Heritage nursing homes lawsuit says state of IL not processing patients' Medicaid apps, paying claims

By Jonathan Bilyk | Nov 15, 2016

A group of Illinois nursing homes has asked a federal judge to order the Illinois state government to pay them for services rendered to patients receiving assistance under Medicaid, saying the state has failed to live up to its obligations under federal law to promptly process patient Medicaid applications for a number of their nursing home residents or pay their claims.

On Nov. 15, the nursing homes, located in the downstate Illinois communities of Danville, El Paso, Pana, Mendota, Hoopeston, Beardstown, Normal, Peru, Paxton, Jacksonville and others, filed suit in Chicago federal court against the Illinois Department of Healthcare and Family Services, ostensibly on behalf of a group of patients whose Medicaid-eligible care has not been reimbursed in the past year or more by the state.

All of the nursing home plaintiffs are associated with Bloomington-based Heritage Operations Group LLC, which operates numerous nursing homes throughout Illinois.

The lawsuit names Felicia Norwood, director of the IDHFS, as a defendant, in her official capacity.

According to the lawsuit, each of the patients identified in the lawsuit have racked up large bills with the nursing homes at which they reside, and the state has not properly processed and paid their claims for reimbursement, dating back to 2014 in some cases.

The lawsuit accuses the IDHFS of failing to establish a program to efficiently evaluate the patients’ eligibility for Medicaid and pay their claims, effectively placing the burden on the patients to establish eligibility for those payments, which the lawsuit said violates federal law.

“In light of the Defendant’s failure to comply with federal and state Medicaid laws, the Plaintiffs have been unable to pay for their room, board, care and services at Heritage facilities during their period of Medicaid ineligibility,” the lawsuit said. “Such inaction by the Defendant places the Plaintiffs at risk of being discharged from Heritage facilities, and jeopardizes their health, safety, and well-being.”

The lawsuit comes as Illinois continues to suffer from a backlog of unpaid bills.

The complaint does not reference the state government’s ongoing financial problems or fiscal crisis.

However, last year, a federal judge ordered the state to make Medicaid payments to health care providers and hospitals, despite the lack of a state budget at that time.  

The Heritage nursing homes lawsuit doesn’t specify how much the nursing homes believe they are owed for care provided to the patient referenced in the lawsuit, or the other potential plaintiffs under the putative class action.

The complaint asked the court to order the state to abide by the requirements of the Medicaid law and other applicable federal laws, and to order the state to “arrange for medical assistance and nursing facility services to the Plaintiffs and Class,” as well as to pay attorney fees and potential compensatory and punitive damages.

The nursing homes are represented in the action by attorney Katie Z. Van Lake, of the firm of SB2 Inc., of Harrisburg, Pa.

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