The requirements of nursing home facility licensure may soon change for Illinois skilled nursing home operators and licensees. State lawmakers have introduced HB6243, a bill which PROPOSES to revise annual license fees and institute a mandatory liability insurance requirement. If passed, nursing home operators could face increased costs and added oversight in the licensure process.

The proposed revisions to the annual licensure fees will most greatly affect operators of larger nursing home facilities. Currently, each Illinois facility pays an annual licensure fee of $1,990 to the Illinois Department of Public Health. Under the proposed revisions, license fees will be based on a per bed basis at a rate of $20 per bed. As a result, operators of facilities with 100 or more beds will face annual cost increases, while those smaller operators may actually see a decrease in expenses. No facility can pay less than the new minimum fee of $200.

HB6243’s insurance mandate also adds additional requirements to the licensure process, imposing the responsibility of compliance on both the owner and the operator. The proposed bill requires all Illinois nursing facilities to maintain a $500,000 liability insurance policy covering its residents. The bill’s language does not allocate the responsibility between the owner and operator, so those facility owners with operating tenants should ensure to properly allocate this burden in their lease agreements. No license will be issued or renewal without proof of the required insurance.

Of course, the financial effect of the insurance requirement will not affect all facilities equally. Many facilities will see no change, as industry norms and commonplace lender requirements dictate that facilities have standard $1MM/$3MM liability policy limits. On the other hand, those loan-free facilities that have elected to forego costly insurance premiums in favor of “self-insurance” – and are therefore incentivized to provide the highest quality care – no longer have this option.

With only days remaining in the current General Assembly, it is doubtful that we will see an immediate change to these licensure requirements. However, the bill may likely be reoffered in the next assembly. As such, it is not too early for current and prospective owners and operators to consider these potential costs and requirements on their bottom line when assessing future risk and responsibility.