonds are extinguished. Giving the County a second multi-million-dollar sales tax revenue stream that will go on forever (unless you believe in Santa Claus and temporary tax hikes) is unwise and unnecessary.
So, it will be 12 to 13 years before the county receives the financial windfall. What happens to the county nursing home during that time? What happens to the residents who cannot afford the high costs of private nursing homes?
At least, ask Rauner to restore the state cuts to the elderly who will need home hospice care during their final days. It is cheaper than nursing/hospice care. Most people who enter nursing/hospice care private facilities as private pay residents end up on Medicaid due to the financial cost.
Of course, this does not interest you. Your looking at the bottom line in terms of money expenditures. I would gladly donate my body for it's working parts, bone for fertilizer, and skin for leather in return for hospice in my final days. Hospice care is a big thing to the elderly who still vote in a large group.
Sid, bonds can be issued now and paid for with the funds from the windfall that starts in 2029.
In response, paragraph one is already being done. There is no more elasticity with the public safety sales tax. I am open, however, to having aspects in the budget that you have identified that can be moved. Remember we have one evening budget meeting specifically for a citizen such as yourself to come and make those pointed suggestions. No offense, but I trust Rachel Schwartz's bond expertise because over time she has enabled the county to save a great deal of money on bonds.So if she does not think zero coupon bonds benefit the county, I follow her advice. The county has already kicked the can down the road for 2 decades. This is why we are in the present situation.
The county waiting until public safety sales tax monies becomes available in 2029 just costs the county more in the long run as maintenance issues advance and cost more. Have you read the consultants report on maintenance?
All of the reports are now conveniently placed on web page to make it easier for all citizens can read them, educate themselves, and present pertinent questions.
Pattsi,
I hope you are not dismissing my advice simply because I am a Republican like your predecessors did on the bonds issued to pay off the pension under-funding that was caused by Mike Frerichs' ill-advised ERI proposal (Fabri and Avery smugly voted against issuing bonds for an arbitrage aginst IMRF's 7.5% annual credit that would have saved the county $150,000 and stated that they voted against it because a Republican named Tapley had proposed it--the Board passed it the following year saving only $120,000 because of the delay).
Ms. Schwartz is correct in advising you that zero coupon bonds are not the most cost-effective or efficient capital raising tools; however, given the bind the county currently is in and (hopefully) the public's unwillingness to shower the County with an excessive amount of funds (in the form of a new, permanent revenue stream to fix a finite, short-term problem), they are your best alternative at the moment.
BTW, I don't dispute the needs list. Many of the items were on the list when I left the County Board in 2007 and still haven't been addressed.
It is clear that you do not know me very well. I am an urban planner so I have spent my academic and research years looking at how to figure out how to work toward a "best practice" solution whether a crisis, problem, or opportunity. This approach normally does not use as variables party affliliations. :-)
Re Sid Saltfork post:
It appears to be the state government not providing funds due the county nursing home that is causing the problem. The Democrat led legislature refuses to pass a balanced budget and reduce spending. If the legislature passes a balanced budget then it is opined funds will be paid to those around the state who are owed money.
That will not happen if Democrats continue to hold the majority in the legislature.
A balanced budget requires both parties to agree. Rauner, and Madigan along with anyone with any intelligence knows that an income tax increase along with closing tax loopholes while controlling spending is necessary. Neither Rauner, or Madigan wants to be the first in pushing for a tax increase. While they are fighting over what type of tax increase, the citizens are being held hostage. There is not enough money in the state coffers to pay those who are owed money. Now, the state is in danger of not being able to pay it's portion to match federal monies.
Get over the Cubs versus Cards mentality, Democrats and Republicans are both to blame. Rauner needs to compromise on his Turn Around Agenda, and Madigan needs to compromise also. An ex-CEO billionaire with no political experience is fighting with a career politician. Sounds familiar.......